Suit Stemmed From The Uncontained Failure Of An Engine On An A380 In November

Rolls Royce and Qantas have reportedly reached an out-of-court settlement in a case stemming from the uncontained catastrophic failure of an engine on a Qantas A380 last November. The airplane returned to Singapore and landed without further incident.

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Qantas temporarily grounded its entire A380 fleet following the incident. The airline was seeking damages from the engine maker for loss of business. Rolls-Royce had originally said it was not liable for the engine failure, but analysts say the settlement represents a pull-back from that position. An investigation determined that a defect in the manufacture of an oil-feed pipe was the most likely reason the engine failed.

Media sources including Bloomberg News and the Financial Times report that the details of the agreement are being kept confidential, but that legal proceedings against Rolls-Royce will be dropped. One London analyst said that the entire industry has been waiting to see how this situation would play out, and that it will breathe easier now that it has been settled.

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It is estimated that the incident cost Rolls-Royce some $90 million in 2010. The engine maker said in a statement that it considers Qantas a "valued customer," and that it is pleased that the matter has been resolved.

FMI: www.qantas.com, www.rolls-royce.com