Rolls-Royce PLC

The engine costs arose primarily on 380 Trent 1000 "Package C" engines (which entered service in 2013 and account for 78% of the Trent 1000 engines currently in use), and a small number of "Package B" engines (166, which entered service in 2012), with both fitted to the Boeing 787 Dreamliner. This was due to lower-than-expected durability of turbine blades and compressor rotor blades, and the subsequent costs to repair, replace, redesign, and install new parts. Costs have also been incurred due to significant disruption caused to airline customers, including having to cancel flights, modify flightpaths, or switch to different aircraft while engine inspections are carried out. Rolls-Royce continues to make good progress in lowering the number of aircraft on

...Credit measures should improve through fiscal 2019 to be more commensurate with the '###+' rating, after fiscal 2018 credit metrics were effectively non-meaningful due to the peak in exceptional costs. Rolls-Royce is incurring substantial cash costs of about ú1.5 billion in total, due to the underperformance of its Trent 1000 and 900 engines. These platforms represent a meaningful 19% of the company's wide-body installed engines in service with multiple airlines, and 21% of the wide-body order book. The cash costs were first disclosed in March 2018, at an estimated total of about ú750 million, to be incurred during 2017-2019. The level of disclosed costs has since doubled to about ú1.5 billion, due to the need for additional inspections in 2018 and 2019, and the disclosure of additional costs in 2020 and thereafter. In 2017, ú170 million of cash costs were incurred and ú431 million in 2018. The remaining costs are scheduled to be paid as follows: ú450 million in 2019, ú350 million in 2020,...

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