2012 OUTLOOK - AIRLINES
19th December 2011
In a trading update, Rolls-Royce has announced a longer timeline for a final fix to the improved high pressure turbine (HPT) blade for Trent 1000 TEN engines until 2021. Rolls-Royce said that based upon recent testing and its detailed technical evaluation, it has reset its financial and operational expectations for the Trent 1000 TEN “based on a more conservative estimate of final HPT durability”.
Rolls-Royce has been dealing with three significant technical issues which have affected each of the three variants of the Trent 1000 (Package B, Package C and TEN). Of the nine fixes therefore required, the manufacturer has so far designed eight and certified seven which are now being incorporated into the fleet, confirmed the company. A new HPT blade for the Trent 1000 TEN variant is the final modification required.
Ahead of plans to start incorporating this into the fleet in early 2020, Rolls-Royce completed a detailed technical evaluation of the proposed HPT redesign, where it was subsequently found to fail to deliver a sufficient level of enhanced durability. As such, Rolls-Royce says that an improved blade is unlikely to be ready before the first half of 2021.
“Through our work we have significantly improved our understanding of the issue,” said CEO Warren East in a trading update. “We are now able to reset our financial and operational expectations for the Trent 1000 TEN on the basis of a subsequent final HPT design, with a more conservative durability estimate that we are confident we can deliver. This estimate is lower than our initial target but sufficient to meet the needs of our customers, and allows us to update our forecasts of future shop visits and maintenance costs. This work will provide customers with a clearer view of their fleet’s servicing requirements and provide investors with a clearer view of future costs.”
To minimise the impact on customers, Rolls-Royce has accelerated investments in additional maintenance capacity and spare engines to reduce disruption. These additional near-term costs of customer disruption and remediation shop visits, as well as provisions against future losses, are likely to result in an exceptional charge of c.£1.4bn to Rolls-Royce operating profit in FY 2019.
“My top priority is improving customer confidence in the Trent 1000,” added East. “We are today announcing additional action to further expand our maintenance capacity and increase our stock of spare engines. We deeply regret the ongoing disruption caused to customers. These steps, which build upon progress made to date, will further reduce disruption to our airline customers and give them the certainty that they need.”
As part of its new commitment to grow its MRO network, Rolls-Royce has announced that part of the Rolls-Royce Deutschland site in Dahlewitz will transition into an overhaul services hub with the capability of handling widebody engine overhauls, while Rolls-Royce Canada site in Montreal, which currently services business jet engines, will also be repurposed to become a widebody engine overhaul facility.
The company has further secured the use of an additional test bed at Dallas Fort Worth to support Trent 1000 engine tests and is investing to expand its capacity in Derby and double its overhaul capacity at Heathrow. “This investment marks a step-change in our MRO expansion plans and will assist us over the longer term in meeting the servicing demands of our growing installed base,” said East.
The company is increasing its investment in engineering to support the specialist team that has been assembled to focus on resolving the final design and engineering challenges on the Trent 1000. “This effort will be aided by a bespoke facility we have created in Derby dedicated to Trent 1000 test engines, which is now fully operational, enabling faster testing and validation of new component designs,” said East.