Emirates is edging toward a deal with Rolls-Royce Holdings (LON:RR) to power its latest Airbus A380 superjumbos, Reuters has reported. The news comes amid ongoing issues at the British engine maker which has been struggling with its Trent 1000 engines and recently confirmed that it would deliver fewer Trent 7000 engines than expected in the last quarter of the year.
Rolls-Royce’s share price has fallen into the red in today’s session, having slipped 0.50 percent to 829.80p as of 13:49 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently trading 0.41 percent higher at 7,123.02 points. The group’s shares have lost more than 13 percent of their value over the past year, as compared with about a near six-percent dip in the Footsie.
Emirates seeks deal with RR
Rolls-Royce reported yesterday that Emirates had said that it was edging towards a deal with Rolls-Royce for engines to power up to 36 A380 superjumbos.
“We are getting closer (to a deal with Rolls-Royce) but have not crossed the line yet,” a spokesperson for the Dubai-based carrier explained. Industry sources have further indicated to the newswire that Emirates is unhappy with the performance of Rolls-Royce Trent 900 engines on A380s already in service and that a shortfall in efficiency has meant the British engine maker having to pay hefty penalties.
Analysts on blue-chip group
The 16 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 964.87p on the shares, with a high estimate of 1,259.00p and a low estimate of 675.00p. As of November 2, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.