Chris Jasper/LONDON

Rolls-Royce predicts that the rate of new aero-engine orders will slow this year, while claiming that the increased market share it has won in recent years will allow it to sustain its current high level of powerplant deliveries.

The UK manufacturer adds that successful company restructuring, product expansion and market diversification mean that it is well placed to ride out the worst of the Asian downturn.

The impact of these moves is reflected in R-R's financial performance, with the company recording a pre-tax profit of £325 million ($520 million) last year - up 18% - on sales from continuing operations of £4,326 million, up 10%.

Chief executive John Rose says that while the raw statistics are important, R-R is especially pleased to have achieved its targets against a background of restructuring and sell-off. "We sold £700 million of turnover over the last three years in an effort to improve the focus of our business, but we still managed to grow turnover by 10% last year," he says. "So we have managed to grow organically."

Rose adds that R-R's diversification both in terms of the markets covered and products mean that it is better placed to absorb market vagaries. "We've spread ourselves across the civil and defence aerospace and energy markets, we've put in place a global aftermarket network through joint ventures and we now supply engines for more than 30 airframes when in 1987 we catered for just six.

"It's true that we see orders going down, but the strategy we've followed means we should be able to manage the risk in a downturn. And we think we can sustain our high level of deliveries because our market share is larger."

Rose highlights the regional jet engine market as one area in which he expects demand to remain high even in a downturn, and says "it perhaps follows a slightly different cycle". The drive towards turboprop replacement is itself fuelling demand by opening up new opportunities.

Rose does not expect to see significant consolidation in the aero-engine industry over the next year, pointing out that consolidation has already happened programme-by-programme, with the big three manufacturers actually going head to head on only four airliner types.

However, he concedes that there "may be some room for tidying up around the edges", and also further joint ventures in the aftermarket sector of the business.

Source: Flight International