A year into the job, Rolls-Royce boss Warren East’s to-do list shows no signs of shrinking. The engine maker had already braced shareholders for a torrid 2016, due to cyclical pressures and worse-than-expected market conditions, when it emerged that All Nippon Airways is to replace 100 Boeing 787 Trent 1000s after erosion and cracking were found on turbine blades.
While the company is yet to place a cost on what is likely to be a three-year fix, the revelation is certainly a reputational blow for a firm that has had its share of bad headlines. East’s other worries include declining output of the Trent 700 for the Airbus A330, falling aftermarket revenues on older engines, and sluggish sales of large business jets, several of which are Rolls-powered.
Analysts love East. He is a frugal doer progressing strongly on an ambitious cost-cutting plan to make Rolls-Royce leaner, nimbler and less the privileged Ministry of Propulsion. The ramp-ups of the A350’s Trent XWB and the A330neo’s Trent 7000 – with resultant aftermarket revenues – bode well. The A380 may be ailing, but R-R, thanks to last year’s about-face by Emirates, dominates the engine backlog.
East may also take wry consolation from the fact that he is not the only one with problems. GE Aviation must modify about 600 GEnx engines – the Trent 1000’s rival on the 787 – to sort a transfer gearbox problem suspected in a number of in-flight shutdowns.
Source: Flight International