Rolls-Royce speaks out on its views of Airbus and Boeing going with a new engine option for their A320-737 class airplanes in this long Wall Street Journal article.

We’ll make two observations:

1. When we were at the Airbus Innovation Days in May, Tom Williams, the EVP of programs, told us that Airbus had ruled out RR as a NEO provider because the fuel burn of the Rolls’ proposed two- or three-stage engines was 2%-3% higher than those offered by Pratt & Whitney’s GTF or CFM’s Leap-X; and that commercial terms RR wanted weren’t acceptable to Airbus. We had actually heard about a month before RR was out of consideration by Airbus but couldn’t confirm it at that time. After speaking with Williams and around the Farnborough Air Show in July, RR first went public with its view that re-engining the A320 and 737 classes didn’t make sense and Airbus and Boeing should wait and do new airplanes. Call us skeptical, but we can’t help but think there is a cause-and-effect, here. Update, 1:00PM PDT: We received an email from Bloomberg News with a story dated June 16 reporting that RR said then it didn’t see a business case for a NEO and preferred a new airplane. So RR took a public position earlier, but still after Airbus ruled RR out from its NEO studies.
2. Airbus officials said at Farnborough it has the business case for re-engining (which is repeated in the Wall Street Journal article) and that the question for them is whether they can find the resources (ie, engineers) to proceed. John Leahy, COO-Customers, was more direct, in his typical way. He said Airbus had to be convinced it had the A380 and A400M programs under control before releasing the engineers to a NEO project. We learned earlier this week that officials believe it likely they will find the resources to proceed.