Q:Do you see Asia's current economic problems as a six-month blip, or are its effects likely to stretch for several years?
A:We still have a firm belief that the underlying growth in this part of the world will come back so, in that sense, we would see today's situation as temporary, but probably more than a blip. The issue on the economy is very serious.
Q:What effect has the situation had on Rolls-Royce so far?
A:We've had no cancellations at all. Some of our customers are talking to Boeing in particular about deferrals, particularly of options rather than firm orders and to that extent we are probably in the middle as far as exposure to Asian airlines is concerned. We have nothing like as much as Pratt & Whitney, slightly more than GE. I'm glad to say our customers are generally weathering the storm very well and people like Singapore Airlines are much less affected - at the moment, at least - than people such as Korean Air Lines.
Q:Are you anticipating further economic storms in the region?
A:If I could give you a 100% answer to that, I wouldn't be in this job, I'd be in the currency speculation business. I don't think you can make a prognosis to that extent. Whether things will get worse before they get better is anybody's guess, but I think the International Monetary Fund's actions in particular in stabilising have been very important and in the past few weeks we've seen some return to normality.
Q:What will be your main theme at Asian Aerospace?
A:We see a growing business base in the region and will continue to make investments to support that. In particular, to continue developments in putting additional repair, overhaul and after-sales support into the region, to make sure our customers have the service they require on their doorsteps, rather than relying on the US or the UK.
Q:Any announcements likely during the show on that front?
A:There may be. It depends on some negotiations at the moment.
Q:What have given you greatest pleasure and the greatest disappointment over the past year?
A:The biggest pleasure is that the Trent family continues to find favour with customers and manufacturers. We're very pleased with the market share we obtained for wide-bodied aircraft last year about 40%. The biggest disappointment? Losing any of those customers.
Q:There have been reports that Rolls-Royce has reached an impasse with Kawasaki/IHI on taking a risk-sharing stake in the Trent. What's the state of play?
A:Firstly, they already have a stake in the Trent. The issue being discussed is the Trent 500 and 8104. "Impasse" has not been a word used by Rolls-Royce. Discussions are ongoing. The programmes are running. It's entirely up to our Japanese customers to judge when the time is right to make an additional commitment.
Q:Are you talking to other potential partners and is there a minimum stake they would have to take?
A:Yes, we are engaged in a number of discussions. There's no hard limit fixed. It depends very much on the particular core skills of the partner.
Q:How significant to you is the joint venture with American Airlines for engine repairs at Fort Worth? Do you foresee more such joint ventures?
A:Yes, we do. I think there's a growing tendency for many airlines, particularly new ones, to contract out their repair and overhaul activities, but you have a number of existing ones who have made significant investments in organic repair and overhaul, so you have the two things coming together.
Q:You began testing the RB211-524 G/H-T late last year; what have been the results so far?
A:We're very close to completing certification; it should happen just around the time of Asian Aerospace. The certification flying was completed just before Christmas on a British Airways aircraft which was then returned to the old standard. We have firm orders from Cargolux, South African Airways and Cathay Pacific for retrofit programmes and are in dialogue with British Airways and others.
Q:How much work has Rolls-Royce been putting into chasing down examples of the computer 'Millennium Bug' which it is feared will create major problems in 2000?
A:We're greatly aided by the fact that we have a partner in EDS, which is one of the world's leading experts in the millennium problem, as they are a very large data processing company. Together, we've had a rigorous programme of reviewing our operating systems both on the engines - which were, in that sense, not the biggest issue - and in the company's operating systems. We've had this programme running for four years now. As we've introduced new systems, we've made sure they are compliant and have, we think, a very good handle on the rest.
Q:Would you like to be flying on the night of 31 December, 1999?
A:Quite frankly, I would not be concerned. I think everybody is so well aware of the issues now that there will be exhaustive testing between now and then to make sure that the bugs have been well and truly taken out. It will probably turn out to be one of the safest days to fly.
Source: Flight Daily News
