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On Wednesday, Hong Kong's flag carrier announced plans to cancel an additional 10 return flights due to a technical issue discovered on Monday with a component of the Rolls-Royce (LSE:RR) engine on one of its A350 aircraft. The airline had already grounded several flights in response to the problem.
Following the discovery, the airline conducted inspections across its entire fleet of 48 A350 jets and identified 15 aircraft needing engine component replacements. To date, three of these aircraft have been repaired, and the airline anticipates that all affected jets will be operational by Saturday.
Cathay Pacific stated that the faulty component was the first of its kind to experience failure on any A350 aircraft globally. However, the airline did not disclose specific details about the engine part involved. A Cathay A350-1000 bound for Zurich had to return to Hong Kong the previous day due to the issue.
Despite these disruptions, the airline assured that long-haul services are expected to remain unaffected. Analysts at Deutsche Bank noted that, while the situation raises some concerns, preliminary assessments suggest that any financial impact could be manageable. Consequently, their positive outlook on Rolls-Royce's equity remains unchanged.
The Airbus A350-900 aircraft uses the Trent XWB-84 engines manufactured by Rolls-Royce, while the A350-1000 is equipped with the Trent XWB-97 engines. At the Dubai Airshow in November 2023, Emirates President Tim Clark had criticized the Trent XWB-97, labeling it as "defective" due to high maintenance costs in harsh operating conditions, though this issue did not extend to the Trent XWB-84.
Following the announcement, Rolls-Royce shares experienced a decline of 6.5% in the previous trading session. As of 0800 BST, Cathay Pacific shares were trading 0.62% lower at 7.960 HKD.
Overall, while the technical issue has led to flight cancellations and some operational disruption, the airline and analysts remain cautiously optimistic about managing the situation and its financial implications.
