Rolls-Royce (RR.) has engineered itself a costly headache. The blades in its Trent 1000 engines have been deteriorating faster than expected. In February, Air New Zealand partly blamed a soft first half of its financial year on the disruption to its network caused by its Trent 1000s. And at the start of April, Singapore Airlines was forced to ground two of its Boeing 787-10s after inspections to the Trent 1000-TEN upgrade revealed that blade issues would force the premature replacement of the engines. Rolls this week announced an accelerated inspection regime.
Rising order intake
Improving underlying figures
Troubled engine programme
One-off FCT benefits of capitalised development costs
Soft outlook
A market shift from large jumbo jets to more nimble aircraft has also affected Rolls-Royce’s business, and specifically its order pipeline. It incurred a £186m exceptional charge connected with the Trent 900, after Airbus decided to shorten its A380 programme. Airbus’s decision meant a reduction to an order agreed under a $9.2bn (£7.2bn) deal in 2015 to provide engines and aftercare for 50 Emirates A380s (revised up to 52 in 2016). Rolls-Royce had already delivered engines for 19 aircraft, and would supply 56 engines for 14 remaining aircraft instead. The Trent 900s have also not been without fault – low durability of various parts cost Rolls-Royce £51m and £14m in cash costs over 2017 and 2018 respectively.