Rolls lowers profit expectation after Qantas engine failure

Concerning the failure, R-R said that immediately following this incident a regime of engine checks was introduced on the Trent 900s to understand the cause and to ensure safe operation. These had been conducted in parallel with a rigorous examination of all available evidence, including data from the damaged engine and its monitoring system, analysis of recovered material and interrogation of the fleet history. The investigations have led Rolls-Royce to draw two key conclusions. First, as previously announced, the issue is specific to the Trent 900. Second, the failure was confined to a specific component in the turbine area of the engine. This caused an oil fire, which led to the release of the intermediate pressure turbine disc. Rolls-Royce added that its inspection process will continue and will be supplemented by the replacement of the relevant module according to an agreed programme. These measures, undertaken in collaboration with Airbus, its Trent 900 customers and the regulators had regrettably led to some reduction in aircraft availability, Rolls said. The programme would enable our customers progressively to bring the whole fleet back into service. Meanwhile, in a management statement for the period 1 July to 11 November, the company said that trading across its businesses had progressed in line with its July guidance for modest growth, at which time it expected profits to grow by between four and five per cent compared to 2009. However, as a result of the Trent 900 incident, partially mitigated by better performance in its marine and defence businesses, the Rolls-Royce Board now expects underlying profit growth for the full year to be slightly lower than previously guided. Chief executive Sir John Rose (pictured) said: "Safety is the highest priority of Rolls-Royce. This has been demonstrated by the rapid and prudent action we have taken following the Trent 900 incident. We have instigated a programme of measures in collaboration with Airbus, our Trent 900 customers and the regulators. This will enable our customers progressively to bring the whole fleet back into service. We regret the disruption we have caused. "This event and the consequent actions will have an impact on the Group's financial performance this year. However the scale of our order book, the breadth and mix of our portfolio, the global nature of our business and our strong balance sheet makes Rolls-Royce a resilient business, and we expect continued underlying profit growth in 2010".