Reuters reported today that Rolls-Royce announced two new engines; the “Advance” which is expected to be 6% more fuel efficient than the Trent XWB (Rolls’ latest engine) and the “UltaFan” which is expected to be 10% more fuel efficient than the Trent XWB.

Given the disruption of spiking fuel costs, the airlines have shown their interest in re-engined aircraft. The MAX and neo speak for themselves.  The ongoing rumble of news around an A380neo and are not based on whimsy – better fuel burn is a real goal.  The 787’s engines are also getting tweaked with PIPs.

Rolls-Royce’s decision to talk about its new engines is well timed.  The A380 is clearly a target for an exclusive for the neo version – Emirates’ Tim Clark is riding herd on this.  We understand the pressure on EA and Rolls-Royce for the next batch of A380s for Emirates is the toughest competition  the two engine makers have had to date.

The risks are huge: if EA loses, it has (potentially) no as there is no other program that uses the GP7200.  The EA partnership between GE and Pratt is not really even. If EA loses, GE has a very big business in large fans already and is exclusive on the 777, plus has a great business with 787.   Its GEnx is also in the running for an A330neo.  Pratt on the other hand is not a big player on the big fans; its only significant program is on the USAF tanker.  So, while GE is likely to be more sanguine about losing Emirates than Pratt, we think the EA partnership will nonetheless go full throttle on Emirates.  Denying Rolls-Royce a win helps GE more than it does Pratt.

However we suspect that the Pratt team today is all smiles – Rolls’ comes with a gear.  ‘Imitation is the highest form of flattery’  are words from 19th century cleric Charles Colton.  The folks in Hartford are no doubt nodding heads in agreement.

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