On 15 March 2010, an Airbus A320-232, registered VH-VQO, departed Adelaide, South Australia on a scheduled passenger flight to Darwin, Northern Territory. On board were six crew and 175 passengers. When climbing through 12,000 ft, the flight crew observed a loss of thrust from the number-2 (right) engine, accompanied by a loud bang and several warning indications. Passengers also reported seeing flames and smoke emanating from the right engine tailpipe.

The crew shut down and discharged both fire bottles into the right engine. They then returned and landed at Adelaide.

A post-landing inspection by maintenance personnel found metal debris and evidence of a fire in the tailpipe of the right engine. Removal and examination of the engine revealed evidence of a titanium fire that originated in the vicinity of the 6th stage high pressure compressor.

The engine was identified in an engine manufacturer service bulletin. This included new production engines that received a limited number of High Pressure Compressor Stage 6 Stator Vanes from the suspect batch. The engine manufacturer recommended certain serial number engines (which included the incident engine) in this category remain in service until the next scheduled overhaul shop visit. It was considered likely that the partial power loss was initiated by a failure of one or more of these vanes.

The operator advised the Australian Transport Safety Bureau (ATSB) that it had been operating four engines (one on each of four aircraft) that were identified within the service bulletin.

At the time of writing this report, the operator was working with the engine manufacturer to remove all four engines from service by September 2010.