Emirates Airline President urges Rolls-Royce to focus on engine performance
30 Nov 2023
In the aftermath of Rolls-Royce's ambitious plan to quadruple profits, the President of Emirates Airline, Tim Clark, has called on the British firm to "go back to basics" and prioritize the performance of its engines. The comments come just a day after Rolls-Royce CEO Tufan Erginbilgic unveiled a strategy aimed at increasing profit margins and implementing "value-driven pricing."
Shares in the engine maker saw a rise following Erginbilgic's announcement, which outlined a strategy focused on boosting profit margins to 15–17% and introducing higher servicing bills. However, Clark, who had previously criticized Rolls-Royce over pricing and the performance of its largest engine at the Dubai Airshow held in early November 2023, remains unconvinced by the proposed plans.
Clark emphasized the significance of providing engines that align with client expectations. He asserted that in cases where an engine fails to perform as intended, costs are likely to increase. Moreover, he highlighted that the ability to derive value from the client would diminish, as clients are unwilling to accept subpar performance.
During negotiations at the air show, Clark ruled out an immediate deal to purchase Airbus A350-1000 jets, citing concerns over the durability of Rolls-Royce engines and pressure for higher servicing prices. He urged Rolls-Royce to "get your engines right" and design engines that align with customer demands.
Clark also revealed that the engine standoff with Rolls-Royce had "opened the door" to reconsidering the Boeing 777-8 as a passenger variant as well as a freighter. While acknowledging that the idea of ordering the A350-1000 was not entirely off the table, Clark stressed that progress on engine durability was crucial for future considerations.
Rolls-Royce has acknowledged higher-than-expected downtime on the XWB-97 engine but denies suggestions of it being "defective." The company plans to introduce modifications from its Ultrafan engine technology research in late 2025 or 2026.
In response to the ongoing dispute, Erginbilgic stated on Tuesday that the durability issue was specific to the XWB-97 engine and only in challenging climates. He assured that Rolls-Royce was working with Airbus to improve the engine significantly.
The tug of war between fuel efficiency and engine durability has brought to light the challenges faced by engine makers and airlines. While engine makers seek to be rewarded for cutting-edge technology, airlines, including Emirates, argue that they bear the brunt of disruptions and reputational damage during unplanned repairs.
In his capacity as a prominent figure in the airline industry, Tim Clark delivered a straightforward message to the broader industry, emphasizing that if airplanes are built according to airlines' preferences, all other aspects will naturally align.
