Rolls Falls Most in a Year After Engine Failure Grounds A380s

Rolls-Royce Group Plc (RR/), the world’s second-largest maker of aircraft engines, fell the most in more than a year in London after one of its Trent 900 engines blew up, grounding Qantas Airways Ltd. (QAN)’s entire Airbus A380 fleet.

Rolls-Royce fell as much as 36 pence, or 5.5 percent, to 618.5 pence in London, its sharpest decline since April 2009, and traded at 628 pence as of 1:12 p.m. local time. The drop cut the shares’ advance to 30 percent so far this year.

Airbus SAS, which makes the A380, and Rolls-Royce began investigating why the engine exploded in mid flight, forcing an emergency landing in the worst incident since the aircraft began service in 2007. The Trent 900 engine is the more common option for the A380 and has been selected by nine out of 14 operators who have ordered the passenger jet, according to Rolls-Royce.

“The proper context is that this engine is just one of a family of engines, and as a family they’ve been incredibly reliable,” said Sandy Morris, an analyst at Royal Bank of Scotland in London. “That’s what makes this even more remarkable.”

In August, London-based Rolls-Royce closed a test site after damage caused by the uncontained failure of a Trent 1000 engine, which powers Boeing’s 787 Dreamliner model, forcing an additional delay to the introduction to Boeing’s latest jet.

“Until we know exact nature of failure, though it’s tempting to draw systemic conclusions from it, especially after the problems with the 787 engine, it’s too early and the sample is too small to be really conclusive,” said Nick Cunningham, an analyst at Agency Partners LLP.

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net. Andrea Rothman in Toulouse at aerothman@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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