Photographer: Duncan Chard/Bloomberg

ANA Said to Plan to Ask Rolls-Royce for Engine Compensation

Updated on
  • Airline said to plan compensation claim for flight cuts
  • Company said to target near zero cancellations this month

ANA Holdings Inc. plans to claim compensation from engine-maker Rolls-Royce Holdings Plc following its cancellation of more than a dozen flights last month after finding broken turbines on three 787 aircraft, according to two people familiar with the plan.

The form of compensation may be discounts on future purchases or free parts, rather than cash, one of the people said, asking not to be identified before a final decision is made. The airline canceled 18 flights last month, with costs for the first nine cancellations estimated to be 55 million yen ($532,000), the company said at the time. The people didn’t disclose the value of the potential claims.

ANA, the world’s biggest operator of 787 planes, is changing the turbine blades on all the Rolls-Royce engines in its fleet of 50 Dreamliner planes after parts broke off on two international flights and one domestic flight. The issue is ANA’s biggest with the model since a 2013 global grounding of the entire Dreamliner fleet, which led the carrier to cancel flights for more than four months.

The Tokyo-based airline canceled flights last month after discovering cracking in the medium-pressure turbines of Trent 1000 engines. Rolls-Royce and Boeing Co. have both said they are working with the Japanese carrier to lessen the impact.

Limiting Cancellations

ANA will ask Rolls-Royce for compensation for the canceled flights, fuel and labor costs involved in flying larger than needed planes on routes to avoid cutting flights, and parts and labor for replacing blades on the engines, said one of the people. It will take until the end of 2019 to replace the blades on all aircraft with improved versions that Rolls-Royce will start supplying next year, the company said last month.

The carrier won’t cancel any 787 flights in the second half of September due to the engine issue, in line with the first half, it said in a statement Tuesday. The company had initially forecast about 10 a day. It will announce any impact from October onward at a later date, it said in the statement.

Maho Ito, a spokeswoman at ANA, said nothing has been decided on compensation.

Shares of the airline rose 0.3 percent to 286 yen as of the close of Tokyo trading Tuesday, matching the gain in the Nikkei 225 Stock Average. The stock is down 18 percent this year.