Backlog is not a bubble: Rolls-Royce chief

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Rolls-Royce chief executive John Rishton is confident that the backlog of new aircraft on order does not amount to a bubble, and that there is genuine need for the capacity.

The manufacturer is forecasting deliveries of some 4,000 long-haul aircraft in the decade to 2023, double the figure for the last 10 years.

Speaking to investors at a briefing, Rishton said the scale of deliveries was “significant”.

“I would suggest this is not a bubble,” he says. “It’s driven by real demand.”

Rishton says that airlines are having to cope with a “huge” increase in fuel expenditure, which has replaced labour as carriers’ greatest cost item.

He adds that emerging markets, particularly China, are creating an enormous demand for travel.

“I don’t think it’s a bubble. I think it’s real,” he says.

Rolls-Royce is expecting to deliver 4,000 Trent engines over the period to 2023. Rishton says the Trent XWB – the only engine available on the Airbus A350 – will account for 34% of the company’s installed thrust base by this point, with the Trent 700 for the A330 making up 24% and the Boeing 787’s Trent 1000 at 17%.

He says the A350 programme is “going really, really well”. The A330 is still selling, he adds, despite predictions that production would end with the emergence of the 787.

Rishton acknowledges that the company is less optimistic “at the moment” about sales for the A380.

Rolls-Royce intends to return to the single-aisle market, he adds, following its decision to allocate resources to the higher-thrust Trent XWB, 900 and 1000 rather than an engine for the Airbus A320neo.

“If I look at the narrowbody market, it’s huge, significant growth,” says Rishton. “We’re going to get back in this market. But it isn’t an issue for today or tomorrow.”

Rishton says the company does not expect a new single-aisle jet to be developed before the mid-2020s. But he says the sector is a “great volume market”, and adds that it would give the manufacturer a broader engine range. “It’s a good place to be,” he says. “It’s what we do, why wouldn’t we want to be in that market?”