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Rolls-Royce Wins $2 Billion Air China, Ethiopian Airlines Deals

By Sabine Pirone

Nov. 15 (Bloomberg) -- Rolls-Royce Plc, the world’s second- largest maker of aircraft engines, won orders worth almost $2 billion from Air China Ltd. and Ethiopian Airlines as it benefits from deliveries and demand for larger planes.

The Chinese flag carrier ordered Trent 700EP engines to power 20 Airbus A330 aircraft for a value of $1.5 billion, taking the airline’s fleet of Rolls-Royce powered A330s to 43 once the new planes, to be delivered from 2011, enter service, Rolls-Royce said in an e-mailed statement today. The contract includes maintenance, repair and overhaul. In China the Trent 700 has been chosen by nine customers to power 178 A330s.

The Ethiopian flag carrier ordered Trent XWB engines worth $480 million to power 12 Airbus A350s, London-based Rolls-Royce said in a separate statement today.

Delays to the Airbus A380 and Boeing Co.’s 787 programs have cut planned capacity in the widebody sector, generating firmer demand for existing widebody products, Rolls-Royce said July 30. The Trent 700 on the A330 has had strong demand, with more than 160 engines sold for the year so far. The company has more than 1,000 Trent 700 engines in service or on firm order.

“The engine does very well in a hot and high challenging environment and we are able to offer a superior pay load performance that provides our customers with a clear revenue earning advantage,” said Phil Harris, Rolls-Royce Senior Vice President for Customer Business, in an interview on Nov. 9.

Less Fuel

Rolls-Royce is able to include technological advances into earlier Trent models as new versions are developed, the company said. Recently Rolls-Royce launched the Trent 700 Enhanced Performance engine with a 1.3 percent improved fuel consumption, obtained largely by integrating technology developed for the Trent 1000 engine. This enhanced performance Trent 700 engine, competing with General Electric Co.’s SF6, was recently chosen also by Turkish Airlines and Virgin Atlantic Airways Ltd., the long-haul carrier controlled by billionaire Richard Branson.

According to Harris, there are also opportunities for the Trent 700 in the Mideast.

“In the Middle East some of our customers will, I believe, either firm up option positions or look at further aircraft,” Harris said ahead of the Dubai Air Show that starts today. “Eight out of the nine operators of the A330 have Trent 700 power,” with almost all also taking the support package.

Gulf Air selected Trent 700s for 20 additional A330s at Paris Air Show 2009. Emirates operates 29 A330 powered by Trent 700 engines, while Etihad Airways selected the Trent 700 for a total of 24 A330s.

Gulf Air

Following the order by the Ethiopian flag carrier, Rolls- Royce has sold more than 1,000 XWB engines, its best-selling engine.

“Considering we are still three and a half years from entering into service, this is a very strong position to be in,” Harris said. “The A350 is addressing a slightly larger aircraft size with slightly longer range capability, so the success of the A350 XWB does not eclipse the A330.” The Trent XWB is the only engine currently available on the A350 aircraft.

To contact the reporter on this story: Sabine Pirone in London at spirone@bloomberg.net

Last Updated: November 14, 2009 15:00 EST

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