After issuing a major profit warning nearly three weeks ago, Rolls-Royce (OTCPK:RYCEY +1.7%) now says it will cut 2,600 jobs over the next 18 months in a battle to reduce costs.
The layoffs will mainly come from the company's aerospace division, costing £120M pounds ($192M) over the next two years, before reducing spend by around £80M once the changes have been fully implemented.
Rolls-Royce has also promoted David Smith from aerospace finance director to become the group's CFO, replacing Mark Morris who leaves after 27 years.
Rolls-Royce (OTC:RRCEF) has finalized an initial 25-year deal to form a JV with Safran's (OTCPK:SAFRY) Hispano-Suiza unit to design and develop accessory drive train transmissions for the company's full range of future aircraft engines.
A production plant will be built in a competitive country starting next year, with the aim of starting operations in late 2016 or early 2017.
As the U.S. military explores ways to cut costs of its V-22 Osprey aircraft, Rolls-Royce (OTC:RRCEF) may lose its place as the program's sole engine provider.
"The V-22 Program is continually investigating ways to reduce the life cycle costs of the aircraft," announced the U.S. Navy by email. "Knowing that more than 90% of the operational use of the V-22 is in the future, coupled with budget pressures, it is prudent to investigate alternatives to existing systems and the engine is no exception."
Each V-22 is currently powered by two Rolls-Royce AE1107C engines.
The U.S. Marine Corp is in the process of acquiring 360 MV-22s, while the Pentagon this fiscal year is acquiring the last CV-22s for the Air Force. The aircraft are also attracting several overseas buyers.
The new wide-body plane will be 14% more fuel efficient due to new winglets (increasing the jet's wingspan) and larger Rolls-Royce (RRCEF) engines. The A330neo will also be able to carry more passengers and fly farther.
Airbus states these preliminary features are still subject to change.
Rolls-Royce (RRCEF) and Eaton (ETN) will continue their Trent XWB-97 engine program which supplies turbofan engines to aircraft-maker Airbus. Under the partnership, Eaton will continue providing engine build-up solutions to manufacturer Rolls-Royce.
“We are excited to continue our involvement on the Trent XWB engine program by providing a reliable, lightweight and technically advanced engine build-up solution for the XWB-97," says Uday Yadav, President of Eaton's Aerospace Group.
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.
Iran would purchase 400 new aircraft over 10 years if sanctions were lifted, the country's top aviation official reportedly says. The country has been banned from purchasing new Western airliners since the 1970s.
Of Iran's 250 commercial planes, about 150 are flying and the rest are "not functional" because of a lack of spare parts. The average age of the nation's commercial fleet is 22 years.
Under the recent deal with the international community over its nuclear program, Iran is allowed to acquire spare parts and services on a limited basis.
Companies that could benefit from Iran being allowed to buy aircraft include Boeing (BA), Airbus (EADSY), Bombardier (BDRAF), Embraer (ERJ), GE (GE) and Rolls-Royce (RRCEF).
GE (GE) has obtained a $1B order to supply Vietnam Airlines with engines for a fleet of Dreamliners, with the conglomerate beating out competition from Rolls Royce (RRCEF.PK). The official signing of the deal is set to take place next month.
The carrier is due to start receiving 19 787-9 aircraft in 2015.