Rolls-Royce has announced on Monday, a huge deal with budget carrier Norwegian to manufacture and service Boeing 787 Dreamliner engines. The wide expected deal for $2.7billion (£1.9 billion) in total, has provided a major lift to the problem ridden FTSE 100 group.
The deal appears to be Rolls' second largest while the record-breaking £6.1billion deals in April last year takes the all time lead. The deal has involved to power 50 Airbus A380 superjumbos for airline Emirates and been acknowledged as one of the largest-ever UK export contracts, according to a report published in The Telegraph.
The Emirates contract has been acknowledged as an important win for since it has been stolen from Engine Alliance. The competitor appears to be a joint venture between General Electric and Pratt & Whitney, two US business giants. Under the agreement, Rolls will provide "TotalCare" long-term maintenance service to the Trent 1000 engines of 19 new Boeing 787 Dreamliner jets, the airline is going to purchase. Besides manufacturing the Trent 1000 engines, Rolls will also provide maintenance service to the engines of 11 other 787 Dreamliners, the airline is inaugurating soon. The contract has appeared as welcoming news for Rolls due to its tumbling share price since last year. The Manchester based British car manufacturer is going through a massive shake up since inception of its new CEO Warren East. He has restructured the Rolls Royce in a bid to establish transparency following a series of profit warnings, reports BBC. Securing the largest ever deal is a coup for Rolls CEO and thus attain support for his cost cutting efforts. The cost cutting measures include 3600 redundancies aiming to save around £200 million a year by 2017. He has abolished the two division system, splitting into five units with an instruction for reporting straight to him. Norwegian, the Copenhagen based airline may also opt for empowering another 10 aircraft with Trent 1000 engines. The deal is expected to develop the relationship further through operating aircraft powered by the latest version of the Trent 1000, reports Yahoo News quoting Bjorn Kjos, founder and CEO of Norwegian. The Norwegian deal is also believed to ease analysts' concerns on dependence of Rolls on supplying engines to Airbus only. Some analysts express their logical concern over Rolls' ability to sustain in price competitiveness with the US rivals referring the tiny size. Rolls Royce has announced on Monday, a contract agreement of $2.7 billion for manufacturing and servicing of Trent 1000 engines for 19 new aircrafts of Norwegian Air. The Manchester automobile company will also provide engine maintenance service to the airline's 11 other aircraft those are going to inaugurated shortly. The deal appears to be a welcoming one for Rolls since its shares have been witnessed to tumble since last year.
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