The UK Government and Rolls-Royce (LSE: RR., ADR: RYCEY) have announced plans for a joint 10-year, £2.5bn research and technology programme to develop cutting-edge gas turbine technologies for civil and defence aerospace, unlocking the biggest opportunity to transform advanced manufacturing across the UK for a generation.
The programme would advance more efficient and lower-emission jet engine technologies – as Rolls-Royce looks to secure a UK engine position on the next generation of commercial aircraft in the fast growing, high-volume, ‘narrowbody’ market segment – including through an engine demonstrator project. It would also sustain vital development and testing capabilities, strengthening national resilience by supporting the UK’s critical sovereign capabilities in defence aerospace.
New narrowbody aircraft – also known as ‘single-aisle’ planes – are expected to enter commercial service in the mid-to-late 2030s, with manufacturers selecting engine partners over the next few years, in anticipation of potential aircraft launches around the turn of the decade.
The UK Government’s Industrial Strategy highlights the narrowbody market as the single biggest growth opportunity in aerospace over the next 50 years. Securing a UK engine position on these aircraft could lead to billions more being invested in the UK over subsequent decades, adding £120 billion to the UK economy over the lifetime of the programme. Success could create tens of thousands of highly skilled jobs at Rolls-Royce and across the country’s advanced manufacturing supply chain, and lead to the construction of new globally competitive advanced manufacturing facilities and factories.
Tufan Erginbilgic, CEO, Rolls-Royce, said:
This is a landmark moment for the UK’s aerospace industry. This is a once-in-a-generation opportunity to lay the foundations for decades of sustainable economic growth across the UK, creating high-value jobs and transforming the country’s advanced manufacturing supply chain. Aerospace is a growing and globally attractive market and this programme with Government is vital to enable the UK to compete. Working together, we can also sustain the nation’s capability to power military aircraft and secure its position as one of only two countries that can design, develop, make and service the jet engines that power the world’s commercial airliners.”
Delivering the initial stages of the plan, which is subject to a final agreement being reached, will support 3,300 UK jobs at Rolls-Royce and supply chain partners by the end of 2029. Securing a UK engine position on new narrowbody aircraft would create tens of thousands more. As a result, Rolls-Royce and the Government will work together on a jobs and skills development plan to provide the necessary pipeline of future talent. The investment plan will also benefit the UK’s academic institutions, with university departments carrying out new research.
The transformation of Rolls-Royce over the past three years has made the company a stronger partner for the UK Government, which has a strong track record of supporting aerospace, and the company expects to invest significantly more than the Government across the narrowbody programme. Rolls-Royce is one of only three companies in the world that can offer the end-to-end capabilities needed to design, manufacture and service such an engine.
If Rolls-Royce’s narrowbody engine technologies are chosen by airframers, its stated ambition is to re-enter the market in partnership. It will select sites in the UK for new state of the art facilities for the assembly and test of the new engine and increase its advanced manufacturing capacity to make many of the high-tech components required. These include high pressure turbine blades – which are at the heart of a jet engine – and advanced composite fan blades. New factories will also need to be built by the UK supply chain as Rolls-Royce and Government work together to maximise the opportunity for homegrown suppliers.
