FRANKFURT (Reuters) - Lufthansa (DE:LHAG) said issues with the new engine of its A320neo plane are not fully fixed and as a result it was not ready to put more of the revamped Airbus jets into commercial service.
"The engine issues are slowly improving, we're not there yet, that's why we have not agreed to take the second aircraft into the fleet," Lufthansa CEO Carsten Spohr said after the German carrier reported annual results on Thursday.
Plane manufacturer Airbus (PA:AIR) missed an end-2015 target for the first delivery of the new version of its best-selling plane after it was found the engines, made by UTC's Pratt & Whitney (N:UTX), needed longer than usual to start properly.
Lufthansa, which stepped in as the first operator when Qatar Airways refused to take the plane, took delivery of its first A320neo in January.
For now, the jet is only flying on routes within Germany, where Lufthansa has a large base of engineers at its maintenance division.
"We could fly to other places but we would need more engineers in those locations," Spohr said.
He said the German carrier was receiving compensation from Airbus until it could make full use of the A320neo and that the jet was showing a 20 percent reduction in costs compared with the earlier model.
Software issues, where the engine sends erroneous messages to the cockpit, are also about 50 percent resolved, Spohr said.
Pratt & Whitney said this month the new geared turbofan jetliner engine had logged high reliability at Lufthansa and that it was delivering software and hardware fixes.
Lufthansa is due to take delivery of 52 new planes this year, including five A320neo jets.