Rolls-Royce halts A380 engine production

Rolls-Royce has called a 12-month halt to engine production for the problem-hit Airbus A380 superjumbo as the European aircraft maker struggles to solve problems with the installation of 500km of wiring needed in each aircraft.

The British aircraft engine manufacturer delivered the news late on Thursday to workers at its UK plant in Derby in the east Midlands.

Rolls-Royce said it was too early to say whether lay-offs were needed.

"We are talking to Airbus about exact details of their future requirements. Once we have the engine programme requirements and are clear on any potential impact, we will consult with employee representatives."

The company said it expected no financial impact this year from the delay. It will produce 20-30 Trent 900 engines this year, half the number expected.

The shutdown due to the delay will create a small sales shortfall next year, although the impact on profits is expected to be negligible.

Rolls-Royce typically makes little money on the first engines for new aircraft models, preferring to build a large installed base to secure lucrative maintenance contracts.

Assembly of the Trent 900 is integrated with other Rolls-Royce engines, including the Trent 700 for the Airbus A330, the Trent 800 for the Boeing 777 and various industrial and marine turbines.

It has also developed an engine for Boeing's new 787 Dreamliner passenger jet.

Engines are expensive to develop so the delay will be disappointing to Rolls-Royce and its industrial partners on the Trent 900, which competes with an engine produced by General Electric and Pratt & Whitney.

But the Trent 900 accounts for just 1 per cent of Rolls-Royce's commercial aircraft business.

Under the revised A380 delivery plan presented by Airbus on Tuesday, the first A380 will not be delivered until October 2007 to Singapore Airlines.

Originally the first A380 was due to enter into commercial service with Singapore Airlines in March this year.

The subsequent build-up in production will be hugely delayed with only the one A380 to be delivered in the whole of 2007 - down from the 25 originally planned and the nine announced as recently as June.