Rolls-Royce’s civil aerospace business turned in a 4% increase in underlying profit, to £272 million ($543 million), over the first half of the year as increased deliveries of Airbus A320 engines and higher aftermarket sales pushed up revenues.
While Rolls-Royce says the civil aviation industry will “not be immune” to the effects of high oil prices, constraints on financing and the economic downturn, it says the impact on its civil aerospace business “should be mitigated” by several aspects of its activity.
It claims there is a “resilient” widebody and corporate market, particularly because Airbus A380 and Boeing 787 delays have reduced planning capacity by around 300 widebody aircraft over the next three years, firming demand for current widebody products.
Rolls-Royce adds that the “relative youth and fuel efficiency” of the aircraft to which its engines are fitted means they are “less likely” to be grounded than older types.
“The majority of announced retirements to date have been narrowbody aircraft or aircraft over 20 years old,” it says, pointing out that its narrowbody market exposure amounts to less than 10% of the current and older fleets.
Rolls-Royce’s underlying aerospace sales were up by 4.5% to £2.1 billion for the six months to 30 June, and the division took over £8 billion in new orders to bring the order backlog to £42.1 billion.
Sales were driven by deliveries of International Aero Engines V2500 powerplants, a 10% rise in aftermarket revenues, and growth in the corporate sector. “These trends are expected to continue for the full year,” says the company.
The division delivered 462 engines compared with 421 in the first half of 2007. Trent deliveries for widebody aircraft were slightly lower in the first half but Rolls-Royce says it expects these to “increase strongly” in the second half.
Its Trent engine family gained orders for another 360 powerplants over the first six months, worth £4.5 billion, and the manufacturer adds that its profit over the period has been achieved despite a poor US dollar exchange rate, restructuring costs and higher unit costs.
Source: Air Transport Intelligence news
Source: Flight International
