£62m ends Qantas engine scare case

Australia's flagship carrier said today it had reached a 95 million Australian dollar (£62m) settlement with Rolls-Royce over the mid-air disintegration of a superjumbo engine, which temporarily forced Qantas' entire fleet of A380s to be grounded.

Qantas chief executive Alan Joyce said the terms of the agreement were confidential, but said the settlement's profit and loss impact would amount to a 95 million AU dollar boost for the airline.

Mr Joyce said the settlement marked an end to the legal proceedings Qantas launched against Rolls-Royce in the Federal Court of Australia in December.

In November a Rolls-Royce Trent 900 engine on a Qantas A380 disintegrated shortly after take-off from Singapore, forcing the plane to make an emergency landing.

The Australian Transport Safety Bureau's interim report on the A380 incident said a manufacturing defect in an oil pipe deep within one of the engines led to an oil leak, which sparked a fire. The fire caused a disintegration of one of the engine's giant turbine discs, sending pieces of it shooting through the plane's wing.

The engine explosion was the most significant safety issue an A380 had ever faced since it began passenger flights in 2007 and prompted intense scrutiny of Rolls-Royce engines.

The settlement will help Qantas recover from the millions it lost following the incident.

The airline was forced to temporarily ground its entire fleet of A380s for a series of inspections and Mr Joyce said the plane damaged by the explosion would not return to service until February.

"Qantas and Rolls-Royce have had a long and successful commercial partnership spanning several decades," the airline said.

"Qantas looks forward to a continued strong relationship with Rolls-Royce on the basis of the settlement announced today."