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Rolls-Royce a faltering proposition

Rolls-Royce a faltering proposition

Jet engine maker Rolls-Royce (RR.) has endured a torrid first six months to the year as Covid-19 has brought the civil aerospace industry to its knees. Its ‘power-by-the-hour’ business model – whereby engines are sold at a loss and earn revenue according to how long they spend up in the air – has been upended. With airlines around the world grounding their fleets, a July trading update revealed engine flying hours collapsed by 50 per cent in the first half of the year. We are therefore braced for some ugly numbers when its interim results are released on 27 August, with some hefty impairment charges likely to appear.

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