Rolls-Royce close to UK state funding deal for new short-haul engine, FT says

what happened

Rolls-Royce is close to an agreement with the British government that could bring up to £200 million ($267.9 million) in subsidies for a new engine aimed at short-haul planes. The Financial Times reported on Friday that an announcement could come as soon as next week.

According to the paper, citing people familiar with the matter, £100 million to £200 million would pay for building and testing a demonstrator of the UltraFan 30 engine. Reuters has not been able to confirm the report independently, and the company did not reply to a request for comment made outside business hours.

Chief Executive Tufan Erginbilgic said in July that government backing and a place for the engine on a narrowbody airframe would create 40,000 jobs in Britain. He also confirmed talks with Germany and the US about support for the programme.

why it matters

Rolls-Royce has been absent from the narrowbody segment for about 15 years, a market far larger than the widebody niche it now serves. For investors, public funding would lower the development risk of a programme that could reshape the company's product lineup.

market impact

Rolls-Royce: state funding would reduce development risk for a new narrowbody engine

tags

instruments