Raytheon CEO Sees Little Impact on Pratt & Whitney From Slowdown in Air Travel Due to the Delta Variant

The delta variant of COVID-19 has caused more turbulence in the airline industry, but poses little threat to jet engine manufacturer Pratt & Whitney, its parent company’s chief executive officer said Wednesday.

Strong domestic travel and demand for engine parts are helping the East Hartford manufacturer weather the latest surge in the pandemic, Gregory Hayes, CEO of Raytheon Technologies Corp., said during an online industry conference.

“We have heard from the airlines that there has been some softness here in forward bookings,” he said. “Planes remain relatively full for the domestic routes, perhaps not as full as they might have been absent the delta variant.”

President Joe Biden’s federal vaccine requirements affecting private-sector employees, health care workers and federal contractors will give a needed boost to airline travel, Hayes said.

“I think the president’s mandate last week in terms of the vaccine is only going to strengthen the outlook as we go into the fourth quarter,” he said. “We’re not discouraged yet.”

The problem is international travel, with a less robust recovery in Europe than in the U.S. and reduced travel to China, Hayes said. Weak international travel will persist through the end of the year and probably into 2022 “as the vaccine rollout is very slow around the world,” he said.

In addition, the delta variant has had less of an impact on domestic flights, he said.

“Anybody who’s been to the airport lately here in the U.S. probably wouldn’t notice it because planes remain relatively full for domestic routes, perhaps not as full as they might have been absent the delta variant,” Hayes said.

Although revenue passenger miles — a measure of airline travel — is “down a little bit,” he said, another measure, available seat miles, or the capacity of an airplane available to create revenue, is driving Pratt & Whitney’s lucrative engine repair and maintenance business, he said.

“The airlines continue to want to make sure that they’ve got the capacity, they’ve got the parts they need when traffic comes back so that bodes fairly well I think for the rest of this year,” Hayes said.

United Airlines said it does not expect to turn a profit in the third quarter and announced reductions in flight capacity following weak August bookings. American Airlines cut its revenue guidance for August and September, Delta Air Lines said the pace of recovery “paused” due to the sharp rise in COVID and Southwest Airlines cautioned that revenue in August will be down more sharply than in July.

Raytheon said in January it was cutting 16,500 commercial aviation jobs worldwide at Pratt & Whitney and Collins Aerospace, a 20% drop. In Connecticut, the job losses amounted to 450.

Stephen Singer can be reached at [email protected].

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