Rolls-Royce is buoyed by £1.9bn B52 bomber deal
ROLLS-ROYCE has won a contract to supply engines for the United States Air Force B-52 Stratofortress bombers, in a deal which could be worth up to $2.6 billion (£1.9 billion).
It came as great news for the manufacturing company, one of Derby’s biggest employers, sending its shares up 9.3 per cent or 12.3p to 144.8p as analysts said the contract boosted R-R’s prospects to win large international orders and to recover from the pandemic, The Times reported.
In a deal with an initial payment of $501 million, R-R will supply 608 engines, spares, oversight and engineering data until 2038 for the installation on the air force’s 76 activeduty and reserve B-52s. Each plane has eight engines. If all options are exercised, the deal would be worth $2.6 billion.
The contract comes at an important time for Rolls, which has been a major victim of Covid-19, with lockdowns and travel restrictions leading to a crisis for the aviation industry. It has announced 9,000 redundancies during the pandemic and burnt through cash reserves at a rate of £1 billion a quarter.
R-R is an important government contractor producing propulsion systems for Royal Navy warships and nuclear submarines and RAF fighter jets. The company beat the incumbent supplier Pratt & Whitney, part of US company Raytheon, to win the air force contract. The work will be
carried out by R-R’s facility in Indianapolis, Indiana.
Tom Bell, chairman and chief executive of Rolls-Royce North America, said: “We are proud to join
a truly iconic US Air Force programme and provide world-class, American-made engines that will power its missions for the next 30 years. The F130 is a proven, efficient,
modern engine that is the perfect fit for the B-52.
B-52s are among the most famous aircraft in the American Air Force. They flew Cold War missions in 1954 and carry nuclear bombs, although they have been evolved to carry more non-nuclear, precision-guided weapons reflecting changing geopolitical times.
Most recently, B-52s were deployed to provide air cover for the US withdrawal from Afghanistan.
The aircraft’s manufacturer, Boeing, will integrate the new RollsRoyce engines, with the first due for testing by 2025. Rolls said its F-130 engine would provide “vastly greater fuel efficiency”.
Andy Douglas, an analyst at Jefferies, called the deal a “good” win and said while it would not change numbers straight away, “it provides additional comfort to longer-term consensus forecasts and is a positive for sentiment”.