Rolls-Royce share price jumps as group confirms $9.2bn Emirates order

Shares in Rolls-Royce Holdings Plc (LON:RR) have jumped in London this morning after the company confirmed that it had won its ‘largest ever’ order from Emirates. As of 10:03 BST, Rolls-Royce’s share price had added 1.38 percent to 993.50p.

The London-listed engine maker confirmed that it had secured a $9.2 billion order to provide Trent 900 engines and TotalCare service support to Emirates. The engines will power 50 Airbus A380 aircraft which will enter service from next year.

Reuters last night quoted two sources familiar with the matter as reporting that Dubai’s Emirates airline had selected Rolls-Royce to supply engines for 50 of the 140 A380 aircraft it has on order with Airbus. That could mean a $2.5 billion order for the London-listed group depending on the long-term maintenance contracts which the company tends to sell to its customers. In its coverage of the news, The Times noted that the 50 new A380s will be powered by the Trent 900, the engine developed for the aircraft by Rolls-Royce.
Industry sources told Reuters that Emirates’ deal with Rolls-Royce was taking longer than expected to conclude, causing some anxieties at Airbus as production milestones loomed for the affected planes which were ordered in 2013.
The Financial Times quoted Zafar Khan, analyst at Société Générale, as saying that the news “should be well received”. “They are ousting their biggest rival from the biggest customer for the aircraft, and you get value as well.” The deal will break the dominance which Rolls-Royce’s US rivals, General Electric and Pratt & Whitney, have had on the engines for A380s flown by Emirates.
Another analyst, however, told the newspaper that there was a risk that such a big order could create new uncertainty over medium term margin guidance at the group. “It might give them another excuse to abandon it,” he added.
As of 07:55 BST, Friday, 17 April, Rolls-Royce Holding PLC share price is 980.00p.