Rolls-Royce jet engines are on display at the Rolls-Royce Aircraft Jet Engine Production and Repair Factory in Blankenfeld, near Berlin, Germany on February 28, 2023.
Omar Messinger | Getty Images News | Getty Images
Shares in Rolls-Royce hit 248 pence (308 cents) in Friday trading and are up about 190% in a year, hitting a 52-week high.
The British aerospace and defense company’s financial results have turned around, thanks to a turnaround plan led by Chief Executive Tufan Erginbilgic, who took over in January. The surge in its shares suggests the market has dismissed Emirates President Tim Clark’s criticism of its jet engines at this week’s Dubai Air Show.
These comments refer to the Rolls-Royce Trent XWB-84 engines used on the Airbus A350-900 passenger aircraft. Speaking to reporters at the Dubai show, Clark downplayed the cost and maintenance required for the engines.
“Obviously, the engine isn’t working the way we wanted it to, so we won’t order it until it’s finished,” he said. “If the engine is doing what we want it to do … then it will go back into the evaluation mix for our fleet plan.” Otherwise, Clark said Emirates would order 35 to 50 aircraft.
He also called the engine “defective” and said “Emirates’ utilization rates are very high… You don’t want to sit on the ground or have it break down on a regular basis, and beyond that the damage to the brand and the damage to reputation would be huge, Especially if you have a breakdown out in the field and you have nowhere to go. So we’re not going to buy a defective aircraft.”
Rolls-Royce later rebutted the criticism, saying in a statement that the A350-900’s XWB-84 engine “is the best engine available when you consider efficiency, durability and reliability.”
Evan Macdonald, chief customer officer of Rolls-Royce Civil Aviation, told Dubai-based newspaper The Nation that the aerospace engineering company and Emirates “are aligned on this issue and we will continue to work hard to resolve it.” question”.
Emirates confirmed on Thursday that Airbus had received a lower-than-expected order for 15 A350-900 jets, which it said was worth $6 billion.
The British engine maker, which also produces engines for the Boeing 787, has undergone multiple overhauls over the past decade. Erginbilgic announced in October that it would cut 2,500 jobs globally to “eliminate duplication and improve cost efficiencies.”
The turnaround plan means Rolls-Royce will also focus on its “core” capabilities, integrating engineering and safety departments into a single team to improve efficiency and standardization.
“The proposals include the creation of a new enterprise-wide procurement and supplier management organization to support the consolidation of group spend, leverage scale and develop consistent best-in-class standards,” the company said in an October statement.
The company’s financial performance for the August half-year profit already showed a huge recovery: underlying operating profit for the period was 673 million pounds ($837 million), more than five times last year’s level.
According to Reuters, analysts at Deutsche Bank confirmed the bank’s buy rating on Rolls-Royce and raised its target price to 310 pence from 210 pence.
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