02 September 2024 , 20:52
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Shares in engineering firm slide as airline cancels flights after finding engine component failure on aircraft
Shares in Rolls-Royce, the leading British engineering company, were the biggest faller on the FTSE 100 on Monday after Cathay Pacific Airways identified an engine component failure on an aircraft and began inspecting its entire Airbus A350 fleet.
The Hong Kong-based airline, which has cancelled 24 return flights so far while it performs the “precautionary” checks, said a number of aircraft would be out of service for several days. Shares in Rolls-Royce closed down 6%.
Cathay said the engine component failure was identified in the A350 aircraft that was forced to return to Hong Kong during a flight to Zurich on Monday. It did not give further details of the component but said it was the first of its type to suffer such failure on any A350 aircraft worldwide.
The carrier said in a statement: “Cathay Pacific has fully complied with all maintenance requirements of the engine manufacturer and stringent maintenance procedures are in place to ensure that our fleet is always operated safely … We immediately brought this issue to the attention of the aircraft and engine manufacturers as well as our regulators.
“As a precautionary measure, we also proactively initiated a fleet-wide inspection of our 48 A350 aircraft. This thorough inspection process is well under way and will be completed today. Thus far we have identified a number of the same engine components that need to be replaced, spare parts have been secured and repair work is under way.”
Keith Brown, the Cathay Pacific engineering director, said: “Each aircraft is undergoing a rigorous inspection. Upon completion, the aircraft cleared for operation will return to service, while those identified with technical issues will undergo further repair and maintenance work. Meanwhile, we are liaising with the Hong Kong civil aviation department and the aircraft and engine manufacturers. We sincerely apologise for the inconvenience caused and appreciate our customers’ patience and understanding.”
Rolls-Royce, which has been contacted for comment, told Reuters it was aware of the incident and said it was working with Cathay, Airbus and the relevant authorities.
Its shares had seen a remarkable turnaround since early last year, more than quadrupling under the leadership of Tufan Erginbilgiç, who has shaken up the group since becoming chief executive at the start of 2023.
The company builds and maintains engines for aircraft such as the Airbus A350 but also services and maintains the engines afterwards while the aircraft are flying. In recent months the engineering group has won a number of contracts for its Trent engines including with Cathay Pacific.