Rolls-Royce was hit by a catalogue of engine problems on Thursday including an £186 million blow from Airbus ditching the A380 which helped push it into the red.

Rolls-Royce was hit by a catalogue of engine problems on Thursday including an £186 million blow from Airbus ditching the A380 which helped push it into the red.  

The FTSE-100 engineering colossus, led by Warren East, said Airbus’ shock decision to end production early would force a major write-off of costs associated with manufacturing the Trent 900 engines which power the planes.

Airbus stunned the aviation world earlier this month when it axed the A380 jumbo programme after only 12 years following a decision by its largest customer Emirates to scale back orders in favour of smaller planes.

Rolls-Royce still has to supply 17 new A380s with Trent 900 engines over the next three years but the end of the programme will cost the business £186 million as it winds down production lines earlier than expected.

Rolls was a major beneficiary of government funds during the development of the A380, receiving about £200 million in repayable launch investment. 

Taxpayers were due to be repaid from royalties on A380 sales but the early end is likely to leave taxpayers with a loss. The Government has recouped about three-quarters of Rolls’ £200 million investment.

The blow to the balance sheet was one of several headaches for the firm: higher-than-expected costs associated with repairing Trent 1000 engines — which grounded jets around the world because of faulty rotor blades — also helped to drive Rolls to a £2.9 billion loss for 2018. Shares fell 4% to 947.8p. 

In June, Rolls unveiled plans to slash 4600 jobs by the middle of next year. Already 1300 white-collar jobs have gone and the restructuring has cost the company £320 million.

Rolls also today withdrew from the bidding for Boeing’s mid-sized plane after admitting new engine technology, known as Ultrafan, would not be ready in time to meet Boeing’s plan.

East said the firm had tried “very hard” to make the Ultrafan programme meet Boeing’s timescales but “we couldn’t make it work”. He said it was a bad idea to pull the programme forward by one to two years “just so we can tick a box on a proposal”. 

“Rather than convince everyone we could make it work and screw up the launch, the best thing to do is to be transparent with Boeing and take a brave decision to focus the resources on underlying architecture development and not try and mess it up by trying to pull forward,” he said.

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