Air New Zealand global passengers face more disruption from problems with some of the Rolls-Royce engines on its Dreamliners.
New inspections will lead to additional disruption for the 380 Package C engines now in-service with airlines. Rolls-Royce are reprioritising various items of discretionary spend to mitigate these incremental cash costs and its guidance for 2018 FCF remains unchanged at Group FCF for 2018 of around £450m +/- £100m.
This will unfortunately lead to additional disruption for Rolls-Royce customers.
On Friday Rolls said it had made a decision to increase the number of inspections after the implications of another problem, this time with the compressor, became clear.
Citigroup reiterated its "buy" rating on the British engine maker this week, valuing the shares at 1,083p, while Liberum Capital continues to see the company as a "hold, ' with a price target of 875p on the stock".More news: Defiant no further, Arizona governor bends to teacher requires
General Electric engines used on some 787s are not affected.
It adds that it will work with Boeing and the 787 customers affected in an effort to reduce disruption.
The required maintenance of some Trent 1000s has led to a shortage of the engine type while the affected parts are replaced and returned to service.
East said Rolls was working with Boeing and airlines to minimise the disruption.
The warning by Rolls-Royce comes ahead of anticipated announcements by United States and European aviation regulators, who are expected to issue guidance to airlines as soon as Friday. "We recognise that the application of these actions may cause additional disruption to our airline customers". Virgin has also leased three Airbus A330-200s to help cover its flying programme.More news: Crosby off to a great start in 2018 Stanley Cup Playoffs
A Virgin spokeswoman said it had been aware of the increased inspections announced today and that the cover it had in place would be sufficient.
An existing EASA Airworthiness Directive for the Package C engine requires inspections of an IPC blade at certain flight cycles. "Air New Zealand also has Trent 1000 TEN model engines in its 787 fleet and these are unaffected".
Air New Zealand is one of the airlines affected by the problem, with nine of the Package C engines, said it expected there would be some impact on its global schedule as a result of the additional checks.
In March, Rolls said the cash hit from the problem should peak at £340mn in 2018 before falling in 2019.More news: Pence to take hard line on Venezuela, promote trade