Rolls-Royce says extra plane engine checks will drive up costs

The company makes engines for jets

It says, however, that the need for more regular inspections will result in higher cash costs that those in its previous financial guidance.

Airlines have already been forced to alter schedules or lease other aircraft, but the latest issues could be more far-reaching. Finally, JPMorgan Chase reissued a "neutral" rating and issued a GBX 970 ($13.71) target price on shares of Rolls-Royce in a research report on Friday, January 5th.

About 25 percent of the 787 Dreamliner fleet is powered by this Rolls-Royce engine variant.

The board said it was reprioritising various items of discretionary spend to mitigate the incremental cash costs, and its guidance for 2018 free cash flow remained unchanged for 2018 of around £450m.

The increased inspection frequency is driven by further understanding of the in-service durability issues with the Trent 1000 Package C engine's intermediate pressure compressor, a condition that was first revealed earlier this year.

Boeing said the 787 has safely flown more than 3.2 billion miles since entering commercial service in 2011. The news comes after the company recently warned that the cost for fixing the issues with its Trent 1000 and Trent 900 engines would broadly double from the total cash cost in 2017 of £170 million and reach a peak this year.

"We will be working closely with Boeing and affected airlines to minimise disruption wherever possible".

"It's disappointing and frustrating that our new aircraft don't work the way they are supposed to", spokesman Lasse Sandaker-Nilsen said, adding that it had cancelled a flight from Paris to NY next week as a result.

Virgin Atlantic has up to four 787s grounded at any one time while it sources replacement engines with Rolls and has also leased three Airbus A330-200s to help to cover its flying programme.

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.

In December the EASA ordered airlines to replace some Trent 1000 engines.



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