Rolls-Royce Said to Offer China Engine Plant to Win Deal on Jet

Feb. 27, 2019
Factory would also build turbines for locally-ordered A330neos.

Rolls-Royce Holdings Plc is offering to build an aircraft engine assembly line in China as it chases a deal to supply turbines for the Asian nation’s first wide-body passenger jet, people familiar with the matter said.

The factory would also be able to make engines for Airbus SE’s A330neo jet, which the European planemaker is eager to get into the Chinese market, according to the people, who asked not to be named because the plans aren’t public. A representative for Rolls-Royce declined to comment.

The proposal comes as Rolls competes with General Electric Co. to power the CR929 wide-body plane being developed by Commercial Aircraft Corp. of China Ltd., known as Comac, slated for commercial sales around 2025. The London-based group is offering a derivative of the Trent 7000 model that’s the sole engine option on the A330neo.

Western aerospace firms are having to shift production to China to win orders in what’s set to become the world’s biggest aviation market early next decade. At the same time they’re reluctant to hand over technology that would enhance the country’s ability to make competitive planes without outside help, and the Rolls facility would fall short of actual manufacturing, the people said.

Recent Innovations

In offering a variant of the Trent 7000 instead of the Trent XWB that powers Airbus’s all-new A350, the U.K. company is also withholding some recent innovations in fan and turbine-blade design from the CR929, which will likely feature 250 to 320 seats, making it similar in size to the A330.

Rolls is continuing to weigh a partnership with state-owned Aero Engine Corp. of China on the jet, the people said. The wide-body is being developed by Comac with Russia’s United Aircraft Corp., a unit of Rostec State Corp., which has also said it could work with AECC on developing turbines, most likely for a later version.

Aerospace ranks third-top among priority industries identified in President Xi Jinping’s “Made in China 2025” program as the country seeks to take planemaking to a level where it can start competing with Airbus and Boeing Co.

China will need 7,690 new aircraft worth $1.2 trillion over the next 20 years, according to the U.S. company, with Comac itself aiming to deliver 2,000 planes by 2035.

The Rolls-Royce plant might offer Airbus a way to boost sales of the A330neo, a model pitched by the European company as perfectly suited to the Chinese market but struggling to win orders in competition with Boeing’s more advanced 787 Dreamliner.

With a backlog of 238 jets as of the end of January, including 28 for Iran Air which Airbus may not be able to fulfill due to the reintroduction of sanctions, a deal for the A330neo from China would come as a huge boost to the program.

By Bloomberg News

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