Rolls-Royce large civil engine flying hours are gradually increasing but still remain about one-third down on pre-crisis levels, the company has disclosed.
The flying-hours figure reached 65% of 2019 levels in the four months to the end of October, and 62% for the year so far.
Rolls-Royce says this is the result of “uneven recovery” with a stronger rebound in the US and European markets than in Asia, and China in particular.
Engine deliveries and shop visits have been higher than last year, but at the lower end of the expected range.
But Rolls-Royce is planning higher volumes of large spare engine sales this year, and the next few years, compared with the normal level of 10-15% of original equipment deliveries.
The company says this will expand the spare-engine pool to “underpin fleet health and improve resilience”.
These spare engine sales, and the improvement in flying hours, will drive “strong cash conversion”, it adds, and Rolls-Royce forecasts that operational cash will “comfortably exceed” its operating profit in the medium term.
Rolls-Royce also states that its long-term service agreement margins are being supported by inflation-linked customer contracts.
Outgoing chief executive Warren East highlights the recent completion of Rolls-Royce’s divestment of Spanish firm ITP Aero, which has enabled the company to repay £2 billion of debt.
“This marks a milestone recovery in the strength of our balance sheet,” and a clear step on our path back to investment grade in the medium term,” he says.
East adds that the improving civil aerospace sector, along with the performance of other Rolls-Royce businesses, gives the company “confidence in the future”.
Rolls-Royce is also an aerospace partner in six projects recently approved for funding as part of the European Union’s Clean Aviation initiative for decarbonisation.
