Shares of Rolls-Royce opened higher on Tuesday following a decline in the previous session after Cathay Pacific canceled several flights due to technical issues in aircraft using the company’s Trent XWB-97 engines. Rolls-Royce shares were up 4.6% at 8:46 a.m. London time, recovering from a 6.5% drop on Monday. Cathay Pacific identified an engine component failure in 15 of its Airbus A350 aircraft, which utilize Rolls-Royce engines. The issue was discovered after an engine failure on a Hong Kong to Zurich flight on Sept. 2, leading to the cancellation of around 40 flights.
Three of the affected aircraft have been repaired, with the remaining expected to be back in operation by Sept. 7. The airline assured that long-haul flights would not be affected, and alternative routes would be offered to customers. Information regarding cancellations up to Sept. 7 would be provided by 2 p.m. local time on Wednesday. Rolls-Royce confirmed that its Trent XWB-97 engine was used in the affected aircraft and stated its commitment to working closely with Cathay Pacific, aircraft manufacturer, and authorities involved in the investigation launched by Hong Kong officials.
Investors are closely monitoring the situation given the ongoing engine issues at Pratt & Whitney, causing delays in Airbus deliveries, as well as manufacturing problems at Boeing. Despite concerns raised by the incident, Deutsche Bank analysts expressed optimism in containing the financial liability and maintained a positive outlook on Rolls-Royce’s equity story. Rolls-Royce mentioned that it would keep other airlines that operate Trent XWB-97 engines informed of any developments as necessary. The company stated that the ongoing investigation by Hong Kong authorities hindered its ability to provide further comments at this time.
The cancellations and technical issues in Cathay Pacific’s A350 aircraft have caused a temporary disruption in the airline’s operations, affecting a significant number of flights. However, with repairs underway and plans to resume operations by Sept. 7, the impact is expected to be minimized, and long-haul flights are anticipated to operate as usual. Despite the challenges faced, Cathay Pacific assured customers that alternatives would be provided, and the situation would be managed efficiently to reduce inconvenience to passengers.
The incident highlights the importance of maintaining engine safety and reliability in commercial aircraft to ensure the smooth functioning of airline operations and passenger safety. Rolls-Royce’s collaboration with Cathay Pacific and relevant authorities demonstrates its commitment to resolving the issue promptly and transparently. As the investigation progresses, the focus will be on identifying the root cause of the engine component failures and implementing necessary measures to prevent similar incidents in the future. Overall, the incident underscores the complex and interconnected nature of the aviation industry, where collaboration and communication are essential to address challenges effectively.
