Rolls-Royce plans to cut more than 4,000 jobs this week

Britain’s Rolls-Royce said a costly compressor problem that had grounded Boeing planes had now been found in a different type of engine, compounding pressures on a group that is due to cut more than 4,000 jobs this week. Britain’s best known engineering company has been hit by a problem with a compressor in the Trent 1000 package C engine that is not lasting as long as expected, grounding planes, forcing inspections and angering airline clients. The engine powers Boeing’s 787 Dreamliner jet. 

On Monday it said it had now found the same issue on a “small number of high life Package B engines”, requiring a one-off inspection of the B fleet and sending its shares down 1 per cent. The news, which will not affect Rolls’ full-year free cash flow target, comes as the group embarks on the latest stage of a major restructuring programme under Chief Executive Warren East that is designed to boost profitability. On Friday the group will host a capital markets day where, according to a person familiar with the situation, it will announce more than 4,000 job cuts, mostly in Britain and affecting support and management roles.

Air France buys 31% stake in British carrier Virgin Atlantic

Air France has taken a big piece of Britain's second-biggest long-haul airline, Virgin Atlantic.

According to The Independent, the French airline, which also owns KLM of the Netherlands, is to buy a 31 per cent stake in Virgin Atlantic for 220m GBP.

It leaves the Virgin Group with just one-fifth of the airline's equity. Delta will keep a 49 percent stake in Virgin Atlantic.

The airline founded by Sir Richard Branson in 1984 will retain its identity and independence as a British carrier with a UK operating certificate.

Talking about the deal, Sir Richard said, "This is a fantastic opportunity to extend our network and create a stronger customer champion, as well as being extremely beneficial to our people and the Virgin Atlantic brand that our customers love dearly."

The Virgin Atlantic president also wrote a letter to his staff, which read, "We've had to endure a consistently uneven playing field with British Airways keeping a stranglehold on Heathrow slots, enabling it to feed its long-haul operation from a myriad of short-haul flights across the UK and Europe."

Adding, "And now we have Brexit, which before it's even happened, has had a negative effect on the financial performance of both our holiday company and the airline, principally due to the collapse in the value of the pound."
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