Stock Markets 8 minutes ago (Sep 14, 2022 04:23PM ET)
© Reuters. Logo of the U.S. defense company Raytheon is pictured at an international military fair in Kielce, Poland September 7, 2017. REUTERS/Kacper Pempel
By Abhijith Ganapavaram
(Reuters) – Raytheon Technologies (NYSE:) Corp said on Wednesday delivery of some of its Pratt & Whitney large commercial engines may slip into the first quarter as the aerospace company struggles with parts and labor shortages.
The company will mostly make up for lost engine deliveries by the end of 2022, but some “may drag into the first quarter”, Chief Executive Greg Hayes said at the Morgan Stanley (NYSE:) Laguna Conference.
Pratt & Whitney engines power all of Airbus SE (OTC:)’s A220 jets and about half of its A320neo aircraft, competing with GE-Safran joint venture CFM International.
The aerospace supply chain is struggling with acute labor shortages, hurting Airbus and rival Boeing (NYSE:) Co’s efforts to ramp up jet production to cater to a surge in travel. Engine makers, in particular, have also been hobbled by a shortage of structural castings.
Hayes said he sees Boeing 737 production at about 31 jets a month by the end of the year and 787 at about two a month. Raytheon (NYSE:) is a major parts supplier to both programs.
Boeing said in July it was aiming to stabilize 737 production rate at 31 a month.
“We think 737s will be back somewhere around 42 to 48 and 787 back to probably 7 a month” in 2025, Hayes projected.
“We are focused on driving stability and predictability into our production, and future rates will be determined by demand and supply chain readiness,” Boeing said in a statement.
Hayes also differed with Airbus CEO Guillaume Faury on 2025 production rates.
“If you take a look at the projections for Airbus, we think that Airbus by 2025 will be at rate 65. And Guil might say rate 75, but we think rate 65 is doable.” Hayes said.
Airbus was not immediately available for a comment.