Rolls-Royce higher after Airbus ramps up production in expectation of aerospace recovery


Rolls-Royce Holdings PLC (LON:RR.), the aerospace engineer, has opened the doors on a new jet engine test-bed in Derby that cost £90mln to develop.

Rolls-Royce claims that the test-bed, which took three years to build, is the largest and most technologically advanced test-bed in the world.

The test-bed will be used to put current engines such as the Trent XWB and Trent 1000 through their paces but will also test the next generation of gas-turbine engines; these engines are based on Rolls-Royce’s UltraFan demonstrator technology and will use sustainable aviation fuels (SAFs) – the aerospace industry’s to (at least partially) clean up its environmental act.

UltraFan is a scalable jet engine design is expected to generate fuel-efficiency improvements of 25% compared to the Rolls-Royce Trent engines. The UltraFan project is being backed by aeroplane manufacturing giant Airbus.

“As the new global hub of our testing capability, it will support the next stage of our UltraFan programme as we begin ground testing the first demonstrator in 2022,” Rolls-Royce chief executive Warren East told reporters.

“This incredible piece of infrastructure is a very visible sign of our commitment to this site and secures the future of Derby as the home of large engine development, continuing a history that began in the late 1960s with the RB211,” East said.

In other aerospace news, European aeroplane maker Airbus has announced it plans to crank up production in expectation of a recovery in air traffic levels to pre-pandemic levels by 2025.

Airbus said it intends to bump up the output of its A320neo by 12.5% to 45 units a month by the end of this year. Airbus hopes to increase output to 64 aeroplanes a month by the second quarter of 2023.

Airbus is budgeting for the commercial aircraft market to recover to pre-pandemic levels, perhaps as early as 2023 but hopefully no later than 2025.

If Airbus is correct then that would give a lift to Rolls-Royce, which provides engines to Airbus.

Shares in Rolls-Royce were trading 5.4% higher at 108.58p in afternoon trading.

European giant plane manufacturers, Airbus has outlined its expectation of production increase as the aviation industry recovers from the coronavirus pandemic which saw it falling into a halt globally.

— The Aviator Africa (@TheAviatorAfric) May 27, 2021



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