The latest crisis for the business, which has a £15 billion annual turnover, has been the near-total4 Jul 2020 15:05
The latest crisis for the business, which has a £15 billion annual turnover, has been the near-total lockdown of the global aviation market. Rolls makes £4 billion a year in income from commercial airlines based on the flying hours of their aircraft and engines.
The income from airlines that fly Boeing 787s and Airbus A350s, A330s and A380s on Rolls’ Trent engines has all but disappeared during the pandemic. In addition, Airbus and Boeing have been slashing their aircraft production rates by at least 33 per cent.
The City was spooked yesterday because, while the sale of ITP Aero had been expected after Rolls almost sold the business last year, any decision to raise money from shareholders had not been expected until next year when the aviation outlook would be clearer.
Despite £2.4 billion of cash outflows earmarked for the troubled Trent 1000 engines for the Boeing 787 Dreamliner, Rolls had amassed a £7.4 billion liquidity cushion by the spring, having also tapped the Bank of England for £300 million of Covid-19-related loans.
Investors fear that the Derby-based company has burnt through as much as £2 billion of cash during the pandemic, a rate that has prompted the company to cut 9,000 of its 50,000-strong global workforce, with 3,000 of the job cuts in the UK.
The company could further access the debt markets, but those borrowings would become painfully expensive after S&P, the credit rating agency, cut Rolls’ rating to junk status.
see its all wild speculation as to what they will actually do , a next RNS of we are doing nothing wont surprise me at all
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