*

Prices of spare Pratt & Whitney GTF engines have been

soaring

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Spike caused by supplychain snags and long repair waiting

times

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Over a dozen almost-new Airbus jets scrapped for their

engines

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IATA airline industry boss says 'something seriously

wrong'-

By Tim Hepher, Allison Lampert and Eva Manez

CASTELLON DE LA PLANA, Spain, Oct 20 (Reuters) - At

Castellon airport in eastern Spain, workers in hazmat suits

wriggle through hatches of a nearly new Airbus jet,

stripping out parts as if gutting a mechanical whale. Once a

semi-deserted airport, Castellon has become a graveyard for

aircraft caught in a global engine crisis.

Despite booming demand for planes, a severe shortage of

next-generation fuel-efficient engines has flipped market

economics: in some cases, the engines are now worth more than

the aircraft they power when offered as spares.

The imbalance has led to more than a dozen Airbus jets being

dismantled for parts after only a few years in service, with

dozens more awaiting their fate, according to industry insiders.

AIRBUS JET SCRAPPED AFTER SIX YEARS

The unusual trend, driven by delays in Pratt & Whitney

GTF engine production and maintenance, has sounded the death

knell for jets like the six-year-old A321neo being broken up in

Castellon. The A321neo is part of the A320 family, which this

month ousted Boeing's 737 as the most-delivered jetliner.

The Spanish airport, for years blighted by a lack of

passengers, is the growing hub for a lucrative financial trade

as UK-based eCube harvests parts from almost-new jets for

investor clients.

"I can't say I remember it happening on this scale before,

because we've never had an issue like this on such a popular

engine," said Lee McConnellogue, CEO of the company, which says

it can release usable parts or recycle virtually the whole jet.

Skilled workers strip out avionics, wheels and wing parts.

Engine housings sit on the wings like empty husks, with

their precious powerplants wrapped in blue covers to become

spares worth up to $20 million. They are urgently needed by

airlines forced to ground jets because of queues for engine

repairs.

The problem worsened in 2023 when Pratt & Whitney disclosed a

rare powder-metal defect that could cause cracking, prompting

calls for inspections of 600-700 GTF engines through 2026.

According to Cirium data, one-third of the GTF-powered

Airbus fleet or 636 jets are grounded or in storage. The

equivalent percentage for planes with engines from competitor

CFM is 4%.

Pratt & Whitney and Airbus had no immediate comment.

'SOMETHING WRONG'

The jet engine squeeze is disrupting airline operations

worldwide, as carriers struggle to meet passenger demand and

unlock the promised 15% fuel savings of new aircraft.

Most airlines say they are short of jets after years of

delivery delays and are keeping older planes flying longer.

But in some cases, financial owners can earn more by

stripping engines than by leasing out the jet itself.

For example, the engines can be rented out as spares for

some $200,000 a month each, according to UK-based Cirium. That

is at least as much as a whole plane with engines. Add to the

pot revenue from breaking up the rest and the deal makes sense.

"It's a paradox where there's so much demand, why on earth

would people be parting out aircraft," said Austin Willis, CEO

of Willis Lease, which bought some of the engines.

The engine bubble overshadowed a recent meeting of the

International Society of Transport Aircraft Trading (ISTAT), a

teeming ecosystem of aircraft traders and lessors who buy, sell

or finance almost every aspect of a jet from nose to tail.

"It's a financial play ... There have been billions of

dollars of private equity capital bidding for aircraft and

engines to part out in recent years," Naveo consultant Richard

Brown said.

"It shows aviation has become a super-efficient

marketplace," he added in a telephone interview.

But airline leaders question how aircraft built to fly for

more than 20 years and save millions of gallons of fuel are

being dismantled so quickly.

"It tells you something is seriously wrong," said Willie Walsh,

head of the International Air Transport Association, which last

week predicted $11 billion in costs from supply disruption this

year including $2.6 billion in engines alone.

Critics say the crisis has its roots in an overreaction to high

oil prices above $140 a barrel at around the time engine makers

were designing current models. Engine design involves a

balancing act between optimising efficiency or durability.

"They went too fast and the engines had great improvements

in efficiency but they failed on maintenance," leading aviation

economist Adam Pilarski told Reuters during the ISTAT event.

Engine executives argue the fuel savings benefit airlines on

every mile flown, while maintenance delays are temporary. Even

so, Pratt admits it will take years to end bottlenecks.

Chris Calio, CEO of Pratt & Whitney parent RTX, said

last month that groundings had stabilised and would fall, but

that "clearly we have more work to do."

Now some are eyeing the fate of Airbus planes discarded by

Spirit Airlines as the U.S. carrier faces bankruptcy.

"I don't think the die is completely cast on what's going to

happen to Spirit, but it's inevitable that some of those

aircraft will (be broken up)," eCube's McConnellogue said.