AIR - Air NZ.

[Baa_Baa]

The knowledge of the respective deterioration on the relevant engine parts must still be developing otherwise the full checks conducted in December would have established the current engine issues and changed the maintenance program then. Just four months ago. I'm going to avoid these planes... if it means travelling with someone else so be it.


https://www.stuff.co.nz/business/ind...afety-concerns

It does raise some profound questions doesn't it, the more it's looked at, the worse it seems to get. Seems to be evolving into differing circumstantial interpretations:

- As a passenger, probably would rather just not fly on a plane that has any doubt around it's engines. Choice is a fine thing, AIR needs to provide the alternatives or competitors will.

- As an airline, play it down "it's all ok", schedule alternate aircraft and modify flights to accomodate restrictions - for those who will still fly on the Dreamliner. Trust them?

- As an investor, asking 'is this a biggie'? Not sure really, the market seems to be either slow to take on the implications or just not too concerned (so far), as it hasn't seemed too concerned since the situation began.

Doesn't quite fit with a volatile share, maybe investors are the possums in the headlights?

[dobby41]

At what point do they ask for their engine money back and go buy some decent ones?

[Beagle]

Raz- I don't blame you for not wanting to fly on one, I wouldn't either and I am pretty sure anyone cognisant of all the facts with these engines when presented with another airline of a similar standard on the same route would choose the alternative airline and who could blame them ?
CAA have obviously followed FAA requirements regarding ETOPS restrictions and the weight restrictions and having to make dog leg refueling stops shows what an unmitigated fiasco this really is.

Behind the paywall article on NBR yesterday suggested that RR sells most of its engines on a so called "total care" package basis such that they wear any unscheduled maintenance and cover direct costs incurred as part of any unscheduled downtime but I would suggest we are WAY past that covering the loss of reputation and lost business as people simply make safer choices around their travel. I'd be very surprised if there's any provision within that so called total care contract to cover the collateral damage to reputation and loss of confidence causing loss of business but I wouldn't completely rule out pressure being applied in that sense...certainly plenty of work for AIR's in-house legal counsel coming up I would think.

AIR must be ruing their decision to run with the so called Rolls Royce engine solution for these aircraft which has proved so far to be anything but a "Rolls Royce" solution. I think this issue dog's them well into 2019 as all the other engines need overhaul. Only time will tell if there are any other systemic weaknesses within those engines but they are made in the U.K. and contain 30,000 individual parts...you folks join the dots.

One wonders if they can retrofit the alternative engines and jettison these highly problematic engines once and for all ?
The potential for broker analysts to take a more negative view on AIR should be abundantly clear.
How does one forecast profit for FY19 with this ongoing fiasco causing loss of business and significantly more inefficient use of remaining 787's in service and Brent oil now at $75 ?

Is NZE one of the two grounded 787's or are there 3 grounded planes now Benny1 ?

[Benny1]

Yep NZE is one of the grounded aircraft. That hasn't flown since early December, has been repaired completely, but now needs engines, I think the engines that were to be fitted have been used to keep other aircraft flying.
One aircraft will return to service today or tomorrow so that will leave two grounded .
Sorry not seen any timeline as of yet for when these aircraft are expected back in the air.
As they are bringing in replacement aircraft it looks like this will be on going for a while yet.

[winner69]

Yep NZE is one of the grounded aircraft. That hasn't flown since early December, has been repaired completely, but now needs engines, I think the engines that were to be fitted have been used to keep other aircraft flying.
One aircraft will return to service today or tomorrow so that will leave two grounded .
Sorry not seen any timeline as of yet for when these aircraft are expected back in the air.
As they are bringing in replacement aircraft it looks like this will be on going for a while yet.

How long did it take to fix ZQ-NZL air problem the other day.

It seems to be dog legging its way around the world ...Papeete, Darwin and Guam etc

[Benny1]

Not sure about NZL don't think it would have been too much of a major.

[Beagle]

At what point do they ask for their engine money back and go buy some decent ones?

This interesting snippet from Wikipedia

The two different engine models compatible with the 787 use a standard electrical interface to allow an aircraft to be fitted with either Rolls-Royce Trent 1000 or General Electric GEnx engines. This interchangeability aims to save time and cost when changing engine types;[6] while previous aircraft could exchange engines for those of a different manufacturer, the high cost and time required made it rare.[225][226] In 2006, Boeing addressed reports of an extended change period by stating that the 787 engine swap was intended to take 24 hours.[22

Not impossible...sometimes you are better to cut your losses and move on...

Behind the paywall article on NBR suggested the RR engines cost $14m each, (they didn't say if that was $US or $NZ)

About $250m then for 18 new engines...but I seriously doubt G.E. have 18 new engines just sitting on the shelf ready for sale and sadly therein lies the problem.

[Beagle]

http://www.scoop.co.nz/stories/BU180...-agreement.htm

I am sure Shane Jones will be happy so shareholders should be ecstatic too, right ?

[Beagle]

Might explain why the SP hasn't tanked.
https://www.msn.com/en-nz/travel/new...cid=spartandhp
Last paragraph is especially interesting.

The cost is piling up for Rolls-Royce. Air New Zealand purchased the engines with total warranty cover meaning the cost of any disruption or replacement aircraft has to be covered by the engine manufacturer rather than the airline itself.

Emphasis added.
No doubt the total cost of the disruption will keep the bean counters very busy doing the sums.

[Baa_Baa]

Doesn't look too bad for Rolls Royce at this stage, although the death cross has happened and simple MACD looking a bit sick.
Attachment 9646
Monthly chart with 50MA and 200MA approximations.