Rolls Royce shares rose on Tuesday, as the UK engineer sought to recover from its biggest one-day drop this year following news of an engine component failure at Cathay Pacific Airways.
The Hong Kong carrier cancelled at least 34 flights on Monday and inspected its entire Airbus A350 fleet after detecting the in-flight failure of an engine part.
Cathay Pacific said three of the 48 Rolls-Royce-powered planes it had inspected had gone through successful repairs and all of the jets were expected to resume operation by Saturday.
Rolls Royce rose over 4% in early deals in London, following a 6.5% drop the day before, while the FTSE 100 was broadly unchanged.
Rolls-Royce to cut up to 2,500 roles in latest efficiency drive
Some analyst said Monday’s drop was overdone. Jefferies reaffirmed its buy rating on Rolls Royce.
“While much remains to be clarified, including confirmation this affects a fuel nozzle, the £2.7 billion-drop in market cap implies what feels like excessive costs per aircraft, given this is likely limited the A350-1000 with low part count per engine,” analysts at Jefferies wrote in a note.
Airbus shares added 0.4% in Paris.
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