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British Rolls-Royce prepared to cut thousands of jobs

12 June 2018

A view of two Rolls Royce Trent 1000 engines of the Boeing 787 Dreamliner during a media tour of the aircraft ahead of the Singapore Airshow in Singapore on February 12, 2012.

Rolls-Royce is extending the inspections of its Trent 1000 engines after durability problems were found on a different series of the Boeing 787 engine. The company's Civil Aerospace segment provides aero engines for large commercial aircraft, regional jet, and business aviation markets, as well as aftermarket services.

"We have therefore agreed with Boeing and the relevant regulatory authorities to carry out a one-off inspection of our Trent 1000 Package B fleet, to further inform our understanding", the company added.

In a statement Rolls said it anticipated that the inspections would have a limited impact on customer operations, and that engines will be inspected on-wing using existing techniques.

While Rolls-Royce expects to "incur some additional costs", it does not expect an impact on its full-year guidance for free cash flow. The reiteration takes into account increased servicing of Package C engines, where the glitch was originally detected, as well as mitigating actions being taken across the group, the company said.

But it has warned the figure may rise as it compensates airlines for grounding and replacing airplanes.

Shares of Rolls-Royce Holdings plc (LON:RR) have received an average rating of "Hold" from the eleven ratings firms that are presently covering the company, MarketBeat Ratings reports.

A spokesperson for the company said: "In January, we announced a simplification of our business and began work on a restructuring of our support and management functions".

The firm added that it was moving to a "considerably simplified staff structure, with fewer layers and greater spans of control across the group".

The engine maker is due to unveil a new restructuring plan authored by turnaround consultant Alvarez & Marsal at a capital markets day this week.

Following an agreement with the United States manufacturer and regulators, some 166 engines that are potentially affected will undergo a one-time inspection to assess the extent of the problem, Rolls said.

British Rolls-Royce prepared to cut thousands of jobs