The Boeing 787-9 Dreamliner of Air Tahiti Nui performs a demonstration flight at Paris Air Show, in Le Bourget, north east of Paris, France, on June 18. (AP Photo/ Francois Mori)

The Boeing 787-9 Dreamliner of Air Tahiti Nui performs a demonstration flight at Paris Air Show, in Le Bourget, north east of Paris, France, on June 18. (AP Photo/ Francois Mori)

Rolls-Royce says 787 Dreamliner engine fix will be costly

An improved blade for the latest version of its Trent 1000 turbine won’t be ready until 2021.

By Christopher Jasper / Bloomberg

Rolls-Royce Holdings Plc said it will spend more to carry out fixes for engines it makes to power Boeing Co.’s 787 Dreamliner, a move that will eat into full-year earnings and cash flow.

An improved blade for the latest version of its Trent 1000 turbine won’t be ready until 2021, Rolls said in a statement Thursday. That will force the U.K. manufacturer to stock up on spares and expand maintenance facilities for Dreamliners that require temporary fixes to keep flying.

The 400 million-pound ($515 million) expense, combined with costs of customer disruption and provisions against future losses on contracts, means the London-based company faces a one-time charge of 1.4 billion pounds against 2019 operating profit.

The extra spending will allow Rolls-Royce to meet a target of returning groundings of 787s equipped with its engines to normal levels in the second quarter of next year, Chief Executive Officer Warren East said on a conference call. Dreamliner operators affected by groundings have included British Airways, Norwegian Air Shuttle ASA and Virgin Atlantic Airways Ltd.

All told, cash costs for in-service work on 787 engines is now expected to total 2.4 billion pounds through 2023. Design glitches have plagued the Trent program since 2016, eating into Rolls-Royce’s share of turbines for 787 jets against rival engine maker General Electric Co.

Last year, Rolls-Royce said the intermediate pressure turbine blades, which had already been flagged for replacement, weren’t lasting long enough to meet maintenance schedules. Rolls said in September that it was facing additional delays to replace components.

While overall trading has improved since the half year, Rolls-Royce’s power-systems arm has also deferred some projects, with sales growth for the year now set to be in the low- to mid-single-digit range.

Shares of Rolls-Royce fell as much as 3.9% before trading 1.2% lower at 767.40 pence as of 9:56 a.m. in London. The stock has declined 7.5% this year.

Talk to us

More in Herald Business Journal

Worst jobless rate in the state: Snohomish County at 20.2%

In April, 91,383 were unemployed in the county. The aerospace sector was hit especially hard.

Small business relief effort inundated with 850 applications

The economy in and around Everett has struggled amid fallen revenues and uncertainty about the future.

‘Hundreds of millions’ in bogus jobless benefits paid out

Washington state has been reported as the top target of a Nigerian fraud ring.

Marysville drivers wait overnight for Chick-fil-A opening

The popular chicken restaurant began serving at 6:30 a.m. Thursday. Police plan to guide traffic for days.

Tulalip Resort Casino and Quil Ceda Creek to open Tuesday

Guests must wear a mask and occupancy is limited, the Tulalip Tribes announced Wednesday.

As Arlington gym closes, a Snohomish barber continues to cut

PA Fitness closed after the state attorney general filed a lawsuit. “We would lose,” a co-owner conceded.

FAA says it will let Boeing employees vouch for plane safety

The agency defended the current system but identified areas for improvement. Some lawmakers disagree.

Fraudsters using local identities for phony jobless claims

The Everett School District, for example, saw about 310 false claims using employees’ personal information.

State sues an Arlington gym for violating stay-home order

“It is my constitutional right to be open,” says a co-owner of PA Fitness. He plans to countersue.

Heavy traffic expected when Chick-fil-A opens in Marysville

The city warns there will likely be delays for days along 88th Street NE. near the new restaurant.

Somers announces $14 million in relief for small businesses

One program will target aerospace companies. The other will focus on service and retail industries.

Paine Field terminal to close for 71 days of ramp repairs

Alaska is down to one departure per day due to the coronavirus outbreak’s effect on travel.