More bad news for Rolls-Royce's (RR.) shareholders, as it’s emerged that a technical glitch affecting the durability of a certain type of Trent 1000 engine has been identified on another model – the ‘Package B’. The Derby-based engine maker has been struggling to fix a problem with the compressor in the Trent 1000 package C engines that power Boeing's 787 Dreamliner jet, forcing planes to be grounded while remedial actions are taken. Put simply: the problem means parts wear out faster than expected. Management has made arrangements with Boeing and regulatory authorities to carry out a one-off inspection of the Trent 1000 Package B fleet, which consists of 166 engines.
The engine issues are somewhat against the run of play, as it’s generally held that chief executive Warren East had been engineering a substantive turnaround after years of underperformance. Unfortunately, this has entailed some harsh medicine – and more could be on the way. At the time of writing, management was refusing to confirm or deny speculation that it plans to cull more than 4,000 white-collar workers as part of efforts to reduce costs*.
Indeed, the group is looking to take the ‘soft machine’ out of the equation wherever possible – or so it would seem. It is embracing the sorts of technologies that doomsayers warn will increasingly make flesh and blood surplus to requirements. The good folk of Derbyshire already rub shoulders with robots on the production line, but Rolls-Royce is looking to use augmented reality in the service supply chain, enabling technicians to assess the health of an engine through a computer-generated composite image. Not only that, but prototype parts have already been fabricated using advanced 3D printing technologies, while plans are under way to transition towards a completely digital design-and-test process for its jet engines. Presumably all this extra kit won’t come cheap, although the group is still targeting £1bn in free cash flow (FCF) by around 2020.
Doubtless this latest technical issue is as frustrating for shareholders as it is for management, but a sense of perspective is required. After all, the other two manufacturers, which along with Rolls-Royce dominate the global jet engine market – General Electric and Pratt & Whitney – are struggling with their own engineering issues. Pratt & Whitney has had trouble producing reliable versions of its highly-rated geared turbofan engines for use in the Airbus A320neo jet engine variants. And in April, global airlines began inspecting some Boeing 737 engines, produced as a part of a joint venture between General Electric and France’s Safran, after a Southwest Airlines flight was forced to make an emergency landing in Philadelphia, when one of its engines sheared apart mid-air, leaving one passenger dead – the first fatal US airline accident in almost a decade. We all might hate to admit it, but mechanical failures are probably unavoidable when you’re pushing the boundaries of aviation technology – the trick is catching them on terra firma.
