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Rolls-Royce takes hit on 787 and A380 blade flaws

Rolls-Royce has recognised a charge of £227 million ($315 million) in its full-year results relating to costs associated with addressing in-service technical issues on Boeing 787 and Airbus A380 engines.

The charges offset an increase in underlying revenues, up 12% to £3.8 billion, as the company delivered 483 large aircraft engines – a rise of 126 on the previous year – and generated a one-third increase in civil aerospace profit to £520 million.

Rolls-Royce is trying to deal with lower-than-expected durability issues affecting both the Trent 1000 for the 787 and the Trent 900 for the A380.

"These issues have required urgent short-term support including both on-wing and shop visit intervention which has resulted in increased disruption for some of our customers," it admits.

"We have continued to progress our understanding of both the technical and operational issues and we are making solid progress with longer-term solutions, largely through redesigning affected parts."

The problems have centred on compressor rotor blades, intermediate- and high-pressure turbine blades for the Trent 1000 as well as high-pressure turbine blades for the Trent 900.

Rolls-Royce has had to balance production demand against capacity constraints in blade manufacture and testbed availability exacerbated by these technical issues. It says it has expanded its Trent 1000 maintenance capacity since the intermediate-pressure turbine blade problem was initially identified.

The manufacturer expects its solutions to the Trent 1000 problems, including redesigned parts, to be "fully embodied" in the fleet by 2022.

While Rolls-Royce has been rolling out the latest enhanced version of the engine, the Trent 1000 TEN, it acknowledges that some early examples of this powerplant might "benefit" from "pro-active maintenance" to introduce parts not available when the engines were manufactured.

Rolls-Royce is also introducing an extended-life turbine blade for its A380 powerplant, the Trent 900, and it intends further redesigns to be available in 2020.

Aside from the charges for higher maintenance activity on the two engine models, the company estimates that the annual cash impact will "broadly double" this year from the £170 million recorded in 2017 – peaking over 2018 and falling by £100 million in 2019 as the majority of the work is undertaken.

Rolls-Royce has updated its forward estimates of revenues and costs across its long-term contracts, and has included a £148 million impact covering additional maintenance across the Trent 1000 and Trent 900 fleets, as well as increased customer support to "alleviate the impact of limited engine availability".

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