Rolls-Royce scores massive $9.2bn engine deal for Emirates A380s

Aero engine giant Rolls Royce has secured the biggest order in its history, a $9.2bn deal to provide engines for 50 Airbus A380 super jumbos ordered by Emirates.

by Andrew Saunders
Last Updated: 12 Nov 2015

Rolls Royce says the deal, for 200 of its Trent 900 engines to power 50 Emirates A380 superjumbos, is the largest single order in the firm’s history. Crikey.

It’s not only the size of the order that is significant either. Emirates is one of the fastest growing and most successful long haul airlines in the world, and yet before the announcement of this new deal Rolls Royce had nothing in its order books from the airline.

That's an absence which must have hurt more than the pride of RR CEO John Rishton, whose personal stock will now be riding very high indeed. Not a bad way to start the weekend, is it?

Emirates is the largest operator of the A380, accounting for 140 of the total 317 orders for the aircraft. 80 of them are still to be delivered to the firm, 50 of which will now be powered by the Trent 900.

Although RR engines already power BA A380s amongst others, to date Emirates has exclusively used the GP7000 engine on its super jumbos, made by Engine Alliance, a JV between GE and Pratt & Whitney. So not only has RR broken a stranglehold by its two key rivals, it's also made a triumphant comeback - the Trent 900, as some of you may recall, was involved in an uncontained engine failure on a Qantas A380 back in 2010. Roll’s prompt action to fix the cause seems to have paid off in spades.

But what has caused Emirates chairman Tim Clark to make such a volte-face? After all, modern airline economics is all about streamlining, according to which principle running a fleet with two different types of engines adds complexity and cost.

Well for starters, aero engines these days are not sold as standalone units, boxed up and shipped to the customer like something you’d buy off eBay. Rather they are leased - airlines pay an agreed fee per hour of engine use, in return for which the makers handle all maintenance and repair requirements. So running two types of engine becomes rather less onerous than it used to be.

But there is more to it than that - the A380, despite being less than 10 years old, is being overtaken by newer, smaller, lighter and much more fuel-efficient aircraft like Boeing’s carbon fibre, twin engined 787 Dreamliner. These high-tech marvels may not have anything like the 500-plus seating capacity of the Superjumbo, but they do have comparable range and they use a lot less fuel.

So what Emirates would really like is a new version of the A380, equipped with up-to-date and more economical power plants. And guess what? Rolls-Royce just happens to have a suitable project engine, the XWB, to hand. Designed for the wide body A350, the fuel-sipping XWB could be adapted fairly readily for the Superjumbo and could yield double-digit fuel efficiency savings.

That would also have the advantage of being one in the eye for both RR’s key competitors, GE and Pratt & Whitney, in one go.

So it’s possible that the engines in this order could morph from Trent 900s to XWBs, if Emirates’ Clark can persuade Airbus to re-engine the A380.

That’s an expensive business which Airbus is reluctant to undertake on a relatively young aircraft, but with sales flagging it may yet have to knuckle under. Your biggest customer is always right…

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