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Rolls Royce secures 6 1bn deal with Emirates

Article By: ,  Financial Analyst
April 17, 2015 5:26 PM

Rolls-Royce has received an order from Emirates airline for 200 Trent 900 engines.

The deal, valued at £6.1 billion, is the largest in the engine manufacturer's history and comes shortly after another large order from Air China valued at £665 million.

Emirates will use the engines to power 50 new Airbus A380 superjumbos, which will enter service in 2016.

Both deals come after a tough year for the group – the first in a decade to include a fall in annual sales. This led to a series of profit warnings and plans for 2,600 job cuts globally – around 1,700 are expected to go in the UK. The news has boosted the company's share price, but the deal will not lead to any new British jobs.

Rolls-Royce says the Emirates deal confirms that the Trent 900 is the "engine of  choice" for the A380. The company has more than a 50 per cent market share for the superjumbo.

The engine was first used for a commercial A380 in 2007 and is now used in more than 70 aircraft across eight operators.

According to Rolls-Royce, the engine is extremely fuel efficient, and the latest model includes technology that was developed for its other engines – the Trent XWB and Trent 1000.

Chief executive at Rolls-Royce, John Rishton, said he was delighted about the deal. "Emirates has again placed its trust in our technology, with the biggest order in our history," he said.

Emirates has been using Rolls-Royce engines in its fleet of aircraft since 1996.

Terry Scuoler, chief executive of manufacturers' organisation EEF told the Guardian that the deal is a huge boost for the UK industry. He sees it as a vote of confidence in British engineering.

"The aerospace sector is critical for manufacturing and high-skill jobs, in particular the many companies that cascade down through the supply chain,"' he added.

During the announcement in London, Sir Tim Clark, president of Emirates called Rolls-Royce a key partner. He explained that continual improvements in the economic and operations performance of the Trent 900 had been decisive factors when choosing the engine for the A380s.

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