UPDATE 2-Emirates picks Rolls-Royce engines for 50 A380 aircraft -sources

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By Tim Hepher and Sarah Young

PARIS/LONDON, April 16 (Reuters) - Dubai's Emirates airline has selected British engine-maker Rolls-Royce to supply engines for 50 of the 140 A380 aircraft it has onorder with Airbus, two sources familiar with the mattertold Reuters.

It is the first time the Gulf carrier has orderedRolls-Royce engines for its superjumbo fleet, the rest of whichis powered by Engine Alliance, a joint venture of GeneralElectric and Pratt & Whitney.

Airbus and Emirates declined to comment on the deal, earlierreported by France's La Tribune newspaper. A spokeswoman forRolls-Royce said the company did not comment on market rumours.

Emirates is due to make what it has described as a majorbusiness announcement in London on Friday, but has declined tosay what it will be about.

Though a shift in engine supplier is rare, the deal will notcome as a surprise after the airline's president Tim Clark saidin March he was considering Rolls-Royce engines for the 50aircraft for which engine selection had yet to bemade.

Industry sources said Emirates' deal with Rolls-Royce wastaking longer than expected to conclude, causing some anxietiesat Airbus as production milestones loomed for the affectedplanes which were ordered in 2013.

A380 UPGRADE ON CARDS

The expected engine order comes as Airbus ponders a possibleupgrade of the A380 with newer Rolls-Royce engines to improveits efficiency in response to persistent requests from Emirates,the largest customer.

The selection of the Rolls-Royce engines for the last batchof aircraft could also strengthen the prospects of the A380upgrade going ahead, one industry source suggested.

For Rolls-Royce, there may be the promise of other things tocome," the source said.

Airbus has said no decision has been taken on the A380upgrade and meanwhile continues to market the existing versionof the A380 to airlines that sources say include TurkishAirlines.

But many see a decision on the A380 upgrade as a make orbreak decision for the double-deck jetliner after a period ofslow sales.

Both Airbus and Boeing face increasing pressure to boost thesales performance of their largest passenger planes, the A380and the Boeing 747-8 as some airlines abandon the jumbo jetcategory for smaller planes. (Reporting by Tim Hepher and Sarah Young, additional reportingby Nadia Saleem; Editing by Dominique Vidalon and David Evans)

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