Airbus seeks engine compensation

Aircraft manufacturer wants Rolls Royce to compensate it for production delays following engine blowout on Qantas plane.

A recent mid-air engine blowout aboard a Qantas Airbus A380 has sparked widespread concerns over air safety [AFP]

Airbus has said it will seek compensation from Rolls Royce after one of the British manufacturer’s engines failed on a Qantas A380 superjumbo.

The European aircraft maker said on Thursday that current production was “far from normal” and it was incurring additional costs due to Rolls Royce’s engine problem.

“We will seek financial compensation from Rolls Royce,” an Airbus spokesman said.

Rolls Royce said last week that the failure of a “specific component in the turbine area of the engine” caused the fire and mid-air blowout on the Qantas flight over Indonesia shortly after it took off for Sydney.

The partial disintegration of the engine mid-flight forced the jet, which had hundreds of passengers on board, to make an emergency landing in Singapore.

Engine replacement

Airbus’ move follows a statement by Qantas earlier on Thursday that Rolls Royce may have to replace up to 40 such engines across various carriers’ A380 fleets.

“Rolls-Royce are still working through the criteria for which engines need to be changed,” Alan Joyce, the Qantas chief executive, said in Sydney.

“… with an issue as complicated as this, Rolls Royce has no choice [but to ask Airbus to return some A380 engines]”

Howard Wheeldon, analyst, BGC Partners

It is believed that around 80 Trent 900 engines are currently in use, or about to be commissioned.

Qantas, Singapore Airlines and Germany’s Lufthansa all fly Airbus A380s powered by the same engines.

A spokesman for Airbus said: “I can confirm that Rolls-Royce is arranging to supply some new engines from the production line to replace some engines removed from the serviced aircraft.”

The Airbus A380, which cost $16.3bn to develop but has struggled to attract airlines in major markets, is the world’s largest passenger aircraft with an average list price of about $350m.

Peter Harbison, the executive chairman for the Centre for Asia Pacific Aviation, told Al Jazeera that the engine failure was “still something that’s obviously reflecting fairly badly on the manufacturer”.

“It’s rather uncertain what’s exactly involved [in replacing the engines],” he said.

“If it’s replacement of 40 engines, that’s a big and time-consuming production. If it’s modification, then it’s not quite such an issue, as long as they get it right this time.”

Rolls Royce’s move could be another blow to a much-delayed A380 programme as Airbus was scheduled to deliver more than a dozen Rolls Royce-powered A380s – primarily to Singapore Airlines, Qantas and Lufthansa by the end of next year.

But both Singapore Airlines and Qantas, with a combined 22 A380s still to be delivered, said on Tuesday they had not been informed of any delivery delays.

Customer reaction

Laurence Barron, Airbus’ China chief, said the first delivery to China Southern Airlines Co Ltd, China’s first A380 customer, would also go ahead as planned for next summer.

Airlines using the Rolls Royce Trent 900 engines have been ordered by European aviation authorities to undertake major tests, which analysts said were so strenuous they would likely disrupt schedules.

Shares in Rolls Royce, which on Friday said fixing the fault would lead to only slightly slower profit growth, have suffered during its probe.

They were 0.2 per cent down at 596.50 pence by 11:30 GMT on Tuesday, around nine per cent below their last trade before the Qantas incident.

Airbus parent company EADS has lost five per cent since the incident and hit a one-month low on Monday. Its shares were 1.3 per cent down at 17.78 euros.

Qantas is down 4.9 per cent since the incident.

“I suppose with an issue as complicated as this, Rolls Royce has no choice [but to ask Airbus to return some A380 engines]”, Howard Wheeldon, a BGC Partners analyst, said.

He said there would “definitely be a financial hit” for Rolls Royce because of the move.

Airbus said last week that the problem with the Rolls Royce engine could have an impact on its earnings and delivery target for 2011 but did not give details, and airlines contacted on Tuesday had no knowledge of delivery timetable changes.

Source : Al Jazeera, News Agencies


More from Economy
Most Read