By Gabriel Araujo
SAO JOSE DOS CAMPOS, Brazil, Sept 3 (Reuters) - Aircraft lessor Azorra sees signs that Pratt & Whitney's engine troubles are easing and expects strong demand for smaller, fuel-efficient jets to continue despite industry disruptions and higher fuel costs, its president, Ron Baur, told Reuters.
Pratt, an RTX unit, has spent recent years grappling with maintenance delays and metal contamination issues that contributed to an industry crisis over engine shortages and left hundreds of aircraft
idle.
Its geared turbofan engines power Embraer's E2 family and Airbus A220 and A320neo aircraft.
Pratt said in July that maintenance disruptions had eased and virtually disappeared for the small A220 and E2 models, however industry sources have said it remains at odds with Airbus about disruption to engines for larger A320neo jets.
"We think Pratt for sure has gotten better," Baur said on Wednesday on the sidelines of an event marking Embraer's delivery of its 2,000th E-Jet. "We see definitely a light at the end of the tunnel with the engines."
Baur said the problems were comparable to the "teething issues" often seen with new aircraft technologies, adding that aircraft and engine manufacturers typically work through such challenges over time.
MANAGEABLE CRISIS
Global airlines have been contending with higher fuel prices since the U.S.-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz. Still, Baur said the crisis was "manageable" and had not materially weakened demand for aircraft.
"Uncertainty always slows fleet decisions down, so we see a bit of that. But for the most part, we still see the demand for aircraft really quite strong," he said, noting that carriers have been able to pass on some higher fuel costs to passengers.
He added that a shortage of aircraft worldwide continued to support leasing demand, particularly for smaller jets such as Embraer's E2 and Airbus' A220, which seat up to about 150 passengers and consume less fuel than older and larger models.
The E2 series outsold the A220 three-to-one last year, though Airbus recently won a major order from Air Asia. Azorra has commitments for both small-narrowbody families.
"I think they're both very good aircraft. I think Embraer for sure had a really good year last year. We expect that to continue," Baur said.
The executive also reiterated interest in a potential stretched version of the A220, often referred to as the A220-500, which Airbus has studied but not yet launched. "I think a stretch - 500 would be very competitive," he said.
(Reporting by Gabriel Araujo; Editing by Susan Fenton)
