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Rolls-Royce engine dispute casts doubt on United's A350 order

United Airlines has revealed a dispute between the engine manufacturer Rolls-Royce and its long-delayed Airbus A350 purchase. This is 'the latest twist in a long-running saga of jet procurement.

The A350 order dates back to 2009, one year before United Airlines merged with Continental Airlines. Continental Airlines was a Boeing champion and had exclusive ties with Boeing. The A350 contract was restructured later, but it has been deferred and changed numerous times.

In a filing to the regulatory authorities late Thursday night, the airline stated that it was in dispute with the engine manufacturer Rolls-Royce, and did not give investors a timetable as to when the planes might arrive.

The dispute over United's ability to put the A350 into service is raised by the fact that Rolls-Royce, a British company, is the only one who makes the engines.

United's filing continued to list 45 Airbus A350 aircraft on its books, with an expected arrival date of 2027. However, it did not provide a delivery schedule. In a previous filing, United had indicated that it expected deliveries to extend beyond 2026.

ENGINE CONTRACT DISPUTE

The airline said that it signed a contract in 2010 with Rolls-Royce to purchase?engines, maintenance services and parts. It paid $175 million in advance in 2017 to the British engine manufacturer.

United claimed that Rolls-Royce had breached their contract in December of last year. Rolls-Royce denies breaking any contract.

The U.S. airline's version states that Rolls-Royce refused payment and claimed United was to blame. It added that both companies now claim the other side owes money.

A Rolls-Royce spokeswoman said that the company has met its obligations based on agreements dating back as far as 2010. However, she could not provide any further information due to ongoing legal proceedings.

Rolls-Royce called United "a valued customer" and expressed its eagerness to resolve what it called an "historic issue", and strengthen the partnership. The spokesperson stated that "we are aware of the problem and confident in our position."

Three-way Pressure Point

Analysts claim that multi-billion dollar jet deals are complicated three-way relationships between the airline, the planemaker, and the engine supplier.

United, in a reference that is likely to be directed at Airbus said that it was weighing the implications of?the dispute for?other parties.

Airbus refused to comment. Airbus continues to display the stalled orders on its backlog, in what industry insiders describe as a standard move to protect contractual rights.

United's spokesperson declined to provide any additional comment.

United Airlines has been a major purchaser and a battleground between Airbus vs Boeing over the years.

Scott Kirby, the Chief Executive Officer of the airline, told reporters that the company would announce its A350 order in September 2025.

The airline said that a decision on the aircraft was tied to the long-term replacement needs of its widebody aircraft, namely the need to replace older Boeing 767s or 777s.

The repeated delays have led to speculation that United may cancel the order, or convert it to another Airbus model. For example, the A321neo aircraft family which it has purchased in large quantities. Reporting by Rajesh Kumar Singh in Paris and Tim Hepher; editing by Chris Reese

(source: Reuters)