Qantas Airways’ fleet of Airbus A380 aeroplanes will remain grounded indefinitely after new problems with the engines were uncovered over the weekend, the Australian airline’s CEO said Monday.
All of the company’s A380s were grounded this past Thursday after one of the four Rolls-Royce engines aboard a plane failed mid-flight, forcing an emergency landing. No one on board was hurt.
According to a CNN report, “Qantas CEO Alan Joyce said Friday that he hoped to have the fleet up in the air within 48 hours after completing engine safety checks, but backed away from that statement Monday, telling Australian Broadcasting Corp., “We did find some issues that we are investigating further.”
“Hopefully over the next day or so we will have an understanding of when the aircraft can get back in the air,” he added. “Our top priority is making sure that we have the continued safe operation of the aircraft and if this takes a bit longer, it will take longer.”
Rolls-Royce said in a statement last week that it has been working closely with Qantas and air safety authorities “to collect and understand information relating to the event and to determine suitable actions.”
The news is certainly not welcomed at Airbus-rival Boeing, because aeroplane safety is an industry-wide priority. It’s likely, however, that Boeing management will take solace in being the less-scrutinized aeroplane manufacturer for once.
Indeed, the company has been entrenched in design, supply chain, and manufacturing problems with its highly-anticipated 787 Dreamliner for years. The Dreamliner is expected to consume 20 per cent less fuel than comparable planes, but has pushed the original delivery date from May 2008 to sometime in 2011.
Still, the delays haven’t killed Boeing’s earnings or stock price. Last month the company reported third-quarter profit of $837 million, or $1.12 per share, compared with a loss of $1.56 billion, or $2.23 a share, a year ago. Further, shares of Boeing have recently rallied from the low $60s to $70.
Finally, Boeing has entered the final stages of flight tests for the 787-8, Chief Executive Jim McNerney said on a conference call with reporters and analysts. Management reaffirmed its plan to make delivery of the first planes in the first quarter of 2011.
Could Boeing shares make a run higher because of brightening economic prospects and the problems Airbus must now deal with? Realistically, chances are good. Management has taken some hard lessons from its Dreamliner manufacturing fiasco, but could leverage them on future projects. The commercial aeroplane market continues to recover, and the Middle East and Asia in particular have the ability to pull aircraft companies out of the dark. If Airbus is perceived to have some sort of safety issue with existing planes, then preference clearly transfers to Boeing.
Further, if Boeing stock can break resistance at $75, then shares could run higher until the next level of significant resistance, at $85.
While the defence division of Boeing’s enormous business is still experiencing weakness, the commercial plane division could carry the company back to its former greatness in the next few years. Be sure to keep an eye on Boeing as it begins to deliver the first Dreamliners.
Nick Smith is a writer for Benzinga.
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