Published: Tue, June 12, 2018
Markets | By Otis Pena

Rolls Royce says Trent 1000 problem now found in B engines

Rolls Royce says Trent 1000 problem now found in B engines

Rolls-Royce has warned it has identified more problems with its engines that have forced airlines to ground and lease replacement planes.

City A.M understands that the company will announce the job cuts at an analyst briefing on Friday, according to sources close to the matter.

Up to 10 per cent of the Rolls-Royce workforce could be cut as the engine maker seeks to thin middle management against a backdrop of continued engine issues.

It has replaced the fan blades on turbines on all Boeing 787 airplanes after cracks and corrosion were found on jets operated by Japan's ANA airline.

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 on Monday.

Rolls said it will carry out one-off inspections of the Trent 1000 Package B fleet "to further inform our understanding".

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The engineering giant said that a potential fault had been discovered that may affect 166 of its "Package B" Trent 1000 engines.

While the check-up visits will incur "some additional cost", Rolls-Royce stood by its 2018 free cash-flow estimate of £450 million (Dh2.2 billion), plus or minus £100m.

Rolls-Royce is to announce job cuts this week as part of its "simplification" programme created to cut costs at the manufacturer. 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. Roundview Capital LLC bought a new stake in Rolls-Royce Holdings plc (OTCMKTS:RYCEY) during the 4th quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission.

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 added that we expected this programme to deliver a significant reduction in costs and assist us in improving performance across the group as a whole, and that we would provide clarity of these benefits at an event for financial analysts and investors on 15 June".

Following an agreement with the USA 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.

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