Global Airport News

Qantas Airways is claiming damages from engine maker Rolls-Royce over faulty Airbus A380 engines and loss of business, as investigators concluded a design fault was the likely cause of a mid-air engine failure on an Airbus A380 last month.

Qantas, in a claim filed in the Federal Court of Australia, said Rolls-Royce was in breach of duty and may have misled the airline when it supplied engines that were defective and could not perform according the standards guaranteed by Airbus and Rolls-Royce.

Qantas did not quantify its loss but said it suffered damages due to the grounding of its fleet, expected delivery delays on further Airbus A380s and because it cannot use the A380 on routes between Australia and Los Angeles.

Analysts estimate damages to Qantas could reach AUD$60 million (USD$58.5 million), excluding the costs of repairing the damaged plane, while Qantas also faces costs related to reduced capacity over the southern hemisphere summer travel season and potential damage to its reputation.

A Rolls-Royce spokesman declined to comment on the claim but said: "Rolls-Royce will continue to work with the investigating authorities and the regulators to ensure compliance with safety standards."

The Australian Transport Safety Bureau concluded the incident likely arose because of a design fault which led to fatigue cracking and oil leakage causing an oil fire.

"It's possible that this is a one off. But the results of inspections will tell us if that is the case," Martin Dolan, the ATSB's Chief Commissioner said at a news conference on Friday.

STEPS ENOUGH FOR NOW

The ATSB added it was satisfied that Rolls-Royce's directives have adequately addressed immediate safety issues.

However, those directives limit how Qantas can use its planes, forcing much of its fleet to stay on the ground as it checks and replaces engines, and keeping planes off its longest and most lucrative routes.

"This will put the carriers who operate the aircraft with the same engines continuously in the spotlight, S&P analyst Shukor Yusov said.

"The problem right now is with Qantas and Rolls-Royce, but of course there will be scrutiny on Singapore Airlines and Lufthansa as well because they have similar aircraft with similar engines," Yusov added.

The three airlines operate a combined total of 21 aircraft, just over half of the 40 A380s already in service.

"Our priority at this stage is to manage this from an operational standpoint and ensure the continued safe operation of our A380s, with the least amount of disruption to our customers' travel plans," Singapore Airlines spokesman Nicholas Ionides said.

Qantas shares have lost over 6 percent since the incident while Rolls-Royce is down over 4 percent after recovering most of its earlier losses.

Qantas resumed flying the A380 on a limited basis on November 27 after a three-week grounding but has been forced to keep the aircraft off its routes to Los Angeles, one of its most profitable destinations.

Problems with the engine mean Qantas was unable to use maximum power on take-off from Los Angeles and therefore would have to limit the number of passengers onboard.

Qantas said on Thursday it continued to seek an out-of-court settlement and the court filing was made to keep all options open in case a settlement is not possible.