Rolls-Royce Close to Resolving Costliest Jet-Engine Issue

(Bloomberg) -- Rolls-Royce Holdings Plc is increasingly optimistic that it can move beyond the jet-engine issues that have cost it billions of pounds and provided an unwelcome distraction during years of restructuring work.

Final fixes to a litany of glitches that plagued the Trent 1000 turbine powering Boeing Co.'s popular 787 Dreamliner should be made this year, engineering and technology director Simon Burr said. Blade cracks in the Trent XWB used on Airbus SE's rival A350 wide-body have turned out not to be a major concern.

“After a difficult three or four years, I feel confident about the durability of the engines and the future,” Burr said in an interview at Rolls-Royce's main manufacturing base in Derby, England. “We have learned a lot.”

Issues with the Trent 1000 have been the biggest cash drain on Rolls, with the cost set to reach more than 2 billion pounds ($2.8 billion) through 2023. The U.K. firm has also lost market share to General Electric Co., which offers a rival 787 engine. Coming to grips with the problems would help draw a line under a saga that's also soured relations with major customers like British Airways, leaving it in a better position to rebound from the coronavirus slump.

Rolls-Royce shares gained 1.9% to 102.8 pence as of 12:15 p.m. in London. The stock has slipped 7.9% so far this year on top of a near 53% drop in 2020 as the pandemic continues to weigh on demand for the firm's wide-body engines.

Dreamliner Fix

Chief Executive Officer Warren East said in February last year that the company had all but completed required design changes on the Trent 1000. The only work still outstanding involved improving the high-pressure turbine blades, which were deteriorating faster than expected.

Rolls-Royce is currently testing the high-pressure turbine, focusing on replicating stresses bearing on the engine during ascent to cruising altitude, which Burr said is more exacting for a modern airliner than takeoff itself.

“The temperatures inside the engines stay very high during the climb so we have changed the way we test,” he said. “The test cycle is now longer to reflect climb conditions. We are very pleased with the results so far.”

Engines are being subjected to 500 simulated flights and will be checked again after 1,000 and then 2,000 trips to “give us absolute confidence in the fixes.”

A350 Relief

Since the tests involve durability and regulatory and certification tests have already been completed, no further sign-off will be required from the European Union Aviation Safety Agency, a Rolls spokeswoman said.

The company will carry the fixes through to the Trent 7000 engine that powers Airbus A330neo aircraft and is based on the Trent 1000.

Problems with the XWB used on the A350 were disclosed last August, stirring further concerns about the durability of Rolls engines. The questions were particularly acute since the engine maker's finances were dealt a severe blow by the grounding of flights after the Covid-19 outbreak.

Burr said there have been no in-flight incidents with the XWB, and that the scope of the problem afflicting compressor blades on engines in service for four or five years hasn't spiraled, making the company “quite confident we can put this problem to bed.” A fix is set to be tested later this month.

Breathing Room

“One benefit of the pandemic is that Rolls-Royce has had the capacity to test both the Trent 1000 and Trent XWB far more intensively,” said Jefferies analyst Sandy Morris. “However, the real test will come when the engine fleet is working hard again.”

Morris estimates that 60% to 70% of 787s are now active as travel curbs ease, rising as high as 90% for the A350. The full wide-body fleet will likely be back in service by mid-2022, he said.