Introduction

Abstract

In the year 2010, a failure of the Trent 900 aircraft engine supplied by Rolls Royce PLC to the aircraft manufacturer Airbus S.A.S. resulted in the grounding of the entire A380 fleet of Airbus’s customer Qantas Airways Ltd. for several days (Mouawad 2010). For its inappropriate response and information on the failure incident, Rolls Royce received substantial criticism from its customers and the media (Michaels and Pasztor 2010). In contrast to Rolls Royce, Qantas engaged in proactive information on the background of the incident and the actions taken to resolve the situation and attained a positive impact on its reputation for the way of handling the incident (Collerton 2010). For Rolls Royce, the failure situation and its way of handling it had a negative impact on its market reputation, raising doubts on its capabilities to develop and manufacture reliable aircraft engines. Consequently, the failure incident resulted in a significant drop of the Rolls Royce shares at the London Stock Exchange (Clark and Mouawad 2010) and substantially lower profits for Rolls Royce in the respective financial year (Mustoe and Rothman 2010).