Rolls-Royce rallies on China engine order

 
City A.M. Reporter
Engineering firm Rolls-Royce has today won a $1.8bn (£1.13bn) order from Air China to supply engines for 20 of its new aircraft.

The world's second-largest maker of aircraft engines will provide Trent XWB engines for 10 Airbus A350 XWB aircraft and Trent 700 engines for 10 Airbus A330 planes.

Those are different engines to the Trent 900, one of which failed on a Qantas Airbus A380 flight this month, forcing the aircraft to make an emergency landing.

Shares in Rolls-Royce have declined by 10 per cent since hitting a record high at the start of November, three days before the incident.

They were trading at 590.5p at 1821 GMT, down from a high of 600p.

The Trent XWB is the only engine that can power the Airbus A350 XWB planes, making the order an inevitable follow-on from the purchase of such an aircraft.

Still, the company will hope today's order will ease some of the negative publicity surrounding it following criticism by Qantas and others over its handling of the QF32 flight.

It is under pressure to clarify how many Airbus A380 planes must have their engines replaced and how long that will take.

“Bearing in mind confidence is at a low then any good news has to be positive for the price.

“We should welcome it for what it is, a very large order for a well-proven set of engines,” said BGC analyst Howard Wheeldon.

“In troubled times such as this, it's super news and it's great news for the UK in terms of exports as well,” he added.

Rolls-Royce is already well established in China, where it has a 56 per cent share of the market for large civil aero-engines.