The largest decline on the FTSE 100 was in Rolls-Royce shares, which belong to the significant British engineering corporation. This occurred when Cathay Pacific Airways discovered a malfunctioning engine component on one of its planes and started inspecting its whole Airbus A350 fleet simultaneously.
The airline based in Hong Kong has announced that a number of planes will be out of service for several days. As of right now, the airline has cancelled 24 return flights while it is performing the “precautionary” checks. In the end, Rolls-Royce’s stock price was down by 6%.
It was determined that the A350 aircraft that was forced to return to Hong Kong on Monday during a flight to Zurich had a component failure in its engine. Cathay stated that this failure was identified. It did not provide any other information regarding the component, but it did state that it was the first component of its kind to experience such a failure on any A350 aircraft anywhere in the world.
“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,” the airline stated in a statement before the announcement. We did not waste any time in bringing this matter to the notice of our regulators, as well as manufacturing companies that produce aeroplanes and engines.
In addition, as a preventative step, we proactively started an inspection of all 48 of our A350 aircraft across the whole fleet. The procedure for conducting this comprehensive inspection is already under way and will be finished today. Up to this point, we have determined that a number of the same engine components are in need of replacement; we have obtained spare parts, and we are currently in the process of repairing the engine.
The director of engineering at Cathay Pacific, Keith Brown, issued the following statement: “Every aircraft is currently undergoing a thorough inspection.” Upon completion, the aircraft that has been given the go-ahead to operate will be sent back into service, while the aircraft that have been identified as having technical concerns will be subjected to additional maintenance and repair work. During this time, we are maintaining communication with the Hong Kong civil aviation authorities as well as the manufacturers of aircraft and engines. Our heartfelt apologies are extended to our clients for the inconvenience that has been caused, and we are grateful for their patience and understanding.
Reuters requested a statement from Rolls-Royce, which stated that it was aware of the situation and that it was working with Cathay, Airbus, and the relevant authorities. Rolls-Royce acknowledged that it was aware of the incident.
Tufan Erginbilgiç, who has been the chief executive officer of the company since the beginning of 2023, has been responsible for the amazing turnaround that its shares have experienced since the beginning of the previous year. The shares have more than quadrupled under his leadership.
The company not only manufactures and maintains engines for aircraft like the Airbus A350, but it also provides after-sales repair and maintenance for the engines while the aircraft are in flight. Over the course of the past few months, the engineering group has been successful in securing significant contracts for its Trent engines, one of which is with Cathay Pacific.