|
 Qantas CEO Alan Joyce said the terms of the agreement are
confidential, but that the settlement's profit and loss impact would
amount to a 95 million Australian dollar ($100 million) boost to the
airline's bottom line.
Joyce said the settlement marks an end to the legal proceedings
Qantas launched against Rolls-Royce in the Federal Court of
Australia in December.
In November, a Rolls-Royce Trent 900 engine on a Qantas A380
disintegrated shortly after takeoff from Singapore, forcing the
plane to make an emergency landing.
The engine explosion was the most significant safety issue an A380
had ever faced since it began passenger flights in 2007, and
prompted intense scrutiny of Rolls-Royce engines. The jet landed
safely, but the incident forced the temporary grounding of 20 A380s
with Trent 900 engines, operated by Qantas, Singapore Airlines and
Germany's Lufthansa.
The Australian Transport Safety Bureau's interim report on the
incident said a manufacturing defect in an oil pipe deep within one
of the engines led to an oil leak, which sparked a fire. The fire
caused a disintegration of one of the engine's giant turbine discs,
sending pieces of it shooting through the plane's wing.
The fallout from the engine emergency cost Rolls-Royce 56 million
pounds ($91 million) in the 2010 financial year, a spokesman for the
London-based company said in a statement. Rolls-Royce said it
expects "some small additional costs" in the 2011 financial year.
"Qantas is a valued customer and we are pleased this matter has been
resolved," the statement said.
The settlement will help Qantas recover from the millions it lost
following the incident. The airline was forced to temporarily ground
its entire fleet of A380s for a series of inspections, and Joyce
said the plane damaged by the explosion won't return to service
until February.
[to top of second column] |
 "Qantas and Rolls-Royce have had a long and successful commercial
partnership spanning several decades," the airline said in a
statement. "Qantas looks forward to a continued strong relationship
with Rolls-Royce on the basis of the settlement announced today."
The compensation payment helped boost the airline's expected
underlying pretax profit for the year to June 30 to between AU$500
million and AU$550 million, up from AU$377 million a year ago.
Despite the positive profit forecast released Wednesday, the airline
has come under intense financial pressure from a series of natural
disasters. The disasters, including a massive earthquake in New
Zealand earlier this year, cost the airline AU$185 million, Qantas
said.
Meanwhile, a massive ash cloud from an erupting Chilean volcano has
forced the cancellation of scores of Qantas flights this month. As
of Monday, the disruptions have cost the airline AU$21 million,
Qantas said.
Qantas shares rose 0.8 percent to AU$1.84 in afternoon trading.
[Associated
Press; By KRISTEN GELINEAU]
Copyright 2011 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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