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Rolls-Royce gets $1.8b engine order

Air China wants 20 planes outfitted

By Jane Wardell
Associated Press / November 23, 2010

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LONDON — Rolls-Royce Group PLC, the manufacturer of the plane engine that blew apart midair on a Qantas superjumbo this month, got some good news yesterday with a $1.8 billion order from Air China — its second major Chinese order in weeks.

The London-based company will supply Trent XWB engines for 10 of the Chinese carrier’s Airbus A350 XWB aircraft and Trent 700 engines for 10 Airbus A330 aircraft.

The latest deal comes soon after a $1.2 billion order from China Eastern Airlines to supply Trent 700 engines 16 A330 jets — an agreement that was announced in Beijing with great fanfare during a visit there by Britain’s prime minister, David Cameron.

China, where Rolls-Royce enjoys a 56 percent share for large civil aero engines, is an increasingly important market for Rolls-Royce as demand for air travel grows in line with consumer affluence.

Air China’s Trent 700 fleet now stands at 78 aircraft either in service or on order.

It is another member of Rolls-Royce’s Trent family that has given the company so much trouble in recent weeks — the Trent 900 that powers the Airbus A380 double-decker.

Rolls-Royce is working with airlines to replace faulty versions of the engines after the Nov. 4 incident on the Qantas jetliner that ended with a safe emergency landing in Singapore.

The company’s stock has dropped around 9 percent since the incident, shaving some $1.4 billion off the value of the company.

Still, recent announcements including the two China deals, a $100 million share in an engine deal with Brazil’s TAM Airlines, and the first order for the company’s new wave-piercing ship have prevented the fall from being greater.

The shares closed yesterday on the London Stock Exchange at $9.45.

While the Trent 900 engine faces a rocky road ahead, Rolls-Royce has now own more than $4.5 billion in orders from customers around the world for the Trent 700 since the start of July — some 75 percent of orders for engines for the A330.