One of the US Air Force's C-130J transport planes, which will continue to be serviced by Rolls-Royce

Rolls-Royce win $97.3 million US Air Force contract

Rolls-Royce has been awarded a $97.3 million contract from the US Air Force to support its C-130J transport fleet in 2013.

The contract will see the power systems company provide logistics and program management support, engineering services, spares and technical data support for the Rolls-Royce AE 2100 engines as well as the nacelles and propellers on the US Air Force C-130J fleet.

The news comes as analyst have predicted the FTSE 100 engineering company will deliver a 16 per cent hike in underlying profits to £1.4 billion, when it publishes its 2012 results on Thursday.

Paul Craig, president of defence customer services, said: "We are proud that the US Air Force has again chosen Rolls-Royce to deliver our innovative and cost effective MissionCare™ support. Rolls-Royce has worked hard to develop service support that aligns our efforts with customer requirements for mission readiness."

This is sixth year the contract has been extended and Rolls-Royce has met availability metrics every year, maintaining more than 90 per cent parts and fleet availability.

The firm supports the C-130J engine fleet through its new Defense Operations Center in Indianapolis, providing round-the-clock real-time engineering support for operators of a variety of aircraft for the USAF and other military branches.

The contract award is sure to add to add to the positive note struck by the expected announcement of a surge in profits for 2012 later this week.

The company, which has major sites at Derby and Bristol and employs around 40,000 people in more than 50 countries, is expected to see underlying revenues jump to £12 billion, from £11.3 billion last year.

Contract successes have included a "significant" deal to power the US Navy's upcoming fleet of new hovercraft and a record number of orders for its Trent XWB engine that will help reduce jet emissions by 16 per cent and is due to come into service in 2014.

Jeremy Bragg, analyst at Citi, said recently that the group's earnings should prove resilient as the civil aerospace business was predominantly based around long-term service agreements.

He also said that the "significant barriers to entry" in the market limited the threat of Chinese competition.

As well as strong demand from customers in emerging markets, it is benefiting from the strong growth of plane makers Boeing and Airbus who are lifting output after building up record backlogs of orders.

However, aside from the contract announced today, its defence aerospace division has seen a drop in orders as advanced nations see their military spending plans come under pressure.

But despite the promising results for 2012, for many the focus will be on the progress of veteran lawyer Lord Gold's review into the company's compliance procedures in the wake of claims being investigated by the Serious Fraud Office (SFO).

Rolls disclosed in December that it was in talks with the SFO in relation to concerns about bribery and corruption in Indonesia and China and warned there was the potential for the prosecution of individuals and the company.

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