Engineering giant Rolls-Royce has signed a £3.2bn deal with Delta Air Lines to supply engines for 50 new Airbus aircraft.
The deal, coming shortly after the announcement that 2,600 workers would be made redundant mostly in Rolls-Royce’s aerospace division, is hoped to at least partially offset the falling profits caused by defence spending cuts.
Under the contract, Rolls-Royce will deliver 25 Trent XWB engines, deemed the world’s most efficient large civil aircraft engine, to power Delta’s Airbus A350s planes and an additional 25 Trent 7000 units for the upcoming A330neo.
Trent 7000 is a brand new engine developed specifically for Airbus’s new medium-range aircraft, for which it will be the only engine option.
"We are proud to be selected to power Delta's new generation of aircraft and look forward to deepening our relationship with a long-standing and valued customer,” said John Rishton, chief executive of Rolls-Royce.
“It is further evidence of the success of the Trent XWB in the market and represents a powerful vote of confidence in our newly-launched Trent 7000."
Trent 7000 is an evolution of the earlier Trent 700, powering the current A330, but uses architecture from the Trent 1000-TEN engine combined with energy efficient technology used in Trent XWB – currently the most popular engine for wide-body jet airliners.
The deal, a new chapter in the cooperation between the two companies which dates back to the 1970s, will include long-term servicing and maintenance of the engines.
"We are pleased to be working closely with Rolls-Royce to power aircraft that will be a vital part of our future, providing a new level of excellence on our Pacific, Atlantic and Latin American routes," said Nat Pieper, Delta Air Lines, vice president of Fleet Strategy and Transactions.
Rolls-Royce has ruled out growth this year as it saw orders for military aircraft falling due to widespread defence spending cuts. The company warned its profits next year may be up to 3 per cent lower due to the economic situation in the sector, enforcing many cancellations and customer delays.
Although the Delta order is not likely to save the situation, analysts said it presented a much-needed confidence boost.
"Delta's order for Rolls-powered A350s and A330s should not move Rolls's earnings or valuation, but is a nice confidence-booster after a tough three months,” said Sash Tusa, an analyst at Edison Investment Research.
"Delta is a very respected airline, so the order is a valuable affirmation of the strengths of the two aircraft models and their engines."
Rolls-Royce is the world’s second largest manufacturer of aircraft engines with a global customer base including 380 airlines and leasing firms.