Feb. 28, 2019, © Leeham News: The announcement today by Rolls-Royce that it has withdrawn from the competition to provide an engine for the Boeing New Midmarket Airplane came as a surprise.
This leaves CFM and Pratt & Whitney as the remaining competitors.
RR’s withdrawal wasn’t the only surprise.
CEO Warren East revealed Boeing had been notified shortly before the end of 2018.
East, at the RR earnings conference today, said he’s talked many times about the “NMA potentially being an attractive proposition from a strategic point of view.”
But, he said, RR could not complete sufficient testing in time to assure maturity of the technology before Boeing’s desired entry into service in 2025.
The following is the transcript from his prepared remarks and the Q&A.
It was all a matter of overlapping our Ultra Fan development program with the NMA requirements and seeing if we achieve a sufficient overlap to make a sensible answer from a commercial and risk point of view.
There is not sufficient overlap in the Ultra Fan architecture within the Boeing timeline at a sufficient level of maturity to tick those boxes in terms of risk and commercial common sense.
We notified Boeing shortly before the end of 2018.
If you don’t achieve a certain level of maturity, you lay yourself open to all sorts of in-service difficulties and potential customer disruption. That’s not a good place to go from a risk and commercial point of view.
Boeing have a specific engine program they are working toward. The exact specifications are not tied down yet in terms of requirements. Based on the extensive work we’ve done with Boeing in tracking those specifications and looking at how that overlaps with our Ultra Fan program, we simply couldn’t find sufficient overlap. There would have to be additional work that needed to be done specifically for the engine that would be required for NMA.
Technically, we could make that work. That wouldn’t be a problem. But, we do know form bitter experience that you need to do a huge amount of very rigorous testing work to ensure a certain level of maturity when the engine enters service. We simply couldn’t find enough hours in the day, even if you threw many more bodies at it, and much more money at it, there would not be enough hours in the day to do all that work in time to get to a sufficient level of maturity in time for Boeing’s time scales.
It comes down to what makes commercial sense and how much sort of risk do you wasn’t to put into that program. We chose to be completely open with Boeing and our customers and our investors that rather than get into a program and get toward the delivery date and say, sorry, we can’t do this, we need an extra year with more testing, once we just couldn’t make it fit in the timescale to get to that level a maturity, we had to withdraw.
That means we can concentrate on our Ultra Fan architecture development, which as you rightly observe, is going pretty well at the moment.
(East was asked what the future is for the Ultra Fan, possibly on an Airbus A350 stretch or a Boeing 787 re-engine; and of the growing Airbus-RR and Boeing-GE exclusivity.)
It’s certainly not our intention that the Airbus-Rolls, GE-Boeing thing is accentuated. To that end, it would have been very good to have been able to participate in the NMA program. We’ve gone into why we couldn’t participate.
As far as Ultra Fan is concerned, it’s a scalable architecture. It’s scoped to scale from about 25,000 lbs of thrust through to about one hundred and teens thousand pounds of thrust. That means we can go after wide body, we can go after single aisle.
We expect the first opportunities will be in wide body, things like you suggested in the question. Obviously, and offer of new airframes is a matter for both Boeing and Airbus, but I can assure you that our relationship with Boeing is very rich and very healthy and over the last 12 to 18 months while we’ve been working very closely on the Trent 1000 program, it’s been a great opportunity for some of the Boeing engineers to wander around in Derby and get a much better idea of how our Ultra Fan program is developing. So, I’m actually quite optimistic with both airframers for the future of Ultra Fan.
(Would RR partner on the NMA?)
Would we partner with somebody else? Well, we will have to see what happens and who gets selected.
We made our decision in terms of our proposed offering. If we can do something useful and it makes commercial good sense to partner in the future, then of course, we’re open. But let’s see how the future unfolds.