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Rolls-Royce Recovers After Cathay Pacific’s Limited Flight Cancellations

Rolls-Royce Recovers After Cathay Pacific’s Limited Flight Cancellations

Rolls-Royce saw a rise in its share price on Tuesday after Cathay Pacific reported that the engine issues affecting its Airbus A350 aircraft were limited. The British manufacturer’s Trent XWB-97 engines, used in 15 of Cathay Pacific’s planes, were identified as having a component failure. Despite this setback, Cathay Pacific expects to resolve the issue by September 7.

 

The problem caused the cancellation of nearly 40 flights, primarily on Asian routes. However, long-haul operations are expected to remain unaffected, and affected customers will be offered alternatives. Cathay Pacific has successfully repaired three aircraft, with the remainder anticipated to be operational soon.

Rolls-Royce shares rose by 2.5% by 2 p.m. London time, recovering from a 6.5% drop the previous day. The company is working closely with Cathay Pacific and relevant authorities to address the situation. Analysts from Morgan Stanley suggested that the fix appears to be minor, unlikely to impact the engine’s overall design.

 

This incident follows previous challenges Rolls-Royce faced with its Trent 1000 engines, which led to substantial financial costs. Despite these concerns, Deutsche Bank maintains a positive outlook on Rolls-Royce’s financial liabilities, suggesting they are contained.

Rolls-Royce’s stock has experienced volatility in recent years, notably due to pandemic-related disruptions. However, a major restructuring in 2023 has significantly boosted the company’s profits, contributing to a more than 220% rise in its stock last year.

As the situation develops, Rolls-Royce remains committed to keeping airlines informed and resolving the current issues swiftly.



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