Rolls-Royce Slowly Recovering from £2.9bn Loss

Aviation World News

Engineering giant Rolls-Royce, a British aircraft engines manufacturer, plunged deep into losses last year, as it enhanced the charge for fixing issues with its Trent 1000 engines. It had earlier announced 2018 results reporting £2.9 billion in losses.

The main reasons for such a massive setback as per the company are:

  • long-overdue mechanical problematic issues with Trent 1000 engines.

Number of Trent 1000 powered aircraft operated by such major airlines as British Airways, Virgin Atlantic, Air New Zealand and some others, were kept out of service due to engine problems. In 2018 these issues cost to Rolls-Royce £790 million.

In a statement the company said it “identified the problem area and is implementing the fixes to improve the health of the Trent 1000 fleet”. The issues would take “some years” to fix. It said parts in its Trent 1000 engines were wearing out faster than expected but that it “had a solution” to the problem.

  • Trent 900 engines program was severely affected by Airbus decision to cease the production of the largest commercial jet in the world, A380. Rolls-Royce stated that it has to absorb a £186 million hit because of this Airbus decision.

Analysts conclude that this is what happens when the developed new engines are not up to the mark. The Trent 900 fitted on A380 and Trent 1000 fitted on B787 can only manage a few thousand cycles before they need to be removed and stripped.

Compare this to other Rolls-Royce engines like the Trent 700 or RB211 which go up to 15000-20000 cycles before removal.

This analysis reckons there will be quite a few more losses when existing airlines start parking Rolls-Royce powered A380s prematurely.

This Rolls-Royce situation happened because a sense of complacency crept in. There are several global firms like Rolls-Royce who are surviving just because of their glorious past rather than a promising present and a visionary future. Rolls-Royce was synonymous with quality but alas no longer now.

Rolls-Royce has spent a lot on R&D but possibly it spent at the wrong place. Despite so much of research, it is baffling to learn that Rolls-Royce engine parts wear faster than expected.

Rolls-Royce has decided to withdraw from the current competition to power Boeing’s proposed middle of the market – or New Midsize Airplane (NMA) – platform. Rolls-Royce revealed it is “unable to commit to the proposed timetable to ensure it has a sufficiently mature product which supports Boeing’s ambition for the aircraft and satisfies its own internal requirements for technical maturity at entry into service.”

Boeing won’t buy their engines until they sort out the last lot they sold them; Trent 1000 has the potential to be a great engine but at the moment its a massive headache for all who bought it.

However, there are some good news too. Overall, revenues in 2018 were up to £14.3 billion compared to £12.8 billion in 2017 with the commercial engines business representing 50% of income.

Engineering is indeed a tough business. There are no fast bucks earned here like in finance, FMCG or any other service sector. Intensive R&D, creativity, attention to detail, being in sync with the market needs, and development speed are all very important. Dropping off in any of these areas can lead to a rapid and severe downturn in fortunes. Staying at the front of the pack is very expensive, since it is here where you’re competing with the best from the entire earth.

Jet engines push the boundries of what is possible. The thing is, its not the type of business which, if unsuccessful, just anyone could step in and fill the gap.

Rolls-Royce should accept the limits of their engines capabilities and just rely on the models it has made in the past instead of trying all such clever stuff.

World wide production of aircraft is increasing and air travel is always on the rise. The problem for Rolls-Royce is that the Trent 1000 has seriously impacted their reputation. The CFM leap also hasn’t been problem-free, but the current world trend is for single aisle aircraft with NEO/MAX engines, meaning further that Rolls-Royce is not in that zone of demand!

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