Rolls-Royce will be cutting down on its staff travel and and accommodation bill after costs to service one of its jet engines soared up earlier this year.
Extra costs were incurred by the company in April as it was revealed that parts of its Trent 1000 engine were wearing out faster than expected, leading the company to schedule additional engine inspections.
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In a memo circulated around the company seen by City A.M, staff were told that it would be creating “some additional financial headwinds to offset this year,” in part by reducing the amount it spent on travel and accommodation.
“With immediate effect, all future travel will be restricted to that which is essential for the business, including: vital customer and supplier meetings and field service engineer travel,” the memo stated.
A spokeperson for the company added that it was “reprioritising various items of discretionary spend to mitigate these incremental cash costs.
“Our guidance for 2018 free cash flow remains unchanged,” they added.
It is understood that Rolls-Royce spends around £150m on travel and accommodation a year, and that it is aiming to shave up to a third off that figure.
When he took over as chief executive of the company in 2015, Warren East dropped perks like a chauffeur and company flat as he set his sights on the manufacturer generating £1bn cash a year by 2020.
It also follows the company’s head of operations Simon Kirby leaving last week in what was seen as the first boardroom casualty of its shake-up.