(Bloomberg) -- Rolls-Royce Holdings Plc is confident it can revive demand for its struggling Trent 1000 engine that powers Boeing Co.’s 787 airliner because some upgrades will improve durability and make the model more competitive.
The two fixes, which the UK engine maker previously announced, will help create new orders for the engine, Chief Executive Officer Tufan Erginbilgic said in an interview with Bloomberg’s Francine Lacqua.
“By the end of next year, we will have a very competitive product and then we are going to push that product because it’s a very good product. But durability has been the issue,” Erginbilgic said in the interview in London.
Asked about how many new orders the upgrades to the engine will generate, the executive said it was too early to say but the company was “optimistic”.
The model, one of two options available for Boeing’s popular widebody jet, has seen its market share slip in recent years as airlines abandoned the UK variant for General Electric Co.’s rival GEnx powerplant. The GEnx now sits on about two-thirds of all 787s in service, and Rolls-Royce is enginemaker of choice on just 52 unfilled 787 orders. That compares with 574 for the GEnx.
The British manufacturer has come under fire from customers British Airways and Virgin Atlantic after both airlines said they’d be forced to scrap some routes next summer due to a shortage of aircraft caused by 787 maintenance. Virgin said it would delay the restart of services to Tel Aviv and a new service to Ghana, while BA will remove Dallas and Kuwait from its schedule.
Virgin expects the issues with the Trent 1000 engine to persist for the whole of 2025, CEO Shai Weiss told the Airlines UK conference in London on Monday, adding that the matter is for Rolls-Royce to fix.
Under Erginbilgic, Rolls-Royce has focused on unwinding unprofitable engine contracts and showing greater fiscal discipline, although that has sometimes put its relationship with airlines and planemaker Airbus SE under strain. The company aims to invest more than £1 billion to improve its engines that power large commercial aircraft, including the 787 and rival Airbus A350 model.
As part of the upgrades to the Trent 1000, Rolls-Royce envisages a two-stage plan that will see the initial package available early next year and the second by the end of 2025. Combined, the measures will make the engine’s so-called time on wing — or the intervals between maintenance cycles — “really competitive,” Erginbilgic said.
The Trent 1000 had previously been plagued by technical issues, which forced the engine maker to taken billions of pounds in charges.
Erginbilgic took over at the start of 2023. In his first year, he presided over the best stock return of any UK listed company. So far this year, the stock has gained about 80%, putting it on track to be the second-best performer on the FTSE 100 index.
Click here to watch the full interview with Erginbilgic.
--With assistance from Kate Duffy.
(Updates with comment from Virgin Atlantic CEO in seventh paragraph)
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