* Qantas grounding extended beyond initial 48 hour estimate
* Qantas believes A380 failure was material or design issue
* Shares fall 4.2 percent in flat market.
By Michael Smith
SYDNEY, Nov 8 (Reuters) - Australian airline Qantas (QAN.AX) discovered anomalies on three Airbus A380 engines and is keeping its fleet of the superjumbos grounded beyond an initial 48-hour deadline for further checks.
The airline's shares lost as much as 4 percent on Monday due to investors concern about damage to its reputation as one of the safest airlines in the world and the financial impact of grounding planes.
"For all businesses it is imperative that safety is front of mind when running the business. Qantas has a pretty good track record and they probably get a lot of unwarranted attention," said Jason Teh, portfolio manager at fund manager Investors Mutual.
A Qantas A380 engine broke apart in flight on Thursday, forcing the world's largest passenger plane to make an emergency landing in Singapore with 459 passengers and crew on board.
"On three of the engines what we found is slight anomalies -- oil where oil shouldn't be on the engines," Qantas Chief Executive Alan Joyce told ABC radio on Monday.
"We're just trying to check what the cause of that would be. These are new engines on new aircraft and they shouldn't have these issues at this stage, so it's given us indication of an area for us to focus into," Joyce said.
Qantas plans to hold a news conference later on Monday.
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