On the Record with:
RICHARD TURNER, GROUP MARKETING DIRECTOR, ROLLS ROYCE PLC

While Rolls-Royce "certainly doesn't give engines away" the fact that it's prepared to guarantee the customer an hourly operating cost over the life of the engine "is almost more important than the acquisition cost," according to group marketing director Richard Turner.

"That's a significant development in the market for engines as acquisition cost and operating costs merge into each other," he told Show News.

Today, fully 40% of Rolls-Royce's actual sales are in the aftermarket, and that proportion is expected to grow. "You are not forgiven a bad engine. It is a business that's finely focused on the technological achievement we can produce and at the right price. If you have an engine that's inferior it will not sell," said Turner.

Rolls-Royce started this year with a record $18.4 billion order book, prior year sales of $7.6 billion, and profit before tax up 11% from the year before at $576 million. Rolls-Royce continues to target double-digit earnings growth, Turner said. It has already won orders for more than $5.5 billion this year.

Civil aerospace sales were 19% higher than in 1998 at $4.25 billion after delivery of a record 1,080 engines (up from 911 the year before), and the company expects to set new records this year with 1,120, and next year at 1,250. Spares sales grew 9%.
Turner said a major Rolls-Royce strength is the breadth of its product line. The world's second-biggest producer of civil aero engines now has more than 25,000 engines in airline service, and 55,000 of all types on 30 current airframes in over 150 countries.

Much of its success is due to the popularity of the three-shaft Trent engine family, which ranges from 53,000 to 95,000 lbs thrust, and which continues to be the single best selling engine for both the Boeing 777 and the Airbus Industrie A330, with a 42% market share.

Rolls recently gained El Al as a new customer for the Trent 800, which in February passed one million hours in service.
Nine new Trent 700 customers from Europe, the Middle East, North America and Asia took delivery of their A330 aircraft during 1999.

The new Trent 500, the exclusive powerplant for the A340-500/-600 aircraft, now has some 20 hours in flight test, and will be certified at 60,000 lbs thrust. Orders and options for the Trent 500 now total more than $5 billion; production deliveries are scheduled to start in 2001 and will grow to more than 120 in 2002.

Rolls is also proposing the Trent 900 for the Airbus A3XX and the similar Trent 600 for the Boeing 747X and growth 767 airliners.

"Here at Farnborough we are talking about the potential of these two engines," said Turner. "The point we will stress is that the family architecture of the Trent gives an immense flexibility to play tunes on thrust, bypass ratios, and performance levels to suit twin or four-engine configurations. This gives us much more bang for the buck in our R&D spending."

As with its competitors, Rolls-Royce is leveraging its installed base of engines in service, although as a comparatively late starter that base is taking time to mirror its actual sales success and market share (which it estimates at 30%). Here, common technology across its engines is a decided advantage.

"It is incredible that we are currently retrofitting the RB211-524 on the Boeing 747-400 with a complete high-pressure system from the Trent 700," said Turner. "That means putting one that was designed 15 years later back into one that has been in service over 10 years. What other manufacturer can do that sort of thing?"

The upgrade improves fuel consumption by 2.5% and lowers temperatures considerably, leading to greater reliability, longer life and reduced operating costs.

While proposing engines for the hub-growth giant airliners, Rolls-Royce is also basking in the popularity of the hub-hopping Embraer 37 to 50 passenger regional jets. The firm and option order book for the (Allison) AE3007, sole powerplant for these aircraft, now stands at around 2,100 engines. They will likely rack up their 2-millionth flight hour this year.

By John Morris