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A220 Engine Issues Delay Values Reaching Full Potential

March 13, 2023

The values – and lease rentals – of the A220 could temporarily deteriorate if the engine problems persist.

The values and lease rentals of the A220 were impacted to a much lesser extent during the Covid Event than most other types because of its recent service entry, considerable efficiency and retention. Now the after effects of the pandemic and the rapidly improving market conditions are causing problems for operators. Air Sénégal has announced that it is to rescind five orders for A220-300s to be leased from Macquarie Air Finance. The operators first A220-300 has reportedly been grounded for six months because replacement engines are needed. The problem is being partly hampered by the reliability of the engines wich would be expected to be reasonable in view of the number of years since the engine type was introduced. The engines became unserviceable after only a few months and thus far Pratt & Whitney have been unable to repair or replace the engines due to the shortage of parts and overhaul capacity. Air Sénégal is now seeking compensation from Airbus and Pratt & Whitney. Alternative aircraft in the form of the A320neo or E195E2 are being considered. Air Baltic, a major operator of the type, is also facing issues once more this year. Air Baltic were severely impacted by engine issues having to wet-lease at least five aircraft last year and this year, there are once more concerns. The operator reportedly indicated that normally it takes 90 days to overhaul an engine but today the process is taking eight months. The issue extends to the absence of spare engines. With an eight-month turnaround time, spare engines are quickly installed on aircraft leaving none for others. Air Baltic are, however, pleased with the aircraft but the business model includes wet-leasing A220 aircraft to SAS and Eurowings among others. Delta Airlines however, placed a follow on order for 12 more A22-300s in January 2023, the fourth such reorder in the last four years.

Pratt & Whitney indicates that the lack of availability of engines is partly due to a combination of limited time on wing, particularly in the context of a harsh operating environment and availability of hardware to rectify issues and overhaul capacity. The global supply chain issues are affecting the ability to cast structural items and other parts. Pratt & Whitney had earlier indicated that the supply chain issues would be resolved by the end of 2023 but this will now not occur until the first half of 2024.

The problem for values and lease rentals is that operators will perhaps prefer to delay ordering and leasing the type until the issues are resolved. In addition, placing unwanted aircraft will be problematical as any secondary lessee will be uncertain as to whether operations can be sustained. Both Airbus and Pratt & Whitney are working hard to resolve the difficulties but some payments may need to be made to operators to soften the effects of longer than expected grounding, particularly in view of warranties and guarantees that will be in place.


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