Rolls-Royce recovers from engine failure that caused Cathay Pacific flights to be cancelled
Cathay Pacific Airbus A350 aircraft at Kingsford Smith Airport on August 18, 2021 in Sydney, Australia. Cathay Pacific Airways Ltd., is the flag carrier of Hong Kong with its main hub at Hong Kong International Airport.
James D. Morgan | News Getty Images | Getty Images
Rolls Royce Stocks opened higher on Tuesday, recouping some of the previous session’s losses after Cathay Pacific has cancelled several flights after discovering technical problems with aircraft using British manufacturer Trent XWB-97 engines.
Rolls-Royce shares were up 4.6% at 8:46 a.m. London time on Tuesday, after falling 6.5% on Monday.
Cathay Pacific said Tuesday it had identified a faulty engine part on 15 of its Airbus A350 aircraft — a wide-body, long-range aircraft powered by Rolls-Royce engines. The problem was discovered after an engine part failed on a flight to Zurich operated by the airline from its Hong Kong base on September 2. The plane did not complete the flight and returned to Hong Kong.
The airline said three planes have been successfully repaired, with the remaining planes expected to return to service on September 7.
The incident led to the cancellation of nearly 40 flights on Monday. Cathay Pacific said future long-haul flights were not expected to be affected and customers would be offered alternative routes.
Details of the cancellations through September 7 will be announced by 2 p.m. local time on Wednesday, the company added.
Rolls-Royce confirmed on Tuesday that its Trent XWB-97 has been used on the aircraft. Investors are sensitive to such issues because Engine problems at Pratt & Whitney has caused significant delays in the delivery of some Airbus aircraft; and long chain of production problems at Boeing of the United States.
Rolls-Royce said the Hong Kong government had launched an investigation that limited the company’s ability to comment, but noted that it was “committed to working closely with the airline, aircraft manufacturer and relevant authorities to support their efforts.”
The company added that it will keep other airlines operating Trent XWB-97 engines fully informed of any relevant developments as necessary.
“While this news raises some concerns, our preliminary analysis suggests that the financial liability is manageable. As such, our positive view on the equity story remains unchanged,” Deutsche Bank analysts said on Tuesday.
