Rolls-Royce has sounded an upbeat note that the recovery in demand for large long-haul aircraft, its key market, is “coming back strongly”, echoing comments made by client and plane maker Airbus.
Tufan Erginbilgic, who took the helm of the British aero-engine group six months ago, said demand had returned, with China’s recovery “stronger than we expected”.
The company, which builds and maintains large engines for widebody aircraft including Airbus A350 jets and Boeing’s 787, said last month that engine flying hours were back at 83 per cent of pre-Covid 19 levels.
Its business model of earning revenues on engines in the air and on after-market sales was badly hit by the grounding of a large portion of the world’s fleet during the pandemic.
The strong rebound in the aviation industry is underpinning a buying spree from airlines across the globe, bolstering order books at Boeing and Airbus. While demand for new aircraft has been concentrated largely in smaller, short-haul and medium-haul aircraft, demand for wide-body planes has accelerated.
Executives meeting at the Paris Air show after a four-year hiatus following the Covid pandemic have said demand is outstripping supply amid persistent supply chain constraints.
Air India on Tuesday finalised an order for 470 aircraft from both Airbus and Boeing, including 40 A350 wide-body jets which are powered by Rolls-Royce’s Trent XWB engines.
Stan Deal, head of Boeing’s commercial aircraft division, told the Financial Times separately that there was “a lot of robust ordering”. A lot of the orders being placed were for aircraft to be delivered “out into the 2030s”.
“A lot of airlines are getting back to a growth story and trying to assure they have capacity locked up for that growth story year after year,” he said.
Erginbilgic, who is in the middle of a radical transformation of Rolls-Royce, told reporters at the show that progress was being made.
He also said the company did not need to re-enter the market for single-aisle aircraft to grow in the future but did not rule out a partnership. Rolls-Royce, he said, does not need “narrow-body to take the business where we want to take it”. The company’s wide-body business would continue to grow, he added, as would its business jets segment.
Rolls-Royce left the market for single-aisle aircraft more than a decade ago when it pulled out of a joint venture with Pratt & Whitney of the US. There has been speculation that the company would need to find a way back into the market on the next generation of aircraft.
Erginbilgic said it was a “moot point right now” as neither Boeing nor Airbus would be developing another aircraft until 2035.
He stressed, however, that the company’s UltraFan programme of engine technologies would give it a way back in.
“It’s a scaleable technology, we can scale it down all the way to narrow-body,” he said.
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