Rolls-Royce is close to securing up to £200mn in UK taxpayer subsidies to fund development of its new Ultra Fan 30 engine for short-haul aircraft, with an agreement possibly announced next week. The investment forms part of Prime Minister Andy Burnham's broader push to reindustrialise the UK and create high-value manufacturing jobs. The support package, expected between £100mn and £200mn, will finance a demonstrator model of the Ultra Fan 30, according to sources.
Negotiations remain ongoing and timing could shift. The FTSE 100 group has sought government backing for over a year to re-enter the narrow-body aircraft market dominated by the Airbus A320 and Boeing 737. CEO Tufan Erginbilgiç has described the project as a once-in-a-generation opportunity, potentially creating 40,000 skilled jobs and generating up to £120bn for the UK economy.
Full engine development and certification may cost up to £3bn. Funding for the demonstrator is expected through the Aerospace Technology Institute. Rolls-Royce and the Department for Business declined comment.
The company has previously received state backing for engine programmes and warned it could shift production to Germany, where it currently builds business jet engines. Airbus and Boeing are expected to select engines for next-generation narrow-body aircraft by decade’s end.
Source: Financial Times Companies · Summarized by HeadlinesBriefing