Key facts
- Aircraft lessor Azorra believes Pratt & Whitney's engine issues are improving.
- Strong demand for smaller, fuel-efficient regional jets is expected to continue.
- Global airlines are managing higher fuel costs by passing them to passengers.
- A worldwide aircraft shortage is supporting demand for aircraft leasing.
- Azorra has commitments for both Embraer E2 and Airbus A220 aircraft families.
Aircraft lessor Azorra sees positive signs regarding Pratt & Whitney's engine issues and anticipates continued strong demand for regional jets, according to President Ron Baur.
Pratt & Whitney, a unit of RTX, has experienced significant maintenance delays and metal contamination issues, contributing to a global shortage of aircraft engines and grounding hundreds of planes. These engines are used in Embraer's E2 family and Airbus' A220 and A320neo aircraft. While Pratt indicated in July that disruptions had eased for the smaller A220 and E2 models, industry sources suggest ongoing disagreements with Airbus regarding engines for the larger A320neo jets.
Baur expressed optimism, stating, "We think Pratt for sure has gotten better," and sees "definitely a light at the end of the tunnel with the engines." He compared the problems to typical "teething issues" associated with new aircraft technologies that manufacturers usually resolve over time.
Despite higher fuel prices, exacerbated by disruptions in the Strait of Hormuz, Baur described the situation as "manageable" and not significantly weakening aircraft demand. He noted that while uncertainty can slow fleet decisions, overall demand remains robust, with carriers able to pass on some increased fuel costs to passengers. The ongoing global shortage of aircraft continues to bolster demand for leasing, particularly for smaller, fuel-efficient jets like the Embraer E2 and Airbus A220, which carry up to approximately 150 passengers.
Last year, the E2 series outsold the A220 by a three-to-one margin, although Airbus recently secured a significant order from Air Asia. Azorra holds commitments for both aircraft families and Baur expressed continued confidence in their competitiveness, reiterating interest in a potential stretched A220-500 variant that Airbus has considered.