Rolls-Royce, airlines grapple with Dreamliner engine issues

Rolls-Royce's Trent 1000 engines to undergo further inspections as it warns of disruption to customers

Rolls-Royce share price slides as group flags further engine inspections

Rolls-Royce Holdings said it will incur extra costs and further disrupt services for airline customers as it carries out additional inspections on engines it builds for Boeing's 787 Dreamliner jet.

The aerospace and engineering giant said it had made a decision to carry out more checks on the 380 engines now in service with airlines from the "package C" tranche of production, the majority of the 500 in operation.

The increased inspection frequency is driven by further understanding of the in-service durability issues with the Trent 1000 Package C engine's intermediate pressure compressor, a condition that was first revealed earlier this year.

Air New Zealand is making changes to some global flights after being forced to carry out early maintenance checks on its engines.

As of 08:36 BST, Rolls-Royce's share price had given up 1.57 percent to 867.40p, underperforming the broader United Kingdom market, with the benchmark FTSE 100 index now standing 0.09 percent lower at 7,251.80 points.

Rolls said it would reprioritise spending to mitigate the costs and kept its 2018 free cash flow guidance unchanged at about £450mn ($643mn), give or take £100mn.

The affected 787's ETOPS is expected to be reduced from the certified 330 minutes flight time to the nearest airport to about 140 minutes, requiring the aircraft to fly closer to diversionary airports than straight to its destination.

General Electric engines used on some Boeing 787 Dreamliners are not affected.

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Read: Rolls-Royce faces turbulence over engine issues.

About 200 engines are due for maintenance in coming weeks, according to East, who didn't say whether airline compensation is factored into the new guidance.

The need to inspect and fix Trent 1000 engines has led to an industry-wide shortage.

"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", he said.

This check was already required prior to the engine reaching a flying threshold of 2000 cycles (one way journeys).

Virgin Atlantic said it had up to four 787s grounded at any one time while it organised replacement engines from Rolls.

Scoot, a budget carrier owned by Singapore Airlines, said it expected some impact on operations.

In March, Rolls said the cash hit from the problem should peak at £340mn in 2018 before falling in 2019.

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