Rolls-Royce 787 woes deepen as issue found in new engine variant

Employees of All Nippon Airways (ANA) queue in front of the company’s Boeing 787 Dreamliner plane after its test flight at Haneda airport in Tokyo April 28, 2013.(Reuters pic)

LONDON: Rolls-Royce Holdings Plc’s engine-durability crisis worsened as the company revealed that it has detected new issues with a further batch of turbines that power Boeing Co.’s 787 airliner, requiring extra shop visits.

The glitch concerns the intermediate pressure compressor on a “small number” of Package B Trent 1000 engines for the Boeing plane, London-based Rolls-Royce said in a statement Monday.

Following an agreement with the U.S. manufacturer and regulators, some 166 engines that are potentially affected will undergo a one-time inspection to assess the extent of the problem, Rolls said. Package B turbines have been in service since 2012, and evidence of wear has been detected on “high life” examples, it added.

While the check-up visits will incur “some additional cost,” Rolls-Royce stood by its 2018 free-cash-flow estimate of 450 million pounds (RM2.41 billion), plus or minus 100 million pounds. The reiteration takes into account increased servicing of Package C engines, where the glitch was originally detected, as well as mitigating actions being taken across the group, the company said.

Chief Executive Officer Warren East has said Rolls-Royce will reduce discretionary spending to offset the additional funds needed for overhauls and to keep to a key target of reaching 1 billion pounds in free cash flow by 2020.

The engine maker is due to unveil a new restructuring plan authored by turnaround consultant Alvarez & Marsal at a capital markets day this week.

About 80% of the Package C engine version has undergone initial checks for cracking or signs of wear and tear on turbine blades, a person with knowledge of the issue has said. Just under a third of those engines failed the initial inspections required by regulators for planes that fly more than 2 hours and 20 minutes from the nearest diversionary airport.