Raytheon Technologies Corporation (NYSE:RTX) Q4 2022 Earnings Call Transcript

Seth Seifman: Great. Thanks. Thanks for the final question. Guys, I wonder if we could dig in a little bit more on the GTF. And you talked, Chris, a little bit about the time on wing. What we’ve been reading lately from comments from some of the leasing companies and comments in the press is the time on wing on new generation engines has been falling short of expectations. And so a) kind of to what degree do you share that perception and kind of where does it need to get; b) what specifically in the engine do you need to kind of improve to get it there; and then the last part is, I think you mentioned the GTF aftermarket profits were positive for the first time. And just with a relatively young pool of engines and maybe some time on wing challenges, how do profits get to positive?

Chris Calio: So I would say that I generally agree with the sentiment that you’re hearing, time on wing, and we’ve been pretty open about this. And very open dialogue with our customers, a lot of time on wing €“ on newer platforms, not necessarily being where we wanted them to be when we launched the program. We have done a number of block upgrades. As I said, we’ve got a block upgrade going in now through MRO that increases time on wing. On average, about 20% just based on the geography that you’re in. And we’ve got some other, I’d say, durability and reliability hardware and software fixes that we put in as well. So we want to €“ we obviously want to get to the contractual levels that we have promised, and we’ve got a plan to go do that with these upgrades, Seth.

I will tell you, keep in mind, you’ve got the GTF advantage that’s going to start cutting in 2024. As you know, that’s the next generation of the GTF, more thrust, better fuel burn, start flight testing in Q4 with Airbus, and we remain on track there in €“ for 2024 EIS. That takes all of the lessons learned we’ve had on the, what I call base GTF program and some enhanced testing. And we think that that’s the next generation that will get to the levels of performance and time on wing that our customers are anticipating. But even on the €“ what I’ll call the existing fleet today, we’ve got upgrade plans to continue to push that time on wing higher and higher. Our customers are demanding it, and our contracts are dependent on it. So we’re aligned there.

Seth Seifman: Okay. Thanks very much.

Greg Hayes: Okay. Thanks, Seth, and thank you, everyone, for listening today. As always, Jennifer and her team are going to be available today, tomorrow, the rest of the week to answer any follow-up questions that you have. Thank you for listening, and take care, everyone.

Operator: This now concludes today’s conference. You may now disconnect.