Nah. Please let them be replacements for some of the 319’s that never get more than 400nm from PHL or DCA.

 

Spirit gets more credits from P&W for 2025. Hopefully continued forward progress for the Spirit team.

https://aviationweek.com/air-transpo...f-compensation

 

We’ll burn through that this quarter.

 

Its not cash. Its a $150M credit for inspection, removal and replacement of the metal engine parts. So effectively Spirit doesn't have to come out of pocket fully for all this expense and instead some of it is being covered by Pratt. The agreement also removes Aero Systems from any future liability.

 

this is 100% accurate. Even with the operating losses associated with having these planes back on the line, it would still be more beneficial than these “credits” Pratt is giving us.

 

so it’s them giving us a discount for the inspections of the faulty engines they built?

 

We were told that AA did look into buying these airframes but 'Spirit wanted too much money' relative to the cost of converting them. So, no dice.

 

Exactly. Just like buying a car or any other good, engine manufacturers offer ongoing service that can be purchased for future repairs or maintenance. Everything from an extended length warranty, service agreements, parts, engine monitoring etc. If you want more protection, you pay more. Apparently Spirit didn't purchase any of these, or not enough to cover the engines being down. This settlement gives a discount to the tune of $150M for all those repairs, inspections etc but anything extra they have to pay for. This also doesn't include lost revenue, which Spirit apparently doesn't have lost revenue insurance.

I'm guessing that to keep costs down, Spirit just didn't buy anything and rolled the dice on everything working perfectly, which didn't happen and so these are the consequences. Spirit also gives up their right to sue with this, which Pratt's legal counsel or even whoever Pratt gets its Errors and Omissions from might have told them to settle if they want to continue to be insured. Corporate insurance is a huge business, and companies like AIG and Lloyd's of London insure many large companies all over the world. Boeing and GE are largely insured by AIG for example.

 

Was told we looked at them at United as well. The biggest problem wasn't actually the cockpit reconfiguration, but the cabin renovations to match current UA configurations. This would have been expensive and difficult to do since all the new planes need to have cabins initially configured and some existing planes are being reconfigured as well. The supply chain can't handle that much and decided it wasn't worth it so United passed as well. I'm sure whatever economic constraints American saw, United and other airlines are seeing the same issues.

 

I was under the impression that the cost of the inspections including removal and shipping was on P&W. I was also of the understanding that the money we got from them last year was to pay the leases on the airplanes while they were down. Nothing for lost revenue but leases getting paid so they don’t make money but they also don’t cost money.

I find it hard to believe that we are paying leases on airplanes that are required to be down for a faulty engine. These credits must be different than last year. I cannot image we are on the hook for inspections for their engines.