Rolls-Royce faulty engines to cost company even more

Rolls-Royce updated the market on the ongoing Trent 1000 engine in-service issues on Friday, having outlined its management of the issues and the estimated costs relating to implementing its solutions in its full-year results in early March.

The FTSE 100 company said that, as part of its ongoing inspection and testing of those engines, it had decided to carry out additional engine inspections to those previously planned.

It said that the increased inspection frequency was driven by its further understanding of the durability of the Trent 1000 Package C compressor - a condition that was highlighted earlier in the year.

The inspections would be supported by service management and flight operations guidance to airlines, to be issued by the airworthiness authorities.

That would lead to additional disruption for customers, Rolls-Royce explained.

There were 380 Package C engines currently in-service with airlines, with the new regime having no impact on Trent 1000 Package B engines or Trent 1000-TEN engines.

While the compressor technical issue was known at the time of the company’s results, the requirement for more regular inspections would lead to higher than previously guided cash costs being incurred during 2018, the board confirmed.

The board said it was reprioritising various items of discretionary spend to mitigate the incremental cash costs, and its guidance for 2018 free cash flow remained unchanged for 2018 of around £450m.

“Our focus is on supporting our customers and doing all we can to minimise any impact on their operations,” said CEO Warren East.

“We sincerely regret the disruption this will cause to our customers and 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.

“We will be working closely with Boeing and affected airlines to minimise disruption wherever possible.”