Qantas Reports Cost of A380 Engine Failure
Qantas today placed an $80 million price tag on the effect to its business of the November 4 uncontained engine failure on one of its Airbus A380s and the subsequent grounding of its superjumbo fleet. The figure does not include the cost of repair of the damaged aircraft and engines, estimated at no less than $100 million, covered by insurance or by existing contractual arrangements with Rolls-Royce.
The company added that it remains in talks with Rolls-Royce about a settlement to compensate the airline for its commercial losses.
“Qantas’s response to this unprecedented event was swift and appropriate,” said Qantas CEO Alan Joyce. “In very challenging circumstances, and with the commitment and hard work of our people, we managed to maintain 98 percent of our international operations.”
Joyce’s comments came as part of a statement released today by Qantas announcing a half-year profit before taxes of $417 million for its fiscal period ending December 31, 2010.
“With half-year underlying profit up more than 56 percent year-on-year, all parts of the group performed well, with Jetstar and Qantas Frequent Flyer delivering record half-year profits and Qantas Airlines’ performance significantly improving,” said Joyce.
“The group’s response to events that included the A380 Rolls-Royce engine failure, and subsequent temporary grounding of the Qantas A380 fleet in November, also showed us to be flexible, adaptable and resilient.”