Rolls-Royce hit by further setback to fixing Boeing 787 engines

As of late February, Rolls-Royce said 35 Boeing 787s were grounded globally due to engine blades corroding or cracking prematurely. (AFP)
Updated 20 September 2019

Rolls-Royce hit by further setback to fixing Boeing 787 engines

  • The company faces £1.6 billion ($2 billion) in extra costs and disruption as a result of the engine problem
  • As of late February, Rolls said 35 787s were grounded globally due to engine blades corroding or cracking prematurely

Rolls-Royce will take longer than expected to fix problems with its Trent 1000 engine, frustrating efforts to get Boeing 787s grounded by the glitch flying again and knocking the British company’s shares.
Rolls-Royce, whose engines power large civil and military planes, said on Friday it had sped up turbine blade replacement for some models, leading to additional removals and delaying a reduction in the number of grounded aircraft to single figures until the second quarter of 2020.
The company faces £1.6 billion ($2 billion) in extra costs and disruption as a result of the engine problem, which is due to the poor durability of components, and the latest delay spells further frustration for its customers and investors.
Rolls-Royce, whose customers include more than 400 airlines, 160 armed forces and 70 navies, said in August that it would spend another £100 million to fix the issue.
“We perceived a risk that further action would be required, potentially leading to higher costs being incurred ... today’s announcement that guidance for the Trent 1000 cash costs in 2019 and 2020 remains unchanged comes as a relief,” Jefferies analysts, who rate the stock as “buy,” said.
Rolls-Royce CEO Warren East said in August that a target of fewer than 10 aircraft on the ground at the end of the year might take a bit longer to achieve as a result of an additional repair load resulting from faster deterioration of a blade on the Trent 1000 TEN.
The Trent 1000 TEN is the latest version of an engine that has had a problematic entry into service. As of late February, Rolls said 35 787s were grounded globally due to engine blades corroding or cracking prematurely.
“We deeply regret the additional disruption that this will cause our customers and we continue to work closely with them to minimize the impact on their operations,” Rolls-Royce said.
Airlines have faced disruptions because of the groundings, with Norwegian Air’s strategy switch to prioritize profits over growth hampered by the global grounding of Boeing’s 737 MAX aircraft and long-running problems with Rolls-Royce’s engines on Boeing Dreamliners.
Singapore Airlines has also grounded two 787-10 jets fitted with the Trent 1000 TEN engines.
Rolls-Royce is keen to avoid further problems with the engine and in March dropped out of the race to power Boeing’s planned mid-market aircraft.


Technology will not replace labor despite rapid digital transformation

Updated 28 January 2020

Technology will not replace labor despite rapid digital transformation

  • Hayman said he believes technology should help people and offer them support rather than replace them
  • The UAE is among the top performers in the Middle East in terms of digital transformation in industrial sectors

ABU DHABI: Digital technology will not replace labor; the aim of it is to improve areas of inefficiency in different industrial sectors, CEO of AVEVA Group plc Craig Hayman told Arab News.

Most sectors around the world from retail to financial services and telecommunication, have been digitized in some way, according to Hayman.

But while this widespread introduction of digital technology inevitably reduces costs and increases efficiencies in the workplace, it is also seen by many as the death knell for their jobs.

A 2019 report by the Organization for Economic Co-operation and Development (OECD) estimates that approximately 14 percent of workers globally will face a high risk of their jobs one day becoming automated and “32 percent face major changes in the tasks required in their job and, consequently, the skills they would need to do their job.”

Another 2017 McKinzy&Company report said up to 800 million workers around the world could be replaced by robots by 2030.

But Hayman said he believes technology should help people and offer them support rather than replace them.

“In the industries AVEVA serves, there are so many areas of inefficiency that we are delivering improvement for without any replacement of labor. It is more about giving the people more tools to effectively do their jobs,” he added.

For example, Hayman said, a worker who is doing maintenance repair is given the tools to know more about the correct isolation procedures around this repair.

OECD’s 2019 report said the effect of digitization on labor will not be evenly distributed nor happen at a steady pace. “It is most likely to be concentrated in certain jobs, selected sectors and particular geographical areas, and may move in fits and starts,” the report adds.

While digital technology around the world began to witness a transformation in the last decade across different industrial sectors, the Middle East has become a major contributor to this transformation.

The UAE is among the top performers in the Middle East in terms of digital transformation in industrial sectors, Hayman said.

A 2016 report by McKinzy&Company also said the UAE ranks the top in adopting digital technology and it matches the world’s digital leaders on several metrics.

Hayman said he believes there is a strong digital ambition in the region. “I think some of the digital projects in the Middle East are starting to yield good results. We have seen this with customers like Al-Marai and Abu Dhabi National Oil Company (ADNOC).”

In the UAE’s oil and gas sector for example, there is ADNOC’s Panorama Digital Command Centre which is a real-time data visualisation centre that offers insights and identifies new ways to improve performance. “The Panorama Digital Command Centre is known around the world; that was an eight-week project for us almost two years ago,” Hayman said.

Abu Dhabi's Crown Prince Sheikh Mohamed bin Zayed Al Nahyan inaugurated ADNOC's advanced Panorama Command Centre and Artificial Intelligence (AI) platform on Nov 12, 2017. (WAM)

Saudi Arabia’s Aramco has also established tech projects such as “the use of robots and self-guided autonomous devices in remote inspection and maintenance in plant areas, and the installation of smart sensors with advanced analytic capabilities,” according to a 2018 report by Aramco.

When asked how much companies spend to digitize their services in the oil and gas sector, Hayman said about $250 billion a year was spent in capital expenditure in the oil and gas sector.

Saudi Arabia has adopted a digital transformation strategy that began in 2019 and is expected to conclude in 2022. The strategy’s “main components are digital health, digital education, e-commerce, and smart cities,” a 2019 report by the Saudi National Platform said.

On health, the Kingdom launched a telemedicine technology in which in 2019 it saved a million lives out of which 10,000 were critical, the Kingdom’s Minister of Communication and Information Technology Abdullah bin Amer Al-Swaha said in a panel discussion held in Davos at this year’s World Economic Forum.

Telemedicine is a technology that provides electronic clinical services to patients without an in-person visit.

In the digital education sector, Saudi Arabia established the Saudi Digital Library (SDL), which is said to be the largest collection of academic information resources in the Arab world, according to the Kingdom’s Ministry of Education. “SDL includes over 310,000 scientific references covering the different academic disciplines. The content of the library is continuously updated, providing huge resources of knowledge in the long run.”

When asked about the opportunities and challenges the digital trend creates for entrepreneurs, Hayman said if an entrepreneur can deliver technology in the context of trust and partnership, he or she is definitely moving on the right track.

A 2019 report by the World Economic Forum said digital technology can help the government and private sectors to create initiatives that form “a holistic global entrepreneurial ecosystem that enables sharing, learning and access to resources at a mass scale and at low cost.”