Compressor issue in Rolls-Royce engine grounds Boeing 787 Dreamliners

Marco Green
June 12, 2018

The news about the compressor issue will not help however as Rolls has been fighting to show it has a lid on a problem which has forced airline customers to lease alternative planes to fly in the busy summer holiday period.

The fault could lead to the engines cutting out, and some aircraft powered by Trent 1000 engines have been grounded.

While Rolls-Royce has declined to confirm or deny the reports of job cuts, it revealed in a statement on Monday that it has identified additional issues with its Trent 1000 engine. Now, Rolls has discovered a similar durability problem may exist across 166 "Package B" engines.

On Monday it said it had now found the same issue on a "small number of high life Package B engines", requiring a one-off inspection of the B fleet and sending its shares down one percent.

Despite its engine troubles, Rolls-Royce says it will deliver £1bn of free cash flow by 2020 as part of the restructuring plan put into place by Warren East since taking over as CEO in 2015.

However, it said its understanding of the Package C service impact and "mitigating actions we continue to take across the group" allowed it to stick to its fiscal 2018 free cash-flow guidance of £450m plus or minus £100m.

But it has warned the figure may rise as it compensates airlines for grounding and replacing airplanes.

Rolls-Royce Holdings plc (LON:RR) insider Ian Davis purchased 236 shares of the stock in a transaction that occurred on Thursday, June 7th.

A spokesperson for the company said: "In January, we announced a simplification of our business and began work on a restructuring of our support and management functions".

"We said we had retained restructuring experts Alvarez & Marsal to support us with this programme", the spokesperson continued.

"We are proposing to move to a considerably simplified staff structure, with fewer layers and greater spans of control across the group".

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.

Other reports by Click Lancashire

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