Rolls-Royce

Rolls-Royce vs Quantas

Posted on November 10, 2010. Filed under: Airline Industry, Quantas, Rolls-Royce |

For those interested in  Corporate Reputation the recent blow out of an Roll-R0yce Trent 900 engine on a Quantas Airbus 380 is an interesting example of two organisations with big reputations to protect, and with one likely to take a hit.  Rolls-Royce, whose name is enough to conjure images few can rival, Quantas as anyone who has watched ‘Rain Man’ will know has a 100% safety record.

For Rolls-Royce the reputation of their engines is key to their competitive strategy.  With few providers of engines and few buyers of engines, reputation is a big part of gaining business.  If airline passengers start to lose confidence with Rolls-Royce then their business will be severely damaged.  Rolls-Royce’s share price fell 10% as a result of this incident. Though we are unlikely to see the type of mud-slinging between strategic partners that characterised the recent BP disaster, it is clear that each side will be doing their utmost privately and publically to manoeuver the blame to the other side.

A classic ploy is Quantas releasing information regarding oil-leaks, Rolls Royce countered by highlighting Quantas’ tendency to fly their planes at the upper-limits of the engine’s performance band, (though within the certified limits rejoined Quantas).   Though the old Bird Strike problems is a nice compromise.

An interested onlooker is Airbus.  Having finally got  the A380 into production, well ahead of their only competitor in this market Boeing, and having finally begun to received orders that have started to make the A380 a viable proposition, they have a reputation to protect.  It could rest on whom Quantas points the finger at.  Are they likely to say, we didn’t service these engines properly, are they going to say they should have been a more careful owner or are they going to highlight a design fault with the engine. 

We can only wait and see.