Rolls-Royce will not be rushing to spend the proceeds from selling its 32.5-percent equity and program shares in International Aero Engines (IAE) to Pratt & Whitney (P&W), according to civil aerospace president Mark King. The $1.5 billion cash sum will be retained for general corporate purposes, said the company, which is making a “modest” financial investment in P&W’s PW1100G-JM geared turbofan (GTF) powerplant offered for the re-engined Airbus A320neo program.
The transactions will improve Rolls-Royce’s profitability in the civil aerospace sector over the next few years, with the majority of value being derived from V2500 engine flight-hour payments that the UK manufacturer will receive from IAE for 15 years. Rolls-Royce operating profits arising from restructuring of IAE are expected to be over £140 million ($217 million) in the first year, reducing slowly in successive years.
Under a new 50/50 joint-venture partnership announced alongside the sale of Rolls-Royce’s IAE shares last October, the two companies are to develop high-bypass geared turbofan engines for future mid-size (120 to 230 passengers) commercial jetliners, for which 20-year demand is put at “nearly 45,000” engines.
Rolls-Royce remains committed to IAE and its customers and is responsible for high-pressure compressor,fan blade and disk manufacture, and final assembly of (and engineering support for) 50 percent of V2500 engines. For its part, P&W continues to lead IAE with partners Japanese Aero Engine Corp. (JAEC) and Germany’s MTU Aero Engines, both of which will join the new partnership.
Trent Keeps Flowing
Despite a “challenging, uncertain [and] volatile world outlook,” Rolls-Royce faces a welcome future of growth that will see its global footprint increase and the in-service Trent engine fleet treble in size as the air transport industry sees the “arrival of the next generation of widebody [jetliners],” said King. Within the next six years, the company will have its products on six new aircraft types–including the Airbus A350, Boeing 787-9 and Cessna Citation Ten– bringing to 30 the number of platforms powered by its products.
The growth will see some 2,000 Trent engines delivered in the next five years, compared with the 18 years that elapsed while the initial 2,000 examples were entering service, and means that Rolls-Royce has had to increase its support network to service the aftermarket.
Last year, the UK engine manufacturer delivered some 17.5 million pounds of installed thrust, an annual level that King predicts will rise to about 30 million pounds in future. The current Rolls-Royce engine fleet is providing about 400 million pounds of installed thrust, with the order backlog covering a further 200 million pounds, with the prospect of a further 100 million pounds involved in current sales campaigns.
“[This] is why we have invested in capacity, tooling and training,” said King. That capacity investment includes the recent establishment of almost 1,660,000 sq ft of space in a new facility at Seletar in Singapore to support “significant increase in Trent manufacturing capacity.”
The growth also means that the company is employing more engineers than ever, with King reporting a 20,600-strong workforce engaged on civil engines. “We are not going to be short of engineering capacity; the challenge will be which programs to put them all on.”
As Rolls-Royce gears up for Trent XWB production for the A350, it is rationalizing its supply chain in a “deliberate move to a smaller number of larger [contractors].” It also is trying to ensure dual capability so that it can move production if necessary.
“We have a lot of time to ensure our supply-chain capacity to support [A350 production] ramp up,” said King. “We want to make sure there are options [to maintain] business continuity; a dual-source capability [and] to give more flexibility, more options.” He conceded that the company is vulnerable to any possible delays in the A350 program. “It is a risk, [but] we have the A380, A330 and corporate-aircraft markets [as offsets],” he said.
In a briefing ahead of this week’s Farnborough International Airshow, King said the Trent 1000’s entry into service on the Boeing 787 has “gone better than we could have hoped,” with more than 2,000 commercial flights having been completed since the troubled airliner’s delayed appearance in September 2011 and up to eight flights a day being flown by individual aircraft.
Testing of the Trent XWB for the A350 has been going “really well” on the A380 flying testbed, demonstrating the technology and providing a platform on which to build, he added.