Volaris Lays Off 200 Following Discovery of Engine Anomalies

Airline Volaris has announced the temporary layoff of 200 employees to mitigate the economic impact of rectifying anomalies detected in the Pratt & Whitney GTF engines powering the Airbus A320 fleet. The decision was made after parent company, RTX Corporation, requested an expedited inspection of the engines in July 2023. The situation raises concerns about capacity and highlights the challenges faced by jet engine manufacturers in ensuring durability and reliability amid evolving engineering standards.

Volaris anticipates a temporary slowdown in growth due to extended engine overhauls, this economic outlook prompted the company to lay off 200 employees. To address the potential engine anomalies, the airline plans to renew leases for 18 aircrafts expiring in 2024 and 2025. It also plans to acquire 24 new Airbus planes in two years, and actively explore options for additional aircraft engines.

The company expressed regret over the layoffs as demanded by the adjustment, emphasizing its commitment to the well-being of its employees and passengers. The impacted employees secured a favorable agreement with the Union Representation, receiving benefits surpassing the current regulations minimum. As part of the agreement, they were ensured priority rehiring once the preventive engine inspection was concluded and the fleet's full capacity was restored.

Earlier in July, Pratt & Whitney, faced a significant setback as it announced that over 1,000 engines used in Airbus A320neo planes between 2015 and 2021 must be removed and inspected for microscopic cracks due to a "rare condition" in powdered metal. Despite the challenges, RTX CEO Greg Hayes expressed confidence in their 2025 financial goals, “which include reaching US$9 billion in free cash flow.” However, Francois Duflot, Analyst, Bloomberg Intelligence, suggests that the growth capacity of Mexico's aviation sector in 2024 might be curtailed due to this development.  

This outlook can be attributed to the fact that engine inspections are not exclusive to Volaris; they have been conducted on a global scale, impacting at least 42 airlines operating using these engines. This widespread situation has sparked concerns about capacity shortage and the difficulties faced by jet engine manufacturers in maintaining the durability and reliability of their products amidst constantly changing engineering standards.

Enrique Beltranena, CEO, Volaris has assured that the company is proactively working to optimize its route network while the inspection process is underway. “The Volaris team is actively executing plans to mitigate the impact resulting from engine inspection, including a project to optimize our route network,” said Beltranena. Nevertheless, “Volaris anticipates a slowdown in the Company's growth while the requested inspection process is completed," he added.

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