Rolls-Royce has intensified calls for urgent government support to fund its planned re-entry into the narrow-body aircraft engine market, warning that tens of thousands of UK jobs could be lost if financial backing is not secured soon. The company’s chief executive, Tufan Erginbilgic, emphasized the need for a swift decision amid ongoing talks with the government, highlighting the strategic importance of the programme for UK advanced manufacturing and economic growth.
Speaking at the Farnborough Airshow, Erginbilgic described the narrow-body engine market, valued at approximately £1.6 trillion globally, as a critical opportunity for Rolls-Royce to diversify beyond its current focus on engines for long-haul aircraft. He pointed out that Airbus and Boeing, the world’s leading aircraft manufacturers, are expected to select engines for their next generation of narrow-body jets within the next two years. “Once they make an engine decision, you are either in or you are out,” he said, underscoring the time-sensitive nature of the company’s investment plans.
Rolls-Royce is seeking up to £200 million in government support as part of a broader £3 billion investment programme to develop the necessary technology and manufacturing capabilities, including the advanced UltraFan engine, which is seen as pivotal to competing with dominant players Pratt & Whitney and the joint venture between General Electric and Safran. Erginbilgic acknowledged that while the company prefers to manufacture the engines in the UK due to its historical roots and industrial base, alternative sites in the United States and Germany remain options, particularly given lower energy costs in those countries.
The CEO expressed cautious optimism about government backing under new Chancellor John Healey, a former Defence Secretary with experience working alongside Rolls-Royce. “He understands Rolls-Royce and our agenda and how much we contribute to the country,” Erginbilgic noted, though he reiterated the urgency by stating that funding decisions were needed “as soon as possible.”
Rolls-Royce’s request for taxpayer support has sparked debate, as the company reported underlying pre-tax profits of £3.35 billion last year and forecasts profits exceeding £5 billion annually by 2028. The company has committed to substantial share buybacks averaging up to £3 billion a year. Critics question the need for state aid given Rolls-Royce’s strong financial position, but Erginbilgic argued that competitors receive significant government subsidies for similar engine programmes, and that public backing would enable the creation of a transformative sub-industry, supporting up to 40,000 jobs in the UK supply chain.
The company has yet to hold direct talks with the new Prime Minister but signaled the topic’s importance for upcoming government discussions. As financial support negotiations continue, Rolls-Royce maintains that without a prompt and favorable decision, it could relocate the project overseas, potentially marking a significant shift in the UK’s aerospace manufacturing landscape.