Rolls ties up BA engine deal

Posted on 6 Jan 2011 by The Manufacturer

British aerospace company Rolls-Royce today announced that it has finalised a $5bn (£3.2bn) deal to supply its Trent engines to British Airways.

Rolls will supply Trent 900 engines for 12 Airbus A380s with the option for seven more and Trent 1000 engines for 28 Boeing 787 Dreamliners with the option for 18 more. The 45bn value of the deal is reliant on all options being taken up.

The contracts include long-term after service and support agreements.

Sir John Rose, chief executive of Rolls-Royce, said: “We welcome the conclusion of these contracts with a valued customer. We are pleased that British Airways continues to put its trust in our world class Trent engine technology and service provision.”

Howard Wheeldon, aerospace industry commentator and senior strategist at brokers BGC Partners, said the completion of the deal should act as a vote of confidence in Rolls-Royce after an incident in November when an a Trent 900 engine exploded on a Quantas A380 mid-flight, causing the aircraft to make an emergency landing.

“From both a Rolls-Royce and airline customer perspective the latest order received by the company is in (BGC’s) view a huge and well deserved vote of confidence in the Trent family of engines by a very long time traditional customer,” said Wheeldon.

“Trent has many hundreds of thousands of hours in airline service today and incidents have indeed been very rare. Thus while Rolls-Royce sill has a little explaining to do it must get on with the job of building Trent plus the many other engines that the company has on order and also to learn from the bad experience it suffered late last year.

“Indeed, this order is not only a time to celebrate Rolls-Royce prowess in aero engine manufacturing it is also a huge and justified vote of confidence in British design and engineering at its best.”

Rolls-Royce shares jumped 1.8% to 666p as a result of today’s announcement.