Page last updated at 00:01 GMT, Thursday, 28 January 2010

Engine servicing key to Rolls-Royce earnings

By Dave Harvey
BBC West Business Correspondent, Rolls-Royce's Bristol factory

It must be the biggest extended warranty in the world.

Engineers support the Rolls-Royce EJ200 Engine in the Typhoon jet fighter
It wouldn't be economic to use people in uniform to maintain our engines long term. It is better to use the original manufacturers to do that
Quentin Davies, UK's defence equipment minister

Instead of a £49 ($79) deal to mend his new hi-fi if it breaks, Quentin Davies has just spent £865m on a maintenance contract for his new engines.

But then Mr Davies is no ordinary customer, and these are no ordinary engines.

They are the Rolls-Royce EJ200 power packs for the Royal Air Force's fleet of Typhoon jet fighter.

And Mr Davies, the UK's defence equipment minister, has experienced them first hand.

"I am one of that tiny minority of highly privileged human beings who's actually flown in this aircraft," Mr Davies tells a small crowd of engineers at Rolls-Royce's Bristol factory.

"I have felt the thrust of those remarkable engines behind me - or below me as we went literally vertically straight up at 90% angle to the earth's surface."

Support contracts

The UK is one of six nations that is buying 707 Typhoon jets, for which 1,500 engines have been ordered.

Rolls-Royce engineers discuss engines with US Navy personnel
Rolls-Royce makes about half its income from servicing engines

Anyone who has seen the Typhoon in the air is impressed at the power the engine delivers, up to 20,000 pounds of thrust.

Naturally most attention has been focused on the development and manufacture of the EJ200, largely in Bristol.

But making and selling these huge engines is only half the story.

"The services part of our business is about half - a hugely significant part," Martin Faussett, managing director of Rolls Royce Defence Aerospace says.

"A lot of these important engine deals go with a significant engine support contract."

Manufacturer maintenance

The UK deal keeps about 500 people in work.

The Typhoon in the air
The UK is one of six nations that is buying 707 Typhoon jets

Rolls-Royce engineers work alongside RAF technicians at RAF Coninsby in Lincolnshire. Similar deals with foreign air forces have resulted in Rolls-Royce engineers being based in India, Malaysia, at sea with the US Navy, and in the deserts of the Middle East.

If these overseas staff get stuck, they can call a 24/7 operations room in Bristol, where engineers can troubleshoot any queries that cannot be fixed on the ground.

"The RAF do have very good engineers," Mr Davies insists.

"But we want to make sure that they do what they're supposed to do, which is supply the front-line maintenance.

"It wouldn't be economic to use people in uniform to maintain our engines long term. It is better to use the original manufacturers to do that."

When the Singapore Air Show opens on 2 February, Rolls-Royce will be there as usual, selling engines and making contacts.

Anyone who fancies buying one should remember the salesman will insist you take advantage of their excellent after-care service as well.



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