Vietjet selects RTX's Pratt & Whitney to power 19 additional A321neo aircraft
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Insights
The announcement of Vietjet's exercise of options for an additional 19 GTF-powered A321neo aircraft represents a significant order for Pratt & Whitney, potentially affecting RTX's stock performance. The GTF, or Geared Turbofan, engines are a line of high-efficiency jet engines that have been gaining market share due to their reduced fuel consumption and lower emissions compared to traditional engines. This deal not only indicates Pratt & Whitney's competitive position in the market but also reflects the ongoing trend in the aviation industry towards more environmentally friendly and cost-efficient technologies.
For stakeholders, the implications are multifaceted. On the one hand, this order could increase Pratt & Whitney's revenue backlog, providing a more stable financial outlook. On the other hand, fulfilling this order will require successful scaling of production and maintenance capabilities, which could pose challenges. The long-term benefits for Vietjet include potential operational cost savings and an enhanced eco-friendly brand image, which could attract environmentally conscious customers.
From a financial perspective, the exercise of options for additional aircraft is a bullish signal for Pratt & Whitney's parent company, RTX. It suggests confidence in the GTF engine's market performance and reliability. The EngineWise® Comprehensive service agreement accompanying the engine order is a strategic move to secure long-term service revenue, which typically offers higher margins than the initial sale of engines. This could improve RTX's future earnings visibility and margins, making it an attractive point for investors.
However, investors should also consider the capital expenditure associated with expanding service capabilities and potential risks in the supply chain that could affect delivery timelines and cost structures. The impact on the stock market will depend on how well Pratt & Whitney manages these operational aspects and whether they can meet or exceed market expectations for profitability and efficiency.
Examining the broader market implications, the selection of GTF engines by Vietjet may influence other airlines' procurement decisions, potentially leading to increased market share for Pratt & Whitney. The aviation industry is highly competitive and airlines are continuously seeking ways to reduce operational costs. The GTF engine's promise of lower fuel consumption and maintenance costs positions Pratt & Whitney favorably against competitors.
It is also worth noting the strategic importance of the signing ceremony's location at the Singapore Airshow, a major event in the aviation industry that garners significant attention. Such public commitments can enhance brand reputation and serve as a marketing tool to attract new customers. The ripple effects of this deal could be seen in subsequent orders from other airlines, influenced by Vietjet's decision and the visibility gained at the airshow.
GTF engines selected for follow-on A321neo order
Vietjet is a rapidly growing airline with an expansive fleet and flight network. Vietjet Chief Executive Officer Dinh Viet Phuong, said. "We continue to select and trust our partner, Pratt & Whitney, as they have long been a world leader in the aviation industry with a solid technology foundation. We are confident about the GTF-powered aircraft that provide fuel efficiency and reduce the environmental impact. Vietjet continues to have trust and faith in the ongoing support provided by Pratt & Whitney."
Vietjet received its first A321neo aircraft in 2018 and currently operates a fleet of 24 GTF-powered A321neo aircraft. Combined with the airline's previous orders, Vietjet has committed to up to 87 aircraft of this type.
"Nearly a decade ago, Vietjet first selected the GTF engine, and we value the airline's continued trust in Pratt & Whitney to power its expanding fleet," said Rick Deurloo, president of Commercial Engines at Pratt & Whitney. "GTF engines provide Vietjet with some of the lowest fuel consumption and emissions in the region."
Vietjet is actively expanding its flight network to serve passengers throughout
About Pratt & Whitney
Pratt & Whitney is a world leader in the design, manufacture and service of aircraft engines and auxiliary power units. To learn more visit www.prattwhitney.com.
About RTX
RTX is the world's largest aerospace and defense company. With more than 185,000 global employees, we push the limits of technology and science to redefine how we connect and protect our world. Through industry-leading businesses – Collins Aerospace, Pratt & Whitney, and Raytheon – we are advancing aviation, engineering integrated defense systems for operational success, and developing next-generation technology solutions and manufacturing to help global customers address their most critical challenges. The company, with 2023 sales of
About Vietjet
The new-age carrier Vietjet has not only revolutionized the aviation industry in
Vietjet is a fully-fledged member of International Air Transport Association (IATA) with the IATA Operational Safety Audit (IOSA) certificate. As
Further information at www.vietjetair.com
Media contact:
Vietjet
Kieu Duong (Amy)
E: kieuduong@vietjetair.com
Tel: +84 932 775 066
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FAQ
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