ANA Holdings to ask Rolls-Royce for 787 engine compensation

Bloomberg

ANA Holdings Inc. plans to claim compensation from engine-maker Rolls-Royce Holdings Plc following its cancellation of more than a dozen flights last month after finding broken turbines on three 787 aircraft, according to two people familiar with the plan. The form of compensation hasn’t been decided yet but it may be for discounts on future purchases or free parts, rather than in cash, one of the people said, asking not to be identified before a final decision is made. The airline cancelled 18 flights last month, with costs for the first nine cancellations estimated to be 55 million yen ($532,000), the company said at the time. The people didn’t disclose the value of their claims.
ANA, the world’s biggest operator of 787 planes, is changing the turbine blades on all the Rolls-Royce engines in its fleet of 50 Dreamliner planes after parts broke off on two international flights and one domestic flight. The issue is ANA’s biggest with the model since a 2013 global grounding of the entire Dreamliner fleet, which led the carrier to cancel flights for more than four months.
The Tokyo-based airline canceled flights last month after discovering cracking in the medium-pressure turbines of Trent 1,000 engines. Rolls-Royce and Boeing Co. have both said they are working with the Japanese carrier to lessen the impact.

Limiting Cancelations
ANA will ask Rolls-Royce for compensation for the canceled flights, fuel and labour costs involved in flying larger than needed planes on routes to avoid cutting flights, and parts and labour for replacing blades on the engines, said one of the people. It will take until the end of 2019 to replace the blades on all aircraft with improved versions that Rolls-Royce will start supplying next year, the company said last month.
The carrier also aims to keep cancellations for the second half of this month near zero, in line with the first half, after initially forecasting about 10 a day, three people familiar with the matter said.
The carrier aims to use spare and training aircraft such as twin-aisle Boeing Co. 777 to help keep cancellations near zero as it did in the first half of September, said the people, asking not to be identified because the issue hasn’t been made public. The carrier may also use two 787s that it is due to receive this month, two people said.
Maho Ito, a spokeswoman at ANA, said nothing has been decided on compensation. “We will announce the plan as soon as possible for the convenience of our passengers, once we have confirmed the safety of operations,” she said when asked about the flight schedule. Shares of the airline rose 0.3 percent to 285.2 yen as of the close of Tokyo trading on Monday. They are down 19 percent this year, compared with a 10 percent drop in the Nikkei 225 Stock Average.