Rolls-Royce has expressed its keenness to provide engines after Boeing reached out for support with plans for a new, midrange jetliner.
Boeing’s image reached nadir when its 737 Max encountered two crashes in October 2018 and March 2019 respectively. What added insult to injury was that the entire global fleet of 737 Max airliners was grounded after the second crash in Ethiopia. After more than a year, Boeing completed its recertification of 737 Max for flight in June. But, it was yet to come up with a plan to revive the company’s dwindling fortunes. It appears that the excruciating wait is finally over. British engine maker giant Rolls-Royce Holdings Plc has expressed interest in providing engines for a new, midrange jetliner, provided Boeing Co. decides to move forward with a concept later this decade, people familiar with the development said.
The news came amid a couple of other celebratory occasions for Boeing 737 Max. First, American Airlines has decided to put 737 Max back into service from December 29. Second, the European aviation regulator has said that the plane is safe to start its operations again. The body has not, however, given any date for the plane’s return to the tarmac, but Boeing is considering the European body’s go-ahead as a huge boost.
The Boeing – Rolls-Royce Association
According to insiders who refused to go on record, the US plane maker in the last few weeks has reached out to Rolls-Royce to gauge its interest in developing a potential new aircraft. It has been reported that the midsize jet would be designed to fill a gap in Boeing’s product lineup, and compete with the success of Airbus’s new version of the plane — the SE sales dynamo and the A321neo, essentially a replacement for the 737 Max plans.
Boeing has reached out to Rolls-Royce to gauge its interest in developing a potential new aircraft.
The talks between Boeing and Rolls-Royce were reportedly focused on an early-stage plane concept with specifics that are in flux. However, one of the sources said that Boeing wasn’t gathering resources or doing wide-ranging studies with airlines and lessors, as is a common practice for a new development program. When asked, Rolls-Royce and Boeing refused to comment on the report. However, speculation that Boeing is on the lookout to develop a new plane gathered momentum when it was recently reported that the company is approaching suppliers and customers for a potential single-aisle airplane with a capacity of 200 to 250 passengers.
Analysts had mixed reactions to the Boeing-Rolls-Royce news. The majority said it was an inappropriate time for such an initiative. However, some said that Boeing is running against the current and it needs to throw all its weight behind regaining its reputation and finances.
“It’s absurd to develop a new Boeing plane at this time, given the risk of reduced sales from the 737 Max and the financial burden on airlines and manufacturers.”Douglas Harned, an Analyst at Bernstein
Harned further added, “The next-generation engine is still far away and the manufacturers are so cash-strapped that they would hardly think of developing a new plane.” Come what may, Boeing can’t overlook the market situation if it wants to reaffirm its position as the big player in the aviation industry. With 737 Max off air for more than a year and no replacement to compete with A3201neo, Chicago-based Boeing has already lost a major chunk of its market to Airbus.
Furthermore, although 737 Max has started getting approvals from aviation regulators, its complete return to the skies is still a distant dream. “Boeing should seriously consider investing in a new single-aisle jet to stay competitive in future, said Ron Epstein, an analyst at the Bank of America Corp, opining that hard times for the company require hard decisions from the top bosses. “If Boeing wants to stay relevant, it has to develop a new plane,” Epstein said. “And running a company just for returning cash to shareholders and implementing cost-cutting measures is not going to get them anywhere. That’s an old-school strategy.”
Although 737 Max has started getting approvals from aviation regulators, its complete return to the skies is still a distant dream.
Earlier this year, Boeing scrapped its plans to develop a new midmarket plan (NMA) on the advice of its new chief executive officer Dave Calhoun. The twin-aisle cabin plan was targeted at flights of up to 5,000 nautical miles. Boeing’s main problem for some time has been its inability to come up with an idea to replace its ageing 757 and 767 jetliner models. Its rival Airbus’s A320 family, on the other hand, has the likes of A321XLR. It has been seen as the successor of 757 and has attracted buyers as prestigious as the United Airlines Holdings Inc. and the American Airlines Group Inc.
Rolls-Royce Ultrafan Engine Program
Rolls-Royce produces engines for wide-body heavy-duty planes which are mainly used in international travel. But the company’s business has been severely hit by coronavirus-related restrictions with international airlines having to halt almost all operations. The British engine-maker firm, in October, said that it was exploring partnership options for its Ultrafan engine program.
Watch: Boeing begins work on the Ultrafan engine
Earlier, when Boeing was developing the NMA, Rolls-Royce pulled out of the plan, saying its Ultrafan engine wouldn’t be ready by the plane’s targeted debut in the mid-2020s. A person related to the development had said Rolls-Royce would only move forward with the latest Boeing concept if it made some commercial sense. Rolls-Royce is attempting to make Ultrafan available in the market toward the end of this decade. It’s renewed interest in Boeing can also be a measure to get some early business before the aviation industry recovers from its worst slump.
Rolls-Royce would only move forward with the latest Boeing concept if it made some commercial sense.