Why Qantas had to bring Rolls to court

Joyce under A380.JPG

What Qantas wants to avoid is being back in the spotlight with its A380, but upwards of a half billion dollars is at stake. Photo: Will Horton

Reading the details from Qantas’ affidavit and claim against Rolls-Royce, the manufacturer of its Trent 900 engine that experienced an uncontained failure on 4 November, you cannot help but think Qantas would not want these details to get out.

The court documents thoroughly describe a flaw in the 72,000 lb variant that would require the engines to be replaced after 75 maximum thrust take-offs. Fixing the problem is not going to be easy, and thus casts doubt on when Qantas can resume normal operations, especially to Los Angeles.

Qantas would not want these details to get out, but it had no choice. Qantas said in its affidavit it held a

Serious concern that, if given notice of this application and Qantas’s intention to commence these proceedings, Rolls-Royce would apply forthwith to the English courts for an anti-injunction suit and that, if granted, there is a high degree of likelihood that Qantas would not only be restrained from pursuing these proceedings but that it would also be shut out from having an Australian court determine whether or not it should entertain a significant claim brought under an Australian statue by an Australian company with regard to conduct which relevantly occurred in Australia.

Merrill Lynch estimates the A380 grounding could cost Qantas A$207 million. That’s nearly twice the carrier’s $112m annual result for the year to 30 June.

And every day four of the A380s remain on the ground and the two flying aircraft face flight restrictions, that figure goes up.

The trade off to saving literally millions of dollars by being able to sue Rolls if the two cannot reach a settlement is having to reveal enough details–perhaps not commercially sensitive (those are redacted) but certainly insalubrious–to make a case in court. That trade off has been made.

ur legal move is designed to protect our position into the future,” a Qantas spokesman says. “Having any claim heard in Australia in relation to the Trade Practices Act is, we believe, an appropriate approach. Otherwise we remain in active discussions with RR.

For the short- and medium-term we have gained knowledge from this case. But we have yet to see the long-term effect: the relationship going forward between Rolls-Royce and its airline customers.

For Qantas to think Rolls would attempt to block Qantas’ legal action for a problem that is very damningly Rolls-Royce’s fault is one of the first signs of permanent damage. The fall out from that–could Rolls face a competitor for supplying the A350 with engines?–is yet to be seen.

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2 Responses to Why Qantas had to bring Rolls to court

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