Rolls-Royce says extra plane engine checks will drive up costs

Rolls-Royce has warned that extra checks on one of its plane engines will add unexpected costs and cause further disruption for airlines including BA, Virgin and Norwegian.

In an embarrassment for one of the UK’s top engineering groups, the company said that more inspections will be needed to tackle problems with its Trent 1000 engines, which are used in Boeing’s Dreamliner 787.

The issue concerns parts in 380 engines wearing out sooner than planned and affects up to 170 planes in use by airlines. The Dreamliners will need to be grounded for checks and replacements.

Rolls-Royce said last month it was facing a £370m bill this year because of the engines, but on Friday indicated that replacing more parts and paying airlines compensation will push that figure higher.

“While the compressor technical issue was known at the time of our results, the requirement for more regular inspections will lead to higher than previously guided cash costs being incurred during 2018,” it said in a statement.

The engineering giant claimed that its cash flow for 2018 would be unaffected at around £450m, as it would cut non-essential spending on travel, IT upgrades and other costs to offset the financial impact. The company did not put a figure on the extra cost of the inspections.

Warren East, the company’s chief executive, said: “We sincerely regret the disruption this will cause to our customers and 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.”

The warning by Rolls-Royce comes ahead of anticipated announcements by US and European aviation regulators, who are expected to issue guidance to airlines as soon as Friday.

The US Federal Aviation Administration (FAA) plans to reduce the amount of time the affected planes can fly on a single engine after a failure of the other. The time limit would drop as low as 140 minutes, compared with the current window of 330 minutes, a source familiar with the plans said.

This effectively curtails operations across oceans or remote areas.

Virgin Atlantic said it had up to four 787s grounded at any one time while it organised replacement engines from Rolls. Virgin has also leased three Airbus A330-200s to help cover its flying programme.

A Virgin spokeswoman said it had been aware of the increased inspections and that the cover it had in place would be sufficient.

Boeing said about 25% of the 787 Dreamliners flying were powered by the engine and it was deploying support teams to mitigate service disruptions.

Rolls-Royce’s share price fell about 1.5% on the news.