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Rolls-Royce wins US$1.2bn Quantas order to power Jetstar’s Airbus A320 fleet

Turbines and aircraft engines maker Rolls-Royce (LSE: RR) has been awarded new orders worth up to US$1.2bn from Quantas Airways (ASX: QAN) subsidiary Jetstar. The orders are for the Rolls-Royce’s V2500 engines, which will power up to 90 new Airbus A320 aircraft.

Jetstar, the Quantas budget airline, has ordered the engines for its new fleet of aircraft which will be distributed among its businesses consisting of Jetstar Asia, Jetstar Pacific and Valuair of Singapore. Jetstar has initially ordered 50 aircraft, with options and purchase rights on up to 40 more.

The contract also includes a long-term engine service agreement for these aircraft as well as engines installed on 40 aircraft already operated by the three Jetstar Group airline brand businesses.

The US$1.2bn is Rolls-Royce's share in the order as the senior shareholder in the International Aero Engines consortium (NYSE:IAE) which produces the V2500 engine.  The order’s total value to IAE is US$3.5bn.

IAE's other partners are Pratt & Whitney, the Japanese Aero Engines Corporation and MTU Aero Engines. The V2500, which can produce between 22,000 - 33,000 pounds of thrust, powers the Airbus A319, A320 and A321 as well as the Airbus Corporate Jetliner. More than 5,500 V2500 engines are in service or on firm order worldwide.

Disclosure: The author holds no positions in the company