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After The Engine Troubles, Rolls-Royce Resilience Will Be Tested By The Pandemic


12/18/2020


After The Engine Troubles, Rolls-Royce Resilience Will Be Tested By The Pandemic
The 114 year old British engine-maker Rolls-Royce is facing one of the biggest challenges in its history because of the novel coronavirus pandemic.
 
In order to ride through the global grounding of planes, 5 billion pounds ($6.8 billion) was raised by the Airbus and Boeing supplier of engines. However it also issued a warning that 2020 will be an even worse year than it had previously expected.
 
There were suggestions by analysts that the maker of powerplants for British nuclear submarines could need the government to come to its aid to survive. But  that was prior to the company securing extra funds in November.
 
Rolls is the symbol of British industrial interests and it is one of only four major aero engine-makers globally. It is also a crucial time for the United Kingdom as it is yet to strike a trade deal with the European Union prior to it formally leaving the bloc on January 1 next year.
 
However, worries about the Rolls’ finances, which is viewed as a significant roadblock for the company in an industry where decade-long agreements are signed by airlines, were compounded by the existing concerns over a long-running problem with engine blades.
 
The future finances of the company depend on the recovery of engine flight hours on widebody intercontinental jets because the company is paid by many airlines only when the airlines fly.
 
During the crisis, both have fretted about one of the industry’s key suppliers, according ot reports.
 
“When you buy an airplane it is for many years. If the engine manufacturer disappears or changes shape, that can hurt the (future) value,” one airline executive was quoted in areport as saying.
 
The issue is more acute for Airbus as the plane maker on the British firm for supply of engines for all of its wide-body jets after the end of the production of its A380,
 
And airlines that are seeking to place orders for Airbus’s flagship A350 or smaller A330neo want the plane maker to reassure performance of Rolls’ engines as well as about the financial position of the British company.
 
Airbus it wants “to understand what is going on with them on everything,” even though the plane maker supported Rolls’ technology, said reports quoting an industry source.
 
The grounding many of Boeing’s 787s because of the Trent 1000 problem will cost the United States based plane maker 2.1 billion pounds to fix in the 2017-2023 period, Rolls had said then when the demand for air travel was surging prior tp the pandemic hitting the global aviation industry.
 
Reports have said that Boeing is also anxious about the position of Rolls because it wants competitive prices from its main engine partner GE.
 
No comments on the issue were available from Airbus and Boeing.
  
In response to questions from Reuters, Rolls referred to comments made by Chief Executive Warren East on Dec. 11.
 
“We can now look forward with confidence that we have sufficient liquidity to get through the crisis, however long it lasts,” said Rolls’ Chief Executive Warren East about the company’s November fundraising.
 
(Source:www.economictimes.com)


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