At 1200 Eastern Standard Time, on 3 February 2007, after departing Sydney Airport and while in a climb at approximately 4,000 ft above ground level, the flight crew of a Boeing 747-438 aircraft, registered VH-OJM, heard several loud bangs and felt vibration through the aircraft structure. Observing an increase in the exhaust gas temperature indication for the number-3 engine, the crew following the non-normal checklist, shut down the engine, dumped excess fuel and returned the aircraft to Sydney Airport.

A subsequent examination of the engine found that it had sustained a high pressure compressor (HPC), stage 1, blade failure. The mode of failure was known to the engine manufacturer, who had attributed it to blade tip rubbing, due to distortion of the engines high pressure case (module 41). To address the problem, the engine manufacturer had introduced service bulletin (SB), SB72-F002. The number-3 engine did not have the service bulletin embodied at the time of the failure.

Although the exact time of the blade tip rubbing and subsequent cracking could not be determined, the engine manufacturer believed that crack initiation to blade failure took approximately 50 cycles.

During the investigation, the aircraft operator experienced a subsequent failure, bringing the total number of failures of this type for the operator to five. Similar failures were reported by another aircraft operator, with 16 similar failures reported in total.

As a result of the incident, the operator accelerated its modification embodiment program and expects to have all installed engines modified by early 2010.