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FinanceRolls-Royce CEO urges UK government to decide soon on narrowbody engine subsidy
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Rolls-Royce CEO Tufan Erginbilgic stated at the Farnborough Airshow that the company urgently needs a decision from the UK government on whether to provide a subsidy for developing a new narrowbody aircraft engine. The engine would allow Rolls-Royce to re-enter the single-aisle market, a sector it has been locked out of for 15 years. Erginbilgic confirmed talks are also underway with Germany and the US, but prefers the UK due to the company's origin. He expressed hope after the UK's recent political change, noting that new finance minister John Healey understands Rolls-Royce's contributions. The CEO said if the government backs the project and the engine secures a position on a narrowbody airframe, it could create 40,000 British jobs. Boeing and Airbus are expected to decide on engines for new jets in two years, adding urgency to the subsidy decision.
Source report
By Sarah Young FARNBOROUGH, England, July 21 (Reuters) — Britain's Rolls-Royce requires an imminent decision from the UK government on whether it will provide a subsidy to help the engineering company develop a new engine for narrowbody aircraft, its CEO said.
The company wants Britain to co-invest in the new engine, which would allow Rolls-Royce to return to the single-aisle airframe sector — potentially a major win for the UK in terms of advanced manufacturing, jobs, and exports.
"We would like to do it in the UK because of our origin. Do we have other options? Yes," CEO Tufan Erginbilgic told reporters at the Farnborough Airshow on Tuesday.
Erginbilgic confirmed that conversations were also taking place with other governments, with Germany and the United States said to be interested.
Hopeful After UK Political Change
Boeing and Airbus will make decisions on engines for their new jets in two years, Erginbilgic said, meaning Rolls-Royce needs a decision on any subsidy as soon as possible.
He declined to comment on the level of investment Rolls-Royce is seeking, adding that talks with Britain were "progressing" — but that was before the country's latest leadership change. Andy Burnham on Monday became the seventh prime minister in 10 years.
"Obviously there are some different people, but the same government so in that sense, I'm hopeful," Erginbilgic said. He added that he was positive about Burnham's choice for finance minister, John Healey, who formerly held the defence brief.
"He understands Rolls-Royce and our agenda and how much we contribute to the country," the CEO said of Healey.
Rolls-Royce has been locked out of the narrowbody market for the last 15 years — a much larger market than the widebody market on which it is currently focused. The company has been developing the next-generation UltraFan with the aim of re-entering the segment.
Erginbilgic said that if the government backed the project and Rolls-Royce's new engine gained a position on a narrowbody airframe, it would create 40,000 British jobs.
The company is also seeking a manufacturing partnership for the new engine.
(Reporting by Sarah Young; Editing by Paul Sandle and William Maclean)
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Rolls-Royce CEO Urges UK Government to Decide Soon on Narrowbody Engine Subsidy