On the face of it, Rolls-Royce (RR.) investors might have been perturbed by the news that Airbus will end the production of its flagship jumbo A380 model in 2021, following airline Emirates’ decision to cut its order book of A380s from 162 to 123 aircraft. Emirates will receive 14 further A380s over the next two years, all powered by Rolls-Royce’s Trent 900 engines.
This means a reduction to an order agreed under a $9.2bn (£7.2bn) deal in 2015 to provide engines and aftercare for 50 Emirates A380s (revised up to 52 in 2016), which use four engines each. Rolls-Royce has already delivered the engines for 19 aircraft, which previously left 33 planes outstanding. The change to the order means that the engine manufacturer will now supply 56 engines for 14 aircraft instead. A spokesperson for the engine manufacturer declined to confirm whether this order change will affect the value of the 2015 deal.
The death of the A380 reflects an industry move from giant aircraft to smaller, more fuel-efficient jets. No problem for Rolls-Royce – the manufacturer is supplying Emirates with engines and aftercare for 40 Airbus A330neo and 30 A350 aircraft, both of which are twin-engined. Rolls-Royce declined to provide values for these orders.
