Science

Rolls-Royce (RR) Stock Rating Reaffirmed by Goldman Sachs

Rolls-Royce (RR) Stock Rating Reaffirmed by Goldman Sachs

In an embarrassment for one of the UK's top engineering groups, the company said that more inspections will be needed to tackle problems with its Trent 1000 engines, which are used in Boeing's Dreamliner 787.

That will lead to more disruption for its customers, with 380 of the engines in question now in service with airlines, with the firm adding that the new approach will not affect Trent 1000 Package B engines and Trent 1000-TEN engines.

The latest problem concerns a wear issue in the Trent 1000's compressor that's worse than expected, according to Rolls-Royce, which said the inspections will be accompanied by safety guidance to airlines issued by airworthiness authorities. Rolls said there were 380 such engines in service.

It says, however, that the need for more regular inspections will result in higher cash costs that those in its previous financial guidance.

This is a known issue and we will continue to work with Rolls-Royce, our customers and the regulators to fully resolve it. Boeing is deploying support teams to mitigate service disruption.

The affected 787's ETOPS is expected to be reduced from the certified 330 minutes flight time to the nearest airport to about 140 minutes, requiring the aircraft to fly closer to diversionary airports than straight to its destination.

Air New Zealand experienced turbine blade problems in planes on successive days last December and this led to accelerated repairs in Singapore for the engines and disruption to tens of thousands of passengers.




"We will be working closely with Boeing and affected airlines to minimise disruption wherever possible", Chief Executive Warren East said.

"Our team of technical experts and service engineers is working around the clock to ensure we return them to full service as soon as possible", he said.

"Virgin Atlantic has up to four 787s grounded at any one time while it sources replacement engines with Rolls and has also leased three Airbus A330-200s to help to cover its flying programme".

Trent 1000 Package C engines that have operated fewer than 300 cycles are unaffected by this directive.

British Airways, Japan's ANA, Air New Zealand and Thai Airways, which also use Trent 1000 engines, were not available for immediate comment.

In March, Rolls said the cash hit from the problem should hit a peak of £340 million in 2018 before falling in 2019.