Rolls-Royce ups estimate to fix Boeing Dreamliner engines

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

Damage to turbine blades on a Rolls Royce Trent 1000 engine, which forced an Air New Zealand Dreamliner to return to Auckland Airport just after takeoff in December.

Britain's Rolls-Royce said on Friday it would step up the number of inspections it carries out on the Trent 1000 engines, leading to additional disruption for customers and higher costs.

In March, Rolls-Royce told airlines to check a specific part of the Trent 1000 engine compressor on all planes earlier than usual.

The engine manufacturer has increased its maintenance, fix and overhaul capacity by 300 percent over the past two years and has mobilized support teams to cope with Trent 1000 problems.

"We sincerely regret the disruption this will cause to our customers", CEO Warren East said in a statement.

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.

Airlines operating some of the engines have been ordered by global safety regulators to carry out more regular checks on them, meaning they will be grounded much more frequently for maintenance.

Citigroup reiterated its "buy" rating on the British engine maker this week, valuing the shares at 1,083p, while Liberum Capital continues to see the company as a "hold, ' with a price target of 875p on the stock". Its civil aerospace business is engaged in the development, manufacture, marketing and sales of commercial aero engines and aftermarket services.

That will lead to more disruption for its customers, with 380 of the engines in question now in service with airlines, with the firm adding that the new approach will not affect Trent 1000 Package B engines and Trent 1000-TEN engines.

It adds that it will work with Boeing and the 787 customers affected in an effort to reduce disruption.

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

An existing EASA Airworthiness Directive for the Package C engine requires inspections of an IPC blade at certain flight cycles. The additional inspections does not impact Trent 1000 Package B engines, or Trent 1000-TEN engines.

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

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