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Problems For Jet Engine Maker Rolls-Royce (RYCEY.PK) Due To Qantas Blowout

|Includes:Rolls Royce Holdings plc ADR (RYCEY)

 Shares of Rolls-Royce (OTCPK:RYCEY) , the British aircraft engine maker, extended their declines on Friday after the chief executive of Qantas suggested that a design flaw or manufacturing defect was the most likely explanation for a dramatic engine blow-out that forced one of the Australian carrier’s A380 jets to make an emergency landing in Singapore.

An engine failure that forced the emergency landing of a A380 superjumbo jet in Singapore on Thursday could further delay manufacturer Airbus's bid to claw back the plane's hefty development costs.

Airbus can ill afford setbacks in sales of the A380, a plane which cost 12 billion euros (10.5 billion pounds) to develop but has failed to attract airlines in some key markets including the United States and Japan.

Rolls-Royce (OTCPK:RYCEY) shares fell 2.1 percent in morning trading on the London Stock Exchange, extending a drop of more than 5 percent Thursday.

Rolls-Royce’s (OTCPK:RYCEY) problems also raise questions about the newest plane being developed by Airbus, the A350, made out of composite material and meant to compete with the Boeing 787. Unlike most aircraft programs — including the A380 and the 787, which are built with two engine options — the A350 will be configured with only one engine, the Rolls-Royce (OTCPK:RYCEY) Trent XWB.

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Disclosure: "No Positions"
Stocks: RYCEY