Qantas threatens to sue Rolls Royce over faulty engines

Christopher Werth Dec 2, 2010
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Qantas threatens to sue Rolls Royce over faulty engines

Christopher Werth Dec 2, 2010
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STEVE CHIOTAKIS: Today, the Australian airline Qantas threatened to sue jet engine maker Rolls Royce. The legal moves stem from a scary incident last month. An engine on a Qantas flight from Singapore to Sydney blew out in midair, forcing the plane into an emergency landing.

From London, Christopher Werth reports on how the legal concerns could hurt more than just Rolls Royce.


CHRISTOPHER WERTH: The problems could spread throughout industry. Jason Adams is an analyst with the investment bank, Nomura. He says Airbus may have to rethink plans for its new fuel-efficient, mid-size plane, the A350, which will rely on Rolls Royce engines. It also could spell trouble for the A380, the same super jumbo jet that suffered the blowout.

JASON ADAMS: The real Airbus concern is that half of their A380s scheduled for 2011 have Rolls Royce engines.

And it could be problematic for Airbus’ American rival, Boeing. 40 percent of its new 787 Dreamliners are expected to use Rolls Royce engines. It should be noted, the engine maker Rolls Royce does not make the cars of the same name. Qantas is in negotiations with Rolls Royce to reach a settlement.

Adams says the engine maker is expected to compensate the airline for having to ground its planes. But Qantas says its taking all these early legal steps in case its unhappy with the Rolls Royce offer.

In London, I’m Christopher Werth for Marketplace.

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