Rolls-Royce Could Look at Acquisitions

Rolls-Royce is looking at joint ventures and acquisitions to broaden its presence in the corporate market, according to Ian Aitken, president of the company's new corporate aircraft division based in Chantilly, Va. "Part of the reason that the team was formed was to look at the total business, and that included mergers and acquisitions," says Aitken, although he declines to identify specific opportunities.

The company's strategy is to have "one engine for all market applications," says Aitken. Currently, Rolls-Royce dominates the heavy end of the market, with the Tay and BR715; competes in the midsize market with the AE 3007; and is represented in light jets by a share of the Williams FJ44 program, excluding the new FJ44-3.

Corporate engines are more important than ever to the UK engine-maker. "It's now bigger than the fighter engine market," Aitken comments. Rolls-Royce will deliver 290 corporate jet engines this year. With a claimed 32% of the business by value, Rolls-Royce says it is the biggest single supplier of engines for corporate airplanes.

Rolls-Royce is projecting a $56 billion market for corporate jets by 2021, a $4 billion increase over last year's prediction. The increase is due to a greater proportion of large midsize and heavy business jets, driven in part by fractional ownership. Another trend is a growing replacement market as more airplanes reach retirement age: 40% of the 11,000 aircraft in service today will be retired and replaced by 2021.