Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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Pontifications: New Rolls-Royce CEO paints a dire picture; all scenarios on table at Airbus
By Scott Hamilton
Jan. 31, 2023, © Leeham News: Rolls-Royce’s new CEO says the engine group is a “burning platform,” failing to give returns.
Tufan Erginbilgic, who joined RR as CEO on Jan. 1, said this is the “last chance” to get its house in order and turn a profit.
The dire outlook has potentially disastrous implications for Airbus. The airframer relies exclusively on Rolls for its engines for the A350 and A330neo. Airbus is monitoring the situation closely. Market sources tell LNA that Airbus is assuring customers and potential customers that Airbus will make sure engines and aftermarket support are available, without detailing how.
An Airbus insider tells LNA that all scenarios are under consideration. Some speculate that Airbus might either provide financial support to Rolls or even, in the extreme, buy the engine company. Others believe either course is unlikely because Airbus has its own production problems to sort out. Its fiduciary duty is to its stockholders. “It’s not their job to inherit a problem that was created decades ago,” one London-based analyst says.
What’s at the root of RR’s current problems? Many of the reasons have been discussed before, but let’s summarize them.
Trent 1000 problems
Trent 1000 engines powering the Boeing 787 began failing. Flight restrictions for trans-ocean operations were enacted or airplanes were grounded while RR developed a fix or struggled to provide new engines. At one point, around 50 787s were grounded across the globe, some for years. Rolls was unable to meet the repair demand in its engine shops. This is warranty work, for which RR is on the financial hook.
As Trent 1000 work backed up, some routine MRO work on Trent 700s, which power the Airbus A330ceo. This displaced MRO revenue on which RR Engines relies for its profits. Engine company business models don’t make money on the sales; revenues and profits come from MRO. Rolls had to restate its financial assumptions years ago because of the impact the Trent 1000 had displacing normal MRO business.
COVID impact
The COVID pandemic shut down international travel and virtually all widebody regional operations. This meant the global A330 fleet was grounded, chopping MRO revenue even more. There are still around 1,500 engines on the ground today of all types, but mostly A330 engines because international traffic still is in recovery mode.
Trent XWB
Operationally, the Trent XWB performs well. But on-wing time and Time Between Overhauls is much shorter than the Trent 700 experience, industry sources tell LNA. High-pressure turbine blades and Intermediate compressor blades do not last as long as designed. Neither are advanced materials needed in the super-hot operating engine environment that is required to in part meet reduced fuel burn. Some parts last only 2,000-3,000 cycles. On-wing time is three to four years instead of seven to eight for the Trent 700.
Exiting the narrowbody market
Years ago, Rolls sued Pratt & Whitney over patent infringement for blade design on the Geared Turbofan engine. The lawsuit eventually was settled, in part by RR withdrawing from the International Aero Engines (IAE) partnership that developed the V2500 engine used on the Airbus A320 family. RR shared in the MRO revenues for the V2500. Airbus preferred that the GTF, which succeeded the V2500 on the A320 family, be marketed and supported through IAE. PW does this exclusively.
The narrowbody market represents at any given time about 85% of the sales by Airbus (and Boeing). Giving up its share of this sector was arguably one of the dumbest decisions Rolls-Royce could make.
Could be RR is negotiating something big with Airbus / Boeing / UK Government, in the media..
I worked at Rolls-Royce MEG in Bristol from 1982-1990. There was much talk of a bleak future in those days, particularly when the wall came down and defence budgets disappeared. Incompetent senior management was expanding as well, and I suspect by now the incompetence is total.
That “knowNothing but spouting strong oppinion” analyst attack on RR years ago was rather successful, wasn’t it?
What analyst attack?
RR not currently in narrowbody arena- fact
Trent 1000 grounded planes on RR’s wallet- fact
RR still struggling with 1000 TEN/7000- fact (https://aviationsourcenews.com/airline/tap-airbus-a330neo-engine-performance-not-up-to-scratch-says-ceo/)
RR has been talking about their weakened financial states for years, all stemming from the very expensive Trent 1000 groundings that they have yet to fully recover from. The only new and surmising thing in this article is that I thought the TXWB was doing better.
None of those are the result of analyst “attacks”. It’s a classic case of over promising and under delivering.
RR not in the single aisle new build market, yes. But they still have legacy work from the IAE 2500- they continued to make parts but were no longer risk sharing partners.
They also had the BR-715 engine on the B717/MD95 and of course are a big player in the existing and new build large business jet market with their BR and Pearl range ( about same size as smaller end of the GTF range)
Not to forget the B-52 reengining with 8 per plane of the F130/BR700 series
2015/16.
post on this site. ( Scott, I could not refind that item?)
Some “analyst” criticized RR for lack of profits under evaluation metrics of a typical quarterly driven company.
And it was a fake.
But the pressure created effected that management went the standard way of contracting the workforce. That does wonders for share values ( oxymoron, but what does one expect )
This happened when RR was entering the Trent1000 vagaries. That workforce just shed would have been dearly needed for doing work on producing fixed new parts for Trent 1000.
IMU this was carefully crafted attack.
Is the new ceo a liss Truss for RR investers like my self have lost thousands soon as he opened is mouth will he conpensate us for his erroneous speech cos he won’t what a disaster.
RR used to profit with engines having a very long time on wing coupled with a power by the hour agreements made RR profit. If their engineering cannot design such engines with x2 life of the GEnX on wing they have to design engines much cheaper to produce with a much lower part count and lower spare parts cost opening up to allow PMA parts and DER repairs now in principle blocked together with Airbus/EASA. At least open an advanced repair development shop (like together with Delta Tech Ops and LHT) as the number of RR repair stations has increased by a few to rescue expensive parts. The UK MoD and must pump money into the military side to develop new alloys and processes that can be used by the commercial engines as well like “all ceramic hot sections”. Germany and BMW might have cash to buy the rest of RR Aerospace, merging RR cars and aircraft engines again?
I doubt BMW wants to touch RR with a ten foot pole. They tried to re-enter the engine game with a joint venture with RR resulting in the BR700 but they threw in the towel within 10 years and ceded full control of the program to RR.
Well, BMW got RR Aerospace stock when selling back the German Jet engine operation in Dahlewitz and BMW got the RR name rights for the Rolls Royce cars (VW only got the Bentley name) then BMW built a new factory for them. So BMW is or been a major RR aerospace stock owner. If they want to buy the rest cheaply is another question. Ironically BMW Aero engines kind of started building the Pratt & Whitney R-1690 Hornet. Later license produced the GE J-79 and some their engineers were sent to France after WWII designing Snecma ATAR engines. After the War the Sovites took the Berlin Spandau staff and sent them designing the TU-95 engines. So they have been with “everybody”
BMW even started with aero engines in 1916, it is “Bavarian Motor Works”
Their logo is actually a stilised propeller.
-There was also “BRAMO” BRAndenberg MOtorworks which was purchased by BMW in 1939. BRAMO itself was an offshoot of Siements Schuckert. These companies had illustrious engineering achievements. As I recall Siements made great progress in electric aviation but then sold its holdings to RR.
-There are perhaps a number of French and German companies that could jointly purchase RR eg MTU, Safran etc.
IMU there is no line of turbo engines around the globe (maybe beyond the Brits) directly after WWII that did not have a German engineering core.
RR Nene, de Havilland Goblin, General Electric I-A, Metropolitan-Vickers F.2 …
cleas, please read my post again.
I-A, J31,J33 were British clones.
The J35 was the first axial flow engine.
Afaik a former Junkers guy ( or two ) was instrumental there.
The “Junkers” Museum in Dessau has a wall full of Junkers engineering biographies. 🙂
Depends on what you say ‘german engineering core’
Is that axial flow ? The UK worked on that through MetroVick F2 before the war ended. It was known about by Whittle of course who chose centrifugal as a better pathway .
The russians obviously had the engineers from germany, but soon were sold some of the Brits Nene and had to reverse engineer it ( but still a big advantage)
https://en.topwar.ru/181622-kak-specialisty-junkers-hejnkel-bmv-prodvigali-posle-vojny-sovetskoe-reaktivnoe-aviastroenie.html [its in English]
GE had its first axial flow engine the J-35 after their earlier I-A engine derived from Whittles designs which became the J-33.
The J-35 was started before the war ended alongside the J-33 , so again cant have been derived from any german tech – who were limited by types of metals they could use so were just simply made for that reason
One could say also the French Atar used german engineers and technology knowhow.
Unless you have something else , its the Russians and French who most directly used German tech
I don’t think BMW will do this. Doesn’t make much sense.
Perhaps a MTU-Rolls-Royce merger?
RR already bought the power business ( diesel engines and such) off MTU a few years back. RR still uses the MTU brand on the engines
Kind of like GE owning Cummins Engine, clearly they failed to focus on their Jet Engine business while picking up all the odds and sods stuff.
GE got out of all that stuff.
BMW jet engines revival came from them buying the existing jet engine business of Kloekner-Humboldt-Deutz AG (KHD) with RR existing german engine business.
https://en.wikipedia.org/wiki/Motorenfabrik_Oberursel
So BMW at that time was really only a financial partner and bought no engine expertise or facilities with them
BMW left the aircraft engine business in 1959 when they sold out to MAN to create the MTU turbine engines which still exists as a now independent company of course in military fast engines and a partner with Pratt
Typo going on as is the Trent 7000 not 700. The Trent 700 was the A330CEO engine and quite successful choice over GE/PW.
Along with the engine issues, RR has expanded into diesel engines and control system including large ship water jets and other areas with the controls there off (and I believe Sub Nuke Reactors) ship stabalizers.
Sure someone can rescue the Jet engine business and sell off the rest at a fire sale. MTU (aero engines) might well be the best placed (management wise) for Airbus to back.
Their issue is that the 3 spool is costlier, heavier and worse fuel consumption than a two spool GE’s and the faults on it on the 787 as well as the A380 meant a major loss never to be recovered.
I’m not sure if the typo comment was directed at me (since claes didn’t mention any specific engines) but to clarify I was talking about the BR700 powering the 717 and various business jets not the Trent 700[0].
Not always worse SFC. The soft bearing design of the RB211-series made the rotors align with the principal axis of interia making a vibration free engine, still with pretty large play between blade tips and seals, but while the competition engines rubbing out and ovalized in service worsening its sfc the RR engine trotted along keeping its test cell sfc, just some sub idle stall now and then (Like the RB211-535E4 on the 757’s) I think the RR advantage stopped with the BA launched GE90 that seems to keep its performance better and its GE sucessors built on the same rotor/frame/bearings structure layout. The RR Ultrafan looks again to have some GE influence and might be a game changer for the biggest applications if it gets onto the A350-1000 and 787-10 if RR gets it right, just look at the progression of the BR700 from the BR710 to the Pearl 10X.
When I was at RR (2013 – 2016) they had and acknowledged a severe cash flow issue and yet still proceeded with a share buy-back scheme.
The decision to exit the narrowbody market may have been necessitated by that same cash flow issue, a short term fix with long term consequences now biting hard.
They must have hoped that their products on A350, A330NEO, 787 and 777X would pull them out of the puree. First sign of this plan going badly awry was rejection for the 777X, and then the Trent 1000 issues and henceforth losing out badly to the GenX.
If I were the new boss I have to confess I’d be at something of a loss as to what to do – as someone said above, this situation is decades in the making. If I were a shareholder I’d sell, if I were Airbus I wouldn’t touch it with a bargepole.
But if I were United Technologies (who own P&W) it has some very attractive capabilities, capacity, products and revenue streams which could be very helpful in getting P&W back into the big engine market. Buying RR would also prevent the Chinese getting their hands on it, which is a possible alternative worth pondering, for good and for ill.
United Technologies on longer exists. It is now Raytheon Technologies that owns P&W… and yes that would be an intriguing outcome if the competition people would let it fly.
I sure hope they will find some solution and if necessary UK will block the sale to P&W. This would concentrate all engine manufacturers in US which means bad times for everybody else.
There ain’t much love in the hearts of RR vs. PWA and opposite after the IAE marriage. Their design philosophy on big engines is a bit opposite with PWA having to few bits to work well and RR too many making it too costly and RR having a tradition to repeat earlier PWA misstakes. RR learned alot working on the CF6-80C2 producing parts for GE that came into the T700 beating the CF6-80E1 in the market with better thrust and lower mass initially. You can see the GE influence on many parts of the T700. GE can also make misstakes CF6-32 (https://www.sae.org/publications/technical-papers/content/780511/)
Zero chance the Chinese would be allowed to buy it.
Famous last words..
UK government still has a ‘golden share’ in the RR business from its rescue some time back.
It gives them veto power.
Bombardier was sold to Airbus JV under Canadian government pressure precisely to avoid it going to Chinese interests when the family found no interest from Boeing and (initially) Airbus.
So if another company does buy RR the the shares will go up by quite a bit so being a shareholder in the company may not be a bad thing, also if RR are having problems now then why ate they building mni nuclear reactors and building hydrogen engines if they are having problems with the engines they are already sold
“High-pressure turbine blades and Intermediary compressor blades do not last as long as designed. Neither are advanced materials needed in the super-hot operating engine environment that is required to in part meet reduced fuel burn.”
Typo? High pressure turbine blades are definitely made from advanced materials!
The latter refers to materials on other parts, though I can see how it reads that it’s referring to the blades.
I think claes meant that the latter-mentioned parts are not lasting as long as intended, either.
Think RR fixed most issues on the T1000/7000. There was a RR notification that the first iteration of the new T1 blades were not good enough and they did a new iteration some time ago. You always get into a compromise of cost, cooling flow, performance, reparability and yield when developing T1 blades. With RR went to hard bearings and no tip shrouds in the hot section with small tip clearances the cost should go down if done right. The commercial engine blades are normally with a bit thicker skin that can take one or two stripping of its coatings at overhauls before scrapped, the military go thin with better cooling and replace with new at overhauls.
Think the meaning was hot running HPT blades and IPT blades. There was a vibration problem at max continuous thrust of the first stage IPC blades that also was solved.
Also, the IFRS accounting scandal of 10 years ago, where they were caught pulling vast profits forward on maintenance deals before doing the actual work. This was at the same time as buying back shares. Massive bribery fines. Either the new CEO is a maniac or he knows more than everyone else including the city, even then he’s still a manic for enlightening us.
Selling up to France or Germany is a massive political problem for the UK population. USA slightly better and the US government would be extremely foolish to loosen its incredible strategic position in this field. Possibly a tug of war between the US and EU.
The city has been desperate to break up and asset strip RR for a long time Anything but boring sensible management of a business with 50 year product cycles.
Given that the French govt only buys mil engines from Safran, and refused to let GE bid to acquire Safran a few years back, it would be a cold day in hell before the US Govt would let a French company acquire Rolls’ defense business in the US (and Allison).
GE never bidded to buy Safran
You are confused over the deal with Alstom a different but large french company
Safran buyout by GE ( or merger) would never pass muster both sides of Atlantic for anti-competitive reasons
But RR buys out Allison engines ?
If not for GE Safran would be a bit player (remember the Silvercrest Engine debacle?)
In fact its a natural and you have RR (for now), MTU, P&W, GE and 4-5 Japaense engine mfgs involved in the IAE-2500 as well as the PW GTF.
In fact with the CFM link up its a natural.
The RR ‘accounting scandal’ related to 2010 books where bribes etc paid to Indian groups and others . RR paid a £670m deferred prosecution agreement with the Serious Fraud Office (SFO) over bribery charges in the US and UK.
The auditor KPMG was also fined by UK regulator. Some serious transgressions included falsified documents by KPMG
I dont know what were ‘vast profits pulled forward’ you talk about?
@DoU
I believe it’s referring to this:
Reuters Feb 2014
-> “UK watchdog gets Rolls-Royce to restate accounts
Rolls-Royce had to restate its 2012 figures and adjust its results for 2013 before it reported on Thursday following advice from Britan’s accounting regulator, causing the engine maker to lop nearly 40 million pounds ($66 million) off last year’s pretax profits.
Analysts, many of whom quizzed Rolls-Royce’s management about the change in its accounting policy at its results meeting, said they thought the intervention of the Financial Reporting Council was unusual, and expressed concern that it added risk to the company’s future earnings.
and the extra bit you left out
“…causing the engine maker to lop nearly 40 million pounds ($66 million) off last year’s pretax profits.”
hardly ‘vast profits pulled forward’. Was some minor dispute over whether some money was research and development’ (FRC) or income (RR)
2015 RR accounts on IFRS 15
“changes result in adverse notional adjustments to civil aerospace revenues and profit in 2015 of £0.7 bn for original equipment sales and £0.2bn for aftermarket”
“approx £3.5bn of transition adjustments (before tax) would have been applied to reduce shareholder reserves”
I’m not an accountant so I will leave you to chew through it yourselves.I believe that they were buying back shares and paying high dividends at the time
@Duke pulled wrong FCF #s. Doubtful if that’s what an accountant would do.
Its just a new accounting standard which came into being in 2018.
Thats not 10 years back when they and their auditors were doing shady business that was illegal
hardly a scandal that the old accounting system allowed them , and many others to do this.
GE for example
‘NEW YORK (Reuters) – General Electric Co GE.N said on Friday it took a $4.24 billion equity charge and reduced earnings for the last two years by 30 cents a share, figures in line with expectations the company set earlier this year when it said it would comply with new accounting standards.’
https://www.reuters.com/article/us-ge-accounting-idUSKBN1HK2UL
$4.2 bill
What say you now car boot accountant ?
Its only bad when RR does it , as GE has got certain business media in their pocket, in return for exclusives !
Read a bit more carefully instead of just being unnecessarily aggressive.
We are talking about 2014/2015, so actually 9 years, sorry.
Check out the graphs for the 2015 spike in turnover, profit, dividends and share buy backs. Then you will understand.
I really can’t understand why companies do this (or why analysts are so slow to spot it. Its obviously going to come home and bite the bottom very quickly, particularly if the company has a long R&D cycle.
Just a couple of months ago senior management was talking about ” shining beacon of profitability”. They are willfully refusing to learn.
Grubbie , you arent reading it properly
There was two different circumstances – a decade back when RR and its auditors were fined and did a plea deal and the much later IFRS which came into effect in 2018 but was being adjusted for in 2015
GE also did IFRS massive adjustments at the same time. Obviously that revenue for both will flow later in the books rather than when it was first booked under older rules.
The car boot term was for our friend Pedro , so dont assume its for you and become passive aggressive
The comments system here is well known for time based placing rather than who you are replying too.
While $66M seems like a lot, and it’s not a sum you want an auditor to find, it’s not super material to a company that large. It’s likely due to accounting treatment changes that went into effect around that time, and reading it sounds like a misunderstanding of the “proper” treatment as opposed to a willful mistreatment but I don’t know the specifics.
Duke and Zoom
OK, I give up
Duke, why not just check out RR 2015 profit statement for yourself!
Thats where I (and Pedro presumably) got the above quotes from
Have RR found material solutions to the early wearing of the turbine blades to now meet their earlier time-on-wing on the 1000/7000/XWB or is it a continuing drag? Very disappointing. Can’t be easy for Airbus when selling widebodies if the sole engine choice is not up to spec.
Sorry… Bad/confusing grammar… Have RR found solutions to meet their originally promised time on wing (or is it just replacement with the same early-wearing parts?
Others may have more info, but I have heard nothing. You heard a flurry of reports on the Trent 900+ engines and vane issues.
The Trent 1000 and derivative issues were harmonics (after the corrosion of the blades debacle.
I think they solved that and while the harmonics affected the Trent 10 they got a fix during Covid.
But the wear out is a tough maybe impossible one if you don’t have the advanced materials to correct it with.
IIRC all major engine makers’ latest state-of-the-art engines suffer similar problem: reliability issue.
LNA:
-> ” * LEAP engines on the 737 and the competing Airbus A320neo family fall way short of on-wing targets. Shop visits, under warranty, add to GE’s cost basis. […]
“Before the grounding of the 737 MAX, GE’s joint venture partner, CFM International, faced issues with the CFM LEAP that powers the 737 MAX and shares the platform power on the A320neo family.
The LEAP’s predecessor, the CFM56, is widely regarded as perhaps the most reliable jet engine ever made. Its on-wing time is about 25,000 hours. The LEAP falls far short. With advanced materials and higher running temperatures to achieve target fuel reduction goals, the LEAP so far faces engine removals in about 6,000 hours cycles. Some of the advanced materials are showing premature wear and tear.
Engine repairs in these cases are done under warranties, a costly expense for CFM.
This would seem to have impacts on the whole RR Turbines business, not just Aero engines.
the Ship and Generator turbine engines are technologically dependent on the Aero engines driving the technology forwards (generally sharing the same HPC with power turbines optimized to extract more power at the cost of weight that would be unacceptable on an aero engine)
presumably the British government/EU will find a way to provide corporate welfare or facilitate a buyout by one of the other Euro turbine companies.
Pratt could theoretically be a buyer if RR eats the liability for current products. no way would they buy it with.
The ship engines are RB211 derivative and as long as you don’t drive them past the point of design, they would be as good as the on wing types.
Raytheon would not be allowed to buy RR on either side of the pond.
Its likely they would not want to.
they have no directly competing products, the joint company would be a more direct competitor to GE.
but I agree Raytheon is unlikely to be interested.
Wow. Delta kinda put all its widebody eggs (engines) in one RR basket. I always thought they should have held onto that original Northwest Dreamliner order.
NW selected RR for their 787 order.
They could have changed their minds!
RR is probably paying penalties if they are not meeting engine metrics.
But it sounds like they are running out of money. Then what? Delta will have 70 some new planes and RR as it stands today would not be able to continually service these not robust engines. Somebody’s going to have to takeover RR. Maybe it will have to go to bankruptcy first, and then someone buys it for nothing and assumes the responsibility of redesigning these two engines. How could this happen? Again, I am amazed at Delta who are such shrewd operators and now find themselves in this situation.
The T1000 and XWB’s will improve in steps. T1000 TEN was one step, new turbine hardware/coatings together with IPC hamonics fix another. Historically no widebody engine did more than 3500 cycles on wing if not grossly derated. The A340-300 CFM56-5C4 could do 35 000-40 000 hrs on wing on long range operations, do not think the GE90-115B out of Dubai can match that.
I’m not a propulsion person. It’s interesting to hear the specifics of this situation. I have to wonder if World wide large corporations have used a terrible criteria to hire leadership.
If it ever got there I would assume a GM style bankruptcy. A tie up with MTU or someone isn’t out of the cards but I’d say there’s a near zero chance the UK govt or aerospace industry allows them to fail and go under. RTX could spin off Pratt who could then possibly merge but they’re too strategically important to fail
I worry for the future of Rolls Royce under the new CEO. All involved with civilian aircraft, be it Boeing, airlines or engine manufacturers had to borrow big to survive.
The last thing that the highly skilled employees at RR need at this time is gloom and doom at board room level.
RR along with BAe is one of the few British aerospace success stories.
Unless you face and define the problem you are sunk, Boeing has that issue as well.
I do agree that doom part should be tempered (pun) with, this is the plan going forward to correct this.
That statement from the new CEO was ominous. As mentioned above, maybe he knows more than he’s letting on.
Ceo needs a lesson in PR. Such words are very corrosive and self fulfilling.
You run into much more ex. RR engineers than ex. Porsche engineers. Hence one can wonder how RR selects engineers, train them, pay them and treat them.
Wow. Is it 1972 and the L-1011 and RB211 all over again?
That is what I was thinking, phew
What an opportunity for Comac to come in to purchase RR. Being Chinese government back, money wouldn’t be a problem
UK government approving the sale would be.
US allowing RR aka Allison Engine to continue would also not happen let alone the new B-52 engines.
So no, China is not getting RR.
The high tech in the blades and the new ultra fan would be a problem for the British government. The new CEO is a bean counter who knows the cost of everything but intrinsic value of nothing
Rather like Mister Calhoun’s apparent role at Boeing, it seems.
I think Mr. Calhoun is more like Nero myself who was the happy arsonist.
I wonder if the options for RR would have been different without Brexit. The EU would have been highly motivated to support a European engine maker, by whatever means necessary.
On the other hand it has been said, with lots of justification, that UK always follows the worst parts of American culture. So share buy backs would be one instance. Another would be the abandonment of sufficient basic research, because it costs money and doesn’t appear on the balance sheet.
Perhaps they can regain some market share on the 787 program with a few big orders undecided on engine selection…Bagging Emirates would certainly be a step in the right direction for Rolls !!!!
Emirates bought into the RR nonsense about the Trent 900+ for their last A380 order and got bit.
No way they are going to repeat that debacle.
NZ and ANA have shifted to GE and anyone that can going forward is going to do the same.
RR is dead on the 787. That’s what the engine shops say.
It’s a GE world.
I’m surprised Lufthansa went with Rolls with their new build 787’s !!!
Considering the first 5 whitetails are GE powered !!!
I wonder how big of a deal it would be to throw the GE’s on the A330-900s?
I know it is a different plane, the 777X with a different GE engine, but essentially GE’s new Engine here has on its own set the 777X’s development back by years.
Boeing has set the 777X back years. Until they get approval for the FAA flight tests to start there is no urgency on the engines (more development time)
Airbus would have to break the exclusive deal on the A330NEO and no idea if that is possible and if it is what it would cost Airbus.
Tremendous complexity to these issues. All I can do is read and learn about it…
Airbus turned it down once, missing the trend for twins as they did stick with the A340.
I doubt that anyone would put that effort in a plan with a 30+ old tech that has barley 300 sales.
The deal might not be that big technically, but there`s no sense in it.
If, then it`s the question what can be done about the A350, that plane as a long future.
And honestly it can`t be in Airbus nor Boeings intrest to be soley dependend on GE as their engine maker.
RR out of business would change the world.
I guess this pushes the Ultrafan down the road a few more years.
I’m predicting a 2035 EIS for the re-engine of the 787/A350 at the earliest. Could be GE or PW geared engine by then.
Ironically one of the appeals of the UF is not having to drive the rest of the engine as hard and getting away with less exotic materials!
But P&W knows both the GTF and where the materials pay off and GE does not even have a prototype.
GE spouts the RISE monstrosity.
I don’t see Boeing doing a TBW and a Turboprop (which is what RISE is despite all the hullabaloo)
RISE looks like a good idea that’s always on the horizon. Cabin noise and the size of a strut for a 14′ blade will be a tough sell.
GE is rumored to be working on a GTF with a hotter core. Doesn’t GE own the company that makes the geared part of the P&W engine?
Avio engines in Italy , yes
But the designs are patented by Pratt including the critical shock resistance which is the hard part
@Ted
Ultrafan has already walked back a key feature of the engine, reverse thrust through blade rotation just as turboprops do. An engineering step too far I guess. Would have simplified mx big time.
Does RR have the money to complete Ultrafan? It seems to be its Ultrafan or bust. RR may have no choice but go all chips in on Ultrafan.
In regards to Rise, I trust RISE debuting as much as Ultrafan will. Remember GTF was a “forever” science project too.
Ultrafan – the engine without a plane?
Unless A or B decide to re-engine their A350 – B787?
I don`t know, but it seems RR is in a very difficult position with the Ultrafan, as B basically has announced they won`t do anything (or can`t do) and A is in the lead for now, so they don`t have to do anything.
Very good piece, Scott, thank you.
I did a lot of work with RR in my early days at Boeing on the 787 program (2005-2008), an excellent company to work with.
The Trent 1000 is their Achilles heel…. Too bad.
I wish them nothing but future success.
Airdoc:
The reports says that its not just the 1000, its through their entire engine offerings from the Trent 900 on.
They clearly all share the same basic lack of materials capability but that does not change the situation.
First you have to engineer the materials (ask China how hard that is) and then you have to mfg it for totally different size bits and pieces and heat paths though the various models.
Ok TW
I wasn’t looking for an argument. I know the workings of T1000 quite well. That’s all.
They should hire you….. you seem to know all the answers in this comment thread.
I want to see RR succeed just as I do Boeing and Airbus.
Cheers
😂
Safran/GE is doing well with the 50/50 joint venture CFM, and with Safran as a major partner on the GE9X.
PW, MTU and RR previously were partners on the V2500 engine, but RR sold their share. MTU and PW are partners on the GTF, and 1/3 of the GTF engines are manufactured by MTU in Munich.
Maybe MTU and PW could buy the aero-engine part of Rolls Royce and make it a joint venture. The RR gearbox for the ultrafan is also made in Germany. PW needs to get back in the widebody business.
This would at insure that GE/Safran have competition also in the widebody sector. It is crucial for Airbus that there are full stream ahead on the ultrafan.
I do not think GE would allow a 100% P&W takeover of RR. Nor would the UK or US governments. I would predict (IF something needed to get done) a 1/3 MTU, 1/3 P&W. 1/3 RR JV with Rolls selling 2/3 of company. A way to raise capital and pass the regulators.
I actually see this as a more likely scenario. RR may very well go down the same path that Bombardier made by focusing on regional/bijet class engines and also maintaining its military business. It might be in RR best interests to simply “sell off” the large commercial business to an interest buyer.
PW or GE can’t buy RR. Competition veto. For the right reason.
Safran has the $$. But CFM with GE is likely to lead to a veto too.
MTU is too small.
Soviets or Chinese will not he allowed.
It’s a lonely life when you rent per hour. It has to work.
There is a difference between selling the whole company and selling off a portion of the company.
The commercial engine business is boxed of narrowbody until at least 2035. While selling off the entire company might not be politically palatable…selling off a portion of it might get a more sympathetic response.
P&W and RR don’t compete in the large engine market.
What competition – 777X and A350 engines are single source anyway. Where there is a choice it would be on the 787, and the situation would remain much as it is today. Why the American regulators would be bothered I don’t see.
RR big problem is what to do with all their IP, payroll, design staff and facilities if no [Western] wide-body aircraft is going to be designed until the 2030s, and even then RR might not be on it. Fixing the Trent 1000/7000 for all that time won’t cut it.
They need a mythical band of Brexit-blind European dirigistes with deep pockets or the Chinese to give them something to do. The UK government’s ‘golden share’ is more about the nuclear, marine and military engines – they’re at least as broke and visionless as RR are and if Airbus’s are put together in China, why not their engines?
And absent those dirigistes, why would Europe be bothered? Those GE/RR engines they put on their Airbus aircraft are mostly immediately re-exported (because of the UK no longer being part of Europe).
My bet is the new CEO putting RR large engines on the market (minus a few high end capabilities perhaps) or closing it all down bar existing product lines and their technical support.
Last CEO I recollect that used the ‘burning platform’ was from Nokia.
We know what happened.
Gofforid
…”Wow. Is it 1972 and the L-1011 and RB211 all over again?…”
——
History seems to be a loop that starts again…
Unfortunately not a cheerful announcement
These are really tough times in the industry. Airbus seems not to have been sufficiently supportive of its “historic supplier” linked above all to widebody engines such as the A340, then exclusivity A340-500/-600 and A350XWB when the A320neo was launched in 2010.
If Airbus buys Rollce Royce Engines, would be a nice announcement but risky. When Boeing was evaluating the NMA in 2018-2919 RR had withdrawn from the competition.
If the Boeing NMA would have been launched even with a “low” sale of 600 units, there could have been 1,200 RR engines sold. This means that a launch of a new aircraft is quite imperative to keep the economy and industry running. But things are more complex and the reality is much more difficult.
These are the risks in the industry. But this does not indicate for the moment what will become of Rollce Royce Engines…
Ironically, the next engine refresh is likely to come from Boeing.
Here’s a question…if RR has a low minority position on the B787, is it even worth the investment if Boeing announces they want an engine refresh? Or does RR cut its losses on that installation?
If you are an airline, and you have the choice of RR or GE, after this glowing report, which one are you choosing?
After reading this, GE salespeople all over the world are buying tonight at the bar.
Toga Party
Airbus does not want this RR head ache right now, and I would hate to be the Airbus CEO trying to justify buying this money pit.
And on the Geopolitical side, buying a money pit that is not in the EU.
William,
I’m trying to understand your point of view…
The CSeries was a money pit before Airbus took control of the program from Bombardier in 2018, which is not in the European Union either…
If it went well for Rollce Royce so why merge?…
@Checklist
Doubt RR will be as cheap as the CS program
It’s true, but he was a money pit and a headache for Bombardier
The two major costs in developing a new aircraft program are:
1. Design through to certification.
2. Bringing manufacturing costs down, something that usually takes until after the 200’th airframe.
Airbus got 1. for free, 2. is still on-going and Airbus will have to pay full cost for that. But fact is they got a great program at a great cost. The A220 is less of a headache/risk for them than any new development program would have been.
The only real question is if it is the right aircraft for the next 15 years or more.
Yes. Airbus gets major parts now from Korea, China and US via Spirit ( who also have now the Northern Ireland A220 wing factory as well as the wing plants in Britain itself . Plus some plants in Canada fully owned by Airbus subsidiaries.
Airbus isnt EU centered anymore, and dont forget Italy ( in EU) went in big with Boeing on the 787 fuselage sections
Airbus is not going to buy RR anymore than Boeing is going to buy GE.
Even if it was possible, regulators got a say and you got all that odd stuff RR is into to dump. Ungh.
I think his (or his PR’s?) choice of words was poor, given the impression it would make in the media. But if he needs to scare employees, the UK Prime Minister & Chancellor (and I think he does) and Airbus/Boeing then maybe understandable.
Rolls have made significant play about SMR in recent times and how this could be a very major part of the business, so maybe he fears Sunak/PM and/or Hunt/Chancellor are insufficiently committed and need a kick up the backside. And maybe on timing for the new SSN work too.
But on the current bread and butter turbines I’m sure he also needs to emphasise to Sunak/Hunt when they consider moving budgets just how important GCAP and Aeralis work are; and to Airbus/German government (because of the major role of RR Deutschland in Ultrafan) & Boeing that they need space on a narrowbody wing to open up to get the civil business back in balance, especially Airbus with the risk of a US TO of Rolls putting all motors under US control and export regs.
One of Rolls Royce’s problems is that the UK Government isn’t a big spender on military aviation gas turbines. Pratt & Whitney and GE always have US defense work to fall back on when they screw up. We may see increases in moribund European defense expenditure, but it may be a long time before its turns into a 6th generation fighter.
Airbus already has a RR problem, their engines are dogs.
Trent 1000 / Ten is loosing vs. GEnX and did cost them money.
A330neo is depending on the Trent 7000, which is the same tech and subpar to GE.
Same is true for the A350- Trent XWB is the same tech as on A330neo/B787,
and the A35k is harmed by not having the better GE engine under its wing.
The GE9X will be another step ahead and again an exclusive Boeing engine.
I don’t know if RR can bring the advanced and ultrafan.
So RR has dog products, financial trouble and Airbus WBs are depending on em.
Options: Sell for a dollar to Pratt.
Try smth with MTU or Safran.
Hope on Airbus.
Or finally build a good product again that gives you an edge.
Thanks for your “Gesinnungsaufsatz”.
Lets continue in reality:
What I do wonder is how GE media protection works.
Even the discussion on AF066 losing a fan turned near instantly into an RR bashfest. AF had GP7000 on their A380.
Good point . Others have compared the ‘great news’ GE is always able to put out even when there is some problems.
‘very quiet’ is the response to the 777X GE9X engine issues (multiple times)
https://samchui.com/2022/12/01/boeing-777x-test-program-halted-after-ge9x-engine-issues/
and earlier
https://airwaysmag.com/boeing-777x-tests-halted-ge9x
Always some ‘incident’ but move on nothing to see here from Boeing and GE who dont want any clouds hanging over the expensive new baby
LOL, you doubt that GE build better engines these days?
Look at the sales, and just see.
RR had to do the TEN to even somehow be competetive, and did eat a bunch of issues with the Trent 1000 on the B787.
GE has a 60% market share on the B787.
And while Boeing could launch its new WBs with a new step in engine tech – B787 was a huge step of 10% that deleted the A380, and the B777x getting a improvment from the new GE9X.
Airbus just had to play keep up, as basically A330neo and A350XWB have B787 engine tech.
The situation for Airbus was not good and already discussed when the engine selection of A330neo/A350 was made. I remember a big Flight article about it.
Airbus with only RR on its WBs is an issue, as GE is building the better engines.
Rolls did the ‘Ten’ because they it was just a PIP with a new branding and included technology from its newer engine the Trent XWB
Every engine manufacturer does this . The final CF6 for example bears no comparison with its first example , with some major jumps in tech along the way
GE had to replace part of its GenX from the 787 as there was a string of failures too
https://www.industryweek.com/operations/quality/article/21972506/ge-engines-on-boeing-dreamliners-must-be-repaired-says-faa
and a different issue from the fan blades breaking
https://aerossurance.com/safety-management/b787-genx-fan-shaft-failure/
RR A350XWB engine was a big jump in tech compared to earlier Trent 1000 for the 787- which caught up with the ‘Ten’ variant . But as they are only 10 years apart thats expected
GE also had a litany of serious issues with its GenX series . It had big retsrictions placed on it by the FAA and they redesigned and replace one section for the early models.
Same for the GE9X, had to redesign a major part after it began flight tests on the 777X – contributing to the delays
the 9X includes some tech from the earlier GE Leap series , scaled up of course
https://www.ainonline.com/aviation-news/air-transport/2017-10-16/ge9x-uses-cfm-leaps-pioneering-cooling-air-flow-modulation
You seem to think that is a complete clean sheet each time and previous technology isnt included with the very latest when a new engine comes out.
Its a continuous process – as I said earlier the CF6 at the last versions didnt share much with its earliest versions. the GE90 had a huge jump when it was upgraded for the 777-300ER
Yes, a new engine model relies on decades of experience and development. Just 3D parts in CMC “Ceramic Metal Composites” I saw trail bits in 1987 and now around 2020 it matured into production and I assume must be developed even more for it to be successfully repairable. So you need 30-40 years of development work and funding of new technology to work commercially.
GE9X isnt ‘exclusive to Boeing’
It is the only offering on the 777X , which is understandable, but nothing to say it cant be on other planes like A350
The exclusive is a one way street
And yes its having serious problems despite the long development cycle, Boeing and GE just have a news blackout on ‘that problem’. Boeing seems to be getting all the blame for the 777X delays but when the only engine requires a compressor redesign at the flight test stage you have to wonder
Duke:
But the A350WXB is exclusive to Airbus as is the Trent 7000
The A350-900 is a RR exclusive , no such deal on the A350-1000, just that RR is the only choice as GE didnt have a new engine at the time.
Its what called ‘de-facto’ exclusivity when the A350K went into service
once the GE9X irons out its problems it could be a goer to propel sales ?
but Ultra fan isnt so far behind !
It is, in reality.
GE didn`t offer an engine for the A350XWB due to the A35K XWB being in the same thrust class as the B77W, where Boeing and GE have an exclusive agreement.
The 513kN GE90B was just a really good engine, and since it`s development GE is undoubtly the best turbofan maker in the world.
They wouldn`t offer a GEnX only for the -900, as they assumed the -800 got canceled and the stretch would sell well.
So now we have
A330neo and A350 soley powered by RR.
B787 has a choice, RR vs. GEnX – with GEnX winning.
B777x only has the GE9X.
It`s RR vs GE and Airbus vs. Boeing nowadays.
There’s literally zero risk of Rolls Royce failing, the fact they supply and maintain the nuclear reactors for the MOD and other turbine products says all you need to know, no RR, no submarines. The government would be obliged to bail them out, or they would be sold to BAE systems, which would technically be a government bailout too, as they would be loaned the money by the government.
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Rolls Royce will not fail. Unfortunately many of the comments on here regarding Rolls-Royce missing some serious points about “engine” industry. What Roll Royce does is a quite strategic “business”. This applies to GE and PW as well. Fall down of a such giant would cause serious troubles not just for UK or Airbus but all the aerospace industry. For example current issues that Boeing have had and is having put serious pressure on Airbus, because regardless of how good or bad Airbus does its job there will be serious doubt from aircraft operators. Please be awere there isn’t much people manufacture aircrafts. So basically UK cannot allow/afford RR to fail.
About the new CEO’s speech, I think it was very on purpose, maybe some words might be chosen better but overall it was a needed speech. That wasn’t just a speech to employers but to UK government and other companies within the industry. Especially, UK is failing on some areas, including aerospace industry on investment and “efficiency” matter. UK government seems is not aware of the situation. Some issues are beyond RR’s power.
New CEO made some good points on company’s performance compare to other companies within the industry. I think there are serious efficiency problems for RR. Future looking tough for RR but it is also bright, it can be bright. Key points will lead RR a bright future is the management not engineering in my opinion. RR is not having serious engineering issues at the moment. They fixed many issues on Trent 1000/7000. Probably Trent 1000 will not have more market share than GEnX. Because in some perspective gone is gone. Also TrentXWB is performing well, I don’t think project reached its design expectation in some aspects. But this not causing big troubles to airliners actually. I am 99 percent sure RR will be able to support TrentXWB. But keeping that 1 percent in mind is a good discipline and practice for aerospace industry. Material issues are big struggles for all engine manufacturers. Manufacturing engine components with advanced materials and with the same quality is so hard and expensive. But results are worth it.
Overall UltraFan is quite promising, they are doing some other improvements as well. But they need to sell first. Nuclear business of RR is also making improvement. They got two big military contract last year. One is B-52 engines, which will help RR a lot rather short term. Other one is new transport aircraft (FLRAA) for US Army, which is a long term project. Also, RR paid some dept due 2025 in advance with money coming from the sale of the ITP Aero.
At this point RR must go forward, and I think will go forward. A better RR will help the industry all together.
I heard that about Lehman Brothers, Mc Donnell Douglas, etc. etc.
YOu know the result.
There`s serious money involved for not that many jobs.
And there`s no guarantee RR will stay in business in irs actual composition.
I wonder if they have made any money from civil engines recently.
To bet on a bailout is never a good idea, RR better gets its game up.
I agree on RR not to bet on bailout but game up but companies like Lehman Brothers, McDonnell Douglas etc. are not as strategic as RR. They are not on the same category. You should ask why Airbus and Boeing don’t manufacture their own engine in order to understand how crucial RR is. Besides engineering there are many other aspects. Also, aerospace industry really differentiate itself from other industries. For example RR made Trent800, GE and PW together made GP7200 as a competitor. PW handles PW1000 series on its own but GE goes together with Safran on LEAP. On F-35, RR and GE offered F136, but PW was the winner with F135. This companies are all competitors at the end.
Many people doesn’t talk about being too strategic but I believe this might be the biggest reason behind failures of big aerospace companies. Because their employees know their company too big and too important to be fail. They now there will be a rescue. These ideas eventually lead very low efficiency and abuse of position. This is not a like pure evil behavior, I mean they don’t sit around table and making the plans of how do we create chaos and fill our pockets. A matter of company culture I would say. Other than RR, Boeing’s failures has to with this issue I think. Airbus had similar issues too, even GE and PW at some point.
It should be Trent 900, not 800. Sorry for mistake.
Does anyone know whether FOD is a leading cause of reduced engine life for RR engines? Or is it just wear-and-tear while operating in optimal conditions?
Trent 1000 deterioration was (1 vector) attributed to air pollution in Asia ( sulfur in the air vs sulfur in fuel ).
Lack of sufficient testing up front for sulfur compounds in the intake air. sulfur in fuel apparently was checked and found ok.
RR new CEO:
Expecting instant gratification ( profits next quarter ) in the jet engine business is an oxymoron. The guy hasn’t understood the business domain.
I’m with Woody that this is likely a lot about signaling to UK government to get on with funding programs, both SMR and military. UK government finances are tight and there have been cuts elsewhere.
I’m also with mhm about telling employees to pull their finger out and not take things for granted.
For a new CEO, it’s also not a bad strategy to put out all the bad news, so you don’t get blamed for others previous mistakes. If things turn out not to be so bad – and they probably will – then the new guy gets to take the credit for turning it round.
I agree that RR cannot cease to be a UK company (whether independent or part of BAE or something else).
Their Modular Nuclear Reactor work may become VERY important. Turbines for pumping oil, submarines, etc. are highly specialized and valuable. RR is a nationally critical asset.
The article on Rolls-Royce’s current challenges and the potential impact on Airbus is incredibly insightful and well-written. The author, Scott Hamilton, effectively breaks down complex aerospace issues into understandable information for someone like me at a 7th-grade reading level. The dire situation of Rolls-Royce’s engine group, as highlighted by the new CEO, Tufan Erginbilgic, adds a sense of urgency to the narrative. The article provides a clear overview of the root causes behind RR’s problems, from Trent 1000 issues to the impact of the COVID pandemic and the decision to exit the narrowbody market. The inclusion of Airbus’s response and the consideration of various scenarios adds depth to the analysis, leaving me with a comprehensive understanding of the challenges facing these industry giants. Overall, this piece not only educates but also engages the reader, making complex aerospace news accessible and interesting. Great job!