Rolls-Royce has urged the UK Government to make a rapid decision on financial support for its planned return to the short-haul aircraft engine market, warning that the company could manufacture the engines elsewhere if an agreement is not reached.
Tufan Erginbilgic, chief executive of the Derby-based engineering group, said at the Farnborough International Airshow that a decision was needed “as soon as possible”.
Asked how serious the possibility of moving production abroad was, Erginbilgic said the company’s priority remained manufacturing in the UK but that other options were available.
“I have always said that my priority is to do it in the UK,” he said. “My priority is clear. But we have other options. We have had conversations elsewhere.”
The warning comes as Rolls-Royce considers re-entering the market for engines used on narrowbody aircraft after a 15-year absence. The sector is currently dominated by US-based Pratt & Whitney and a partnership between GE Aerospace and France’s Safran.
Rolls-Royce has focused on larger long-haul aircraft engines since 2011, supplying products for aircraft such as the Airbus A350 and Boeing 787. However, the short-haul market produces several times more aircraft each year, making it a major opportunity for manufacturers and suppliers.
The company believes its UltraFan technology could help it compete as Airbus and Boeing develop new aircraft designs expected to enter service during the 2030s.
The timing is critical because engine manufacturers must secure positions on new aircraft programmes well before production begins. Missing the next major design cycle could leave Rolls-Royce outside the market for many years.
Erginbilgic has said Rolls-Royce is prepared to invest up to £3 billion in the wider programme but wants government support of up to £200 million for industrialisation in Britain.
The request has attracted attention because Rolls-Royce reported an underlying pre-tax profit of £3.35 billion last year and expects annual profits to exceed £5 billion by 2028.
The company argues that rival manufacturers receive significant state support for research and technology programmes. Erginbilgic has said government backing would help create a new industrial base in Britain, potentially supporting tens of thousands of jobs across the aerospace supply chain.
The UK already has funding structures that could support the project. The Aerospace Technology Institute programme has been extended to 2035, with up to £2.3 billion available, while the Government’s Advanced Manufacturing Sector Plan identifies narrowbody aircraft engines as a growth priority.
Erginbilgic said he expected to speak with Prime Minister Andy Burnham and Chancellor John Healey soon.
“We know John Healey well from his time as defence secretary,” he said, adding that Rolls-Royce looked forward to working with him on plans to expand the British economy.
The decision could affect not only Rolls-Royce but also thousands of smaller engineering firms involved in manufacturing, testing and supplying aerospace components across the UK.
