Rolls-Royce, the British aerospace and defense company, remains unfazed by the recent price increases for its aircraft engines, as the industry experiences a surge in demand for new aircraft and engines. Ewen McDonald, the company’s chief customer officer for civil aerospace, reassured that the price hikes have not hindered sales, citing a record year of sales for Rolls-Royce.
“Pricing has been up across the industry. But we also had a record year of sales … It’s certainly not having an impediment,” McDonald said on the sidelines of the Singapore Airshow. Rolls-Royce aims to quadruple its profit over the next five years by enhancing jet engine performance and reducing costs, with a focus on improving margins in its engine business.
Despite a recent 12% increase in engine maintenance prices, Rolls-Royce remains confident in its market position. McDonald addressed concerns about losing customers, noting that while Thai Airways recently chose competitor GE for engines for 80 new Boeing 787s, Rolls-Royce values its long-standing relationship with Thai Airways and remains optimistic about future opportunities.
Rolls-Royce has faced criticism over the durability of its XWB-97 engine, particularly in hot and dusty conditions. However, the company has committed to investing over 1 billion pounds ($1.26 billion) in improving its engine types, including doubling the time the XWB-97 can stay on a plane before overhaul in harsh environments.
The global demand for air travel has nearly returned to pre-pandemic levels, leading to increased orders for new aircraft. However, the industry is grappling with shortages of parts, labor, and new aircraft, which could limit growth. Rolls-Royce is considering a return to making engines for single-aisle planes, but is awaiting further clarity on future aircraft designs.
“The constraint at the moment is how many aircraft can be built,” McDonald explained. “People are ordering further and further out because they’re worried they won’t be able to get any new aircraft to support their growth.”
Despite challenges, Rolls-Royce remains optimistic about its future prospects and is focused on meeting the growing demands of the aviation industry.
(Source: Reuters | Bloomberg | CNA)
