The IATA director general accuses engine manufacturers of “gouging” airlines and profiting at their expense.
Outgoing IATA director general Willie Walsh did not mince his words when addressing the impact of supply-chain delays and engine problems on the aviation industry, accusing engine OEMs of “gouging” airlines while reaping double-digit profits.
“My message to engine OEMs is simple – stop gouging us and get back to making great engines that work and that last,” said Walsh in his state of the industry address at the IATA AGM in Rio de Janeiro on 7 June. “Allowing these failures to extend into the next decade is totally unacceptable to the customers.”
Walsh calls on the engine manufacturers to “get their act together”, noting that they are “doing extremely well while inflicting significant financial pain on the industry”. He says his use of the word “gouging” is “not strong enough” and was a “toned down” version of what he had originally planned to say.
“These guys need to start focusing on customers and delivering engines that work,” says Walsh. “They used to do that. We need to get back to what was a good performance by engine manufacturers. I object to them making a poor product and making money – if airlines did that, they’d go out of business.”
United Airlines chief executive Scott Kirby says engine supply issues are the main constraint on industry growth. He does not expect the situation to improve for at least five years.
General Electric and Pratt & Whitney are working with United and others to rectify their engine issues, he says in a conciliatory note. Rolls-Royce, however, is in his “dog house”.
“What are they doing?” Kirby says when asked how Rolls-Royce is addressing its engine supply chain issues.
On the airframer side, Walsh says he sees “progress” on delivery delays and that “the pinch point continues to be the supply of new engines”, which is adding to airlines’ fuel bills, maintenance costs and leasing costs.
Walsh was making his last IATA AGM address before leaving the trade body to take the helm at Indian low-cost carrier IndiGo. His successor has yet to be named, but IAG chief executive and IATA chair Luis Gallego says that “we have a list of very strong candidates” and “we expect to make a recommendation to the board before the end of the month”.
Additional reporting by Edward Russell.
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