/ 16 November 2010

Rolls-Royce to take back A380 engines from Airbus

Rolls Royce To Take Back A380 Engines From Airbus

Engine maker Rolls-Royce has asked Airbus EAD to return some Airbus A380 engines from production lines so it can use them to replace faulty ones on airplanes already in service.

Rolls-Royce’s move could be another blow to a much-delayed A380 programme as Airbus was scheduled to deliver over a dozen Rolls-Royce-powered A380s — primarily to Singapore Airlines, Qantas and Lufthansa by the end of next year.

But both Singapore Airlines and Qantas, with a combined 22 A380s still to be delivered, said on Tuesday they had not been informed of any delivery delays. Qantas said it expected none.

“I can confirm that Rolls-Royce is arranging to supply some new engines from the production line to replace some engines removed from the serviced aircraft,” an Airbus spokesperson said, without saying which airlines would receive those engines.

The Airbus A380 — the world’s largest passenger aircraft with a list price of about $350-million — has been hit by safety concerns after a Rolls-Royce engine partly disintegrated mid-flight, forcing a fully laden Qantas plane to make an emergency landing on November 4.

Airlines using the Rolls-Royce Trent 900 engines have been ordered by European aviation authorities to undertake major tests, which analysts said were so strenuous they would likely disrupt schedules.

“Until this problem is fully resolved I think the situation with the delivery of A380 to customers … will be in jeopardy,” Standard & Poor’s analyst Sukhor Yusof said.

Airbus said last week that the problem with Rolls-Royce engine could have an impact on its delivery target for 2011.

The price to pay
Airbus is in the process of arranging for engines to be taken off the A380 production line in Toulouse in France and shipped to Sydney to be fitted to the grounded Qantas aircraft, according to a report in the Aviation Business, which cited Airbus chief operating officer John Leahy in Sydney last week.

Qantas’ fleet of six A380 aircraft have remained grounded since the incident earlier this month.

“The cost is roughly $1-million for Qantas for each day the A380 is grounded. But the biggest issue is reputational. It’s down to the consumer and there’s a price to pay there as well,” an Australian analyst, who declined to be identified, said.

However, the problem would not lead to cancellation of orders as it was the problem with the engine instead of the airframe, he added.

Qantas — set to take five A380s by the end of next year, including three within the next few months — said it had not been notified of any delivery delays and expected deliveries to remain on schedule.

Singapore Airlines spokesperson Nicholas Ionides said the carrier had not been informed by Airbus of any delay on its A380 delivery schedule.

The world’s second-biggest carrier by market capitalisation currently operates 11 A380s and is scheduled to receive eight more before end-March 2012.

Rolls-Royce shares are down nearly 9% since the incident. Qantas shares have lost about 5% since then, while Singapore Airlines shares have been flat. – Reuters