|Bid||720.00 x 0|
|Ask||775.00 x 0|
|Day's Range||721.80 - 737.60|
|52 Week Range||687.80 - 1,003.50|
|Beta (3Y Monthly)||0.62|
|PE Ratio (TTM)||N/A|
|Earnings Date||Aug. 6, 2019|
|Forward Dividend & Yield||0.12 (1.59%)|
|1y Target Est||974.81|
(Bloomberg Opinion) -- The high-pressure turbine blades in a Trent 1000 passenger jet engine have to withstand temperatures far above the melting point of the nickel alloy from which they’re made. It’s a fiendish technical challenge for the engine’s British manufacturer, Rolls-Royce Holdings Plc — comparable to trying to stop an ice cube melting inside a kitchen oven on full blast. The solution found by the company’s engineers was to blow cool air through tiny holes in the blades. Unfortunately this clever approach has encountered some unexpected problems.Boeing 787 aircraft operated by British Airways, Norwegian Air Shuttle, Virgin Atlantic and others have been grounded in recent months for inspections and repairs because the Trent 1000 engine blades have been degrading faster than anticipated. It’s the type of problem that’s becoming common in the industry as the demands placed on engines become ever greater.The expense of dealing with these things is rising too. Last week, Rolls-Royce quantified the cost of fixing various Trent 1000 issues at 2.4 billion pounds ($3.1 billion), a cash outflow the debt-laden manufacturer can ill afford.Few inventions have done more to transform our life over the past century than jet engines. They’ve let people travel faster and further, and they’re remarkably safe. Passenger fatalities like the one caused by a turbine failure on a Southwest Airlines flight last year are rare. Developed at enormous expense and using innovative new materials, the most recent “powerplants” (to use engines’ industry name) are comparatively quiet and fuel efficient.Yet these innovations have taken the technology closer to its technical limits and reliability issues have crept in. “By pushing the envelope on thrust and efficiency, things have started to go wrong elsewhere in the system,” says Nick Cunningham at Agency Partners. This is worrying because companies are under pressure to build even more efficient propulsion systems to curb carbon emissions. Rolls-Royce’s problems appear the most serious — some 40 787s powered by its engines are parked — but this is an industry-wide issue. Forced to ground planes and adjust flight schedules, airlines have resorted to leasing replacement aircraft and have told engine manufacturers to pay compensation.In September Tim Clark, the boss of Emirates, said manufacturers are delivering aircraft that don’t do what was promised. “Give us airframes and engines that work from day one. If you can’t do it, don’t produce them,” he said.The laws of science aren’t the only thing testing the engine makers. Airbus SE and Boeing Co. have brought several new passenger jets to market in quick succession and their powerplant suppliers have had to ramp up production rapidly. A lot of new demand is from emerging markets where dusty or polluted air can put additional strain on engines.Airbus production was thrown into chaos last year by engine glitches involving Pratt & Whitney’s geared turbofan (GTF) for the A320neo, Airbus’s top-selling jet. More recently the launch of Boeing’s 777x wide-body aircraft was pushed to next year after the premature wearing out of a General Electric engine component.It’s one thing for an engine to miss tough production targets, but quite another for engines to fail once they’re in service. “Engine manufacturers have always had teething problems but in four decades I’ve never seen anything like the list of technical issues they’re been having lately,” says John Strickland, director of JLS Consulting. This month India threatened to ground scores of Airbus A230neo jets operated by domestic carrier Indigo unless the Pratt engines were replaced by the end of January. The warning followed several incidents of engines shutting down in-flight.In October Lufthansa AG subsidiary Swiss temporarily grounded its Airbus A220(1) fleet so the Pratt engines could be inspected after a spate of powerplant failures (the debris from one such incident was recovered from a French forest last week). Since then Canadian regulators ordered the same aircraft not to operate at full power above a specified altitude.About 70% of airlines and lessors surveyed by Citi Research said groundings caused by engine issues were a key concern. Some are looking to operate mixed fleets to lessen the risk of one engine type being grounded. While that’s prudent, it’s more expensive than using a single type of equipment.The risk for engine manufacturers is that reliability issues cost them market share. Earlier this year Air New Zealand switched an order for 787 jet engines to GE after problems with its Rolls-Royce kit. Indigo placed a $20 billion order with the GE/Safran engine joint venture rather buy from Pratt (Pratt claimed the decision was price-related).The problems haven’t affected all new technologies. Rolls-Royce’s XWB powerplant for the Airbus A350 has proven reliable so far. The core gearing innovation underpinning Pratt’s GTF also appears to work as planned; a relief because it cost about $10 billion to develop. There’s more at stake, though, than airline flight schedules and manufacturers’ pride and profitability. As with the car industry, the aerospace sector is gearing up for an epochal effort to curb carbon emissions. Aviation accounts for 2%-3% of greenhouse gas emissions but the sheer volume of plane deliveries in coming years will counteract engine efficiency gains. Aviation’s share could rise to between 10% and 25% by 2050, a Roland Berger study found. Unlike carmakers, the airlines lack viable technological alternatives. Biofuels have potential but fully electric large commercial aircraft are probably decades awayEngine manufacturers are working on still more efficient jet engine designs. Rolls-Royce claims its Ultrafan technology will deliver a 25% improvement in fuel burn compared to the first generation of Trents. Bringing these innovations to market quickly is essential from a planetary perspective but rushing development could prove counterproductive. “My sense is that public opinion in Europe at least is moving quicker than the technology,” says Rob Stallard at Vertical Research Partners.Cunningham is even less optimistic. “Gas turbines are running out of road at just the point where the political impetus is toward greater decarbonization,” he says. “Jet engines are unlikely to get a lot better from here.”(1) The plane was developed by Bombardier Inc and was known as the C-Series before Airbus acquired a majority stake.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investing.com -- Here is a roundup of regulatory news releases from the London Stock Exchanges on Thursday, 7th November. Please refresh for updates.
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Virgin Atlantic continues to struggle with reliability issues on Boeing 787 aircraft but expects to have its major troubles with Rolls-Royce engines resolved by year-end, the airline's CEO said in an interview in London. Virgin Atlantic CEO Shai Weiss was more diplomatic in comments about Rolls-Royce than Emirates President Tim Clark, who earlier in the […]
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Indian federal police have opened an investigation into Rolls-Royce Holdings Plc , alleging the UK-based engine maker and its Indian arm improperly used a third-party to conduct business with three Indian state-owned companies. In a report published on Tuesday, India's Central Bureau of Investigation (CBI) also said officials from the Indian companies - Hindustan Aeronautics Limited (HAL), ONGC and GAIL - may have been involved in improper procurement from Rolls-Royce. Rolls-Royce provided engine spare parts to HAL for servicing gas turbines used by GAIL and ONGC, both of which are involved in the oil and gas sector, the report said.
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Turkish aerospace manufacturer Kale Group said on Monday if disagreements between Ankara and Washington curb parts orders and exclude it from an F-35 project, then any lost sales would be offset by turning to civil aviation. Turkish President Tayyip Erdogan has not backed down from the planned purchase of a Russian S-400 missile defense system that the United States has said would compromise the security of stealth F-35 fighter jets, which Turkey also plans to buy. NATO ally Turkey has said it will take delivery of the S-400s in July, even while sources told Reuters earlier this month that Washington had halted delivery of F-35-related equipment to the country, marking the first concrete U.S. step to block its delivery.
A shipyard in Barrow-in-Furness, northwest England, that builds Britain's new generation of nuclear submarines reopened on Wednesday after being briefly evacuated due to an incident, defense company BAE Systems said. "Following an extensive sweep of the Devonshire Dock Complex (DDC), including the four Astute class submarines in build, nothing suspicious was found," the company said in a statement. It did not specify the nature of the incident but an unidentified source told The Mail, a publication based in Barrow-in-Furness, that the evacuation followed a warning about a bomb on one of the Astute-class submarines.
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According to Rolls-Royce, by late February 35 787s had been grounded globally due to engine blades corroding or cracking prematurely. "This blade deterioration is a known issue but it is occurring faster than we expected on some engines," Chris Cholerton, Rolls-Royce President for Civil Aerospace, said on Wednesday. The accelerated inspection regime will allow Rolls-Royce to confirm the health of the more than 180 engines in service over the next few months.
Dunelm Group Plc rose more than 3 percent as the homewares retailer said it expected to top analysts forecasts for full-year profit after surging online demand helped it ride out a tough British retail environment in the latest quarterly report. Shares of ASOS climbed after the British online fashion retailer stuck to its full year guidance for sales, profit margins and capital expenditure despite a plunge in first-half pretax profit.
Bank stocks helped European shares shrug off early weakness on Tuesday, but gains were kept in check by a drop in shares of Airbus and its suppliers after the United States ratcheted up a trade dispute with the European Union over aircraft subsidies. A rise in bank shares following two days of losses helped the pan-region STOXX 600 index up 0.4 percent in thin trade. Investors are keeping a close eye on a trade summit between the European Union and China on Tuesday in which the bloc will try to coax Beijing to open up its markets.
BRUSSELS/PARIS, April 9 (Reuters) - The European Union has begun preparations to retaliate over Boeing subsidies, an EU official said on Tuesday, a day after Washington listed EU products it plans to hit with tariffs in their aircraft dispute. The U.S. Trade Representative https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/april/ustr-proposes-products-tariff on Monday proposed a range of EU products ranging from large commercial aircraft and parts to dairy products and wine to target as retaliation for subsidies given to Airbus. A European Commission source said on Tuesday the level of proposed U.S. countermeasures was "greatly exaggerated," adding the amount of retaliation could only be determined by a World Trade Organization arbitrator.
Britain's FTSE 100 lost ground as the U.S. and European Union exchanged tariff threats, the IMF cut global growth forecasts and oil majors slipped after Russia signaled an output boost, while investors awaited fresh Brexit updates. The FTSE 250 slid by the same amount.
London's main share index lost ground on Tuesday as Rolls Royce weakened after the U.S. proposed a list of EU goods for retaliatory tariffs, while investors awaited updates on a postponement of Britain's exit from the EU. The FTSE 100 was down 0.2 percent with losses across the board and the FTSE 250 was down 0.1 percent at 0725 GMT. Rolls Royce gave up 1.1 percent after the U.S. Trade Representative Robert Lighthizer announced a proposal to impose tariffs on a list of European Union products as retaliation for EU aircraft building subsidies.
Shares of UK-listed exporters rose on Tuesday, lifting the FTSE index, as sterling weakened after parliament failed to find majority support for an alternative path to Theresa May's Brexit withdrawal deal. The more domestically focussed FTSE 250 gave up gains and was virtually flat as weakness in the local currency weighed. The FTSE 250 had opened higher, in a rare break from moving in tandem with sterling and another sign that Brexit uncertainty is upending conventional trading strategies.
European shares hit their highest in half a year on Tuesday, buoyed by autos and insurance stocks and gains among export-heavy London stocks as Brexit uncertainty weakened the pound. "The FTSE has been the big outperformer today, as fears over a no-deal Brexit drag the pound lower," Joshua Mahony, Senior Market Analyst at IG, wrote in a note.
Singapore Airlines Ltd said on Tuesday it had grounded two Boeing Co 787-10 jets fitted with Rolls-Royce Holdings PLC Trent 1000 TEN engines after checks of its fleet found premature blade deterioration. The jets have been removed from service pending engine replacement, the airline said in a statement. The Trent 1000 TEN is the latest version of an engine that has had a problematic entry into service.
The pinnacle of high society is the Rolls-Royce. Only the richest TV and movie characters roll up in a Rolls. When they hop out of the back, you know that they're the heirs to a diamond mine or a diabolical supervillain with a huge bank account. So it's not surprising that the back of the first SUV from the automaker exudes an aura of exclusivity that transcends automobile segments. But they let me drive it all the same.