Seeking Alpha

CNBC: Airbus to name RR as exclusive A330neo engine supplier

  • After much discussion to revamp its A330, Airbus (EADSF) is now close to a decision which will allow Rolls-Royce (RRCEF) to become the exclusive provider of the upgraded planes' new engines, CNBC reports.
  • The announcement reinforces the bond between the two companies, as the current jet engine supply is also provided by rival GE (GE). The new A330neo will be a wide-body jet with new wingtips, and save up to 15% in fuel costs.
Comments (7)
  • Felix Lumpe
    , contributor
    Comments (236) | Send Message
     
    The GE engine that had been on the legacy A330s (CF6-80E) will soon be out of production having been essentially replaced by the GENx engines which were not specifically sized for the A330. The GENx of course is the dominant engine for the B787 and sole source on the B747-8. GE still has a market share of 75% on all new commercial and commuter aircraft worldwide (including CFM) so this news isn't really much of a set back. Believe they have firm orders back logged through 2020 or so. Add to this their marine and helicopter engine markets and their burgeoning services business and it is easy to see why GE's Aviation business is the centerpiece for the entire corporation.
    27 Jun, 08:13 AM Reply Like
  • newtothescene
    , contributor
    Comments (11) | Send Message
     
    Boeing is moving ahead with GENx, good. Wes for born. EADS has a lot of catching up to do.
    27 Jun, 11:52 PM Reply Like
  • joegillam
    , contributor
    Comments (366) | Send Message
     
    I'll take a Rolls car and a GE jet engine, not the other way around.
    30 Jun, 04:24 AM Reply Like
  • Felix Lumpe
    , contributor
    Comments (236) | Send Message
     
    The RR auto company is not affiliated with the RR engine company. GE's entry into the automobile market is being delayed pending their successful enhancement of their latest garbage disposal. Based on my own experience, they are still grappling with getting a reliable refrigerator into the marketplace, consequently, the GE automobile is not on my radar screen.
    30 Jun, 09:12 AM Reply Like
  • joegillam
    , contributor
    Comments (366) | Send Message
     
    Relax, Feliz, just my attempt at humor based upon some of the observations of the RR jet engines over the years, compared to the great success of the GE engines.

     

    Have not studied friges much but the RR company was founded in 1906 by Henry Royce and Charles Rolls and began manufacturing autos. They branched into aircraft engines in WW I. They are affiliated by their common DNA. The cars have experienced limited success over the rears but the jet engines have been not so good. The jet engine side has gone into receivership at least twice to be bailed out by the Crown.

     

    Recently engines have failed in flight on 787s, 330s and 380s. The 380 situation grounded the entire Qantas fleet several times. Past failures are out there, too. If it was not for AirBus and the European desire to use European products I don't think they would still be in business. AirBus has been forced to offer GE engines as an option in order to sell their aircraft.

     

    Joe In Georgia
    30 Jun, 03:01 PM Reply Like
  • Felix Lumpe
    , contributor
    Comments (236) | Send Message
     
    Joe - you are quite correct. GE's market share in the commercial engine business is approx 75% including CFM. RR is a distant second with something less than 20%. Too bad GE Aviation isn't its own independent entity, free of the GE Capital boat anchor. - Felix
    30 Jun, 04:25 PM Reply Like
  • joegillam
    , contributor
    Comments (366) | Send Message
     
    Felix..........Thousands of financial institutions are is business and making good money. GE, like many other financials, did not keep their eye on the ball during the '08/'09 recession. I don't care if they keep it or sell it but should they keep it and properly manage it, their just might be a profit in the division. Properly managed it would be win-win. Sell an engine and get the profit - finance the sale and get the profit. But since it has been their "boat anchor" I'm sure the stock will jump when it sells.

     

    Have a fifth on the fourth...........

     

    Joe In Georgia (But traveling the Mississippi River this week)
    1 Jul, 09:52 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector