Rolls-Royce share price dips as EASA orders airlines to replace some of group’s engines

Some components suspected of having corroded

Rolls-Royce share price dips as EASA orders airlines to replace some of group’s engines

Shares in Rolls-Royce Holdings (LON:RR) have slipped into the red as the European aviation safety regulator ordered airlines to replace some of the group’s Trent 1000 engines. The news comes after Air New Zealand recently cancelled and delayed some flights due to problems with the Trent 1000 engines.

As of 13:36 GMT, Rolls-Royce’s share price had lost 0.12 percent to 853.00p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.51 percent higher at 7,563.25 points. The group’s shares have added more than 26 percent to their value over the past year, as compared with an over six-percent rise in the Footsie.

Airlines ordered to replace some Trent 1000s

The European Aviation Safety Agency (EASA) issued an Emergency Airworthiness Directive today, ordering airlines to replace some Rolls-Royce Trent 1000 engines. The regulator explained that a new cyclic life limit must be applied to certain engines, which determines when an engine can no longer be installed on an aeroplane in combination with certain other engines. The engines in question are primarily installed on Boeing’s aircraft.

A Rolls-Royce spokesman told Reuters that the directive “mandates action we are taking as part of the continual development of our pro-active engine management programme”. The newswire notes that the company had previously disclosed in a conference call with investors that 400 to 500 Trent 1000 engines were affected by problems with components wearing out earlier than expected.

Analysts on British engine maker

The 17 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 818.00p on the shares, with a high estimate of 1,261.00p and a low estimate of 645.00p. As of December 20, the consensus forecast amongst 21 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.

As of 13:50 GMT, Thursday, 21 December, Rolls-Royce Holding PLC share price is 856.00p.

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