Rolls-Royce said its plane engines spent 60 per cent less time in the air in the first four months of this year than pre-pandemic levels seen in 2019, but the company remains cautiously optimistic about the recovery of international travel.
Cargo flights and the maintenance of key routes helped to bolster the British engineering company’s engine flying hours between January and April, with its financial and operational performance in line with expectations.
However, the company was more upbeat about the outlook for international travel as vaccination programmes accelerate around the world.
“While the timing of the recovery remains uncertain, the progress of Covid-19 vaccination programmes in a significant number of countries, particularly the US and UK, is encouraging,” the company said in its latest trading update on Thursday.
“Combined with increased testing, vaccination programmes are key enablers of further recovery in international air travel.”
Roll-Royce charges airlines for the number of hours its engines fly, which means much of its income dried up during the pandemic when travel ground to a halt.
The jet maker plunged into the red last year with an underlying pre-tax loss of £4 billion ($5.62bn), compared with a profit of £583 million in 2019, driven by the company's "power by the hour" business model.
The company reduced costs, took on debt and raised equity to survive, and said on Thursday it had "made good progress on the targeted £1.3bn of annualised cost savings".
During restructuring, 7,000 permanent and contractor roles were cut by the end of last year and at least 2,000 more are set to go by the end of 2022.
Senior managers and executives were hit with a 10 per cent pay cut, with the company warning in January that its 2021 cash outflow would be worse than expected.
The company stuck to its guidance to turn free cash flow positive at some point during the second half of 2021 as vaccinations increase across the globe and travellers return to the skies.
“The cautiously optimistic message from Rolls-Royce this morning was clear – a return to normalcy is the key to a second-half recovery," said Laura Hoy, equity analyst at Hargreaves Lansdown.
"Management confirmed that from their side, everything is ticking over as expected. Now the group just needs global vaccine rollouts to hold up their end of the deal."
Rolls-Royce also plans to sell £2bn worth of assets to help repair its finances, and said on Thursday that there was an "encouraging range" of parties interested in buying its Spanish unit ITP Aero.
“We faced unprecedented challenges in 2020 with events that were beyond our control. We acted quickly and decisively by putting in place the measures necessary to protect our people and our business,” chief executive Warren East said.
“Looking ahead, we are confident that the significant restructuring action we have taken in 2020 will deliver permanent cost reductions, positioning us well for the rebound in international air travel.”
Mr East said the company was committed to its net zero targets and "supporting the transition in our end markets to low carbon and net zero carbon solutions".
The company, which successfully completed taxi-ing trials of the company's all-electric plane in March, said the jet would take to the skies "within weeks".
The plane is powered by a 400-kilowatt electric engine and latest battery technology,
“In the last few months, we have taken significant steps, including successfully testing 100 per cent sustainable aviation fuels in current-generation aircraft engines in Derby, while our Spirit of Innovation all-electric aircraft will take to the air within weeks,” Mr East said.
More on Rolls-Royce
Rolls-Royce's all-electric plane completes runway test ahead of maiden flight
UK's Rolls-Royce forecasts £2bn cash outflow in 2021 on travel slump
Rolls-Royce to raise £5bn to prop up its finances amid falling engine demand
UAE currency: the story behind the money in your pockets
VERSTAPPEN'S FIRSTS
Youngest F1 driver (17 years 3 days Japan 2014)
Youngest driver to start an F1 race (17 years 166 days – Australia 2015)
Youngest F1 driver to score points (17 years 180 days - Malaysia 2015)
Youngest driver to lead an F1 race (18 years 228 days – Spain 2016)
Youngest driver to set an F1 fastest lap (19 years 44 days – Brazil 2016)
Youngest on F1 podium finish (18 years 228 days – Spain 2016)
Youngest F1 winner (18 years 228 days – Spain 2016)
Youngest multiple F1 race winner (Mexico 2017/18)
Youngest F1 driver to win the same race (Mexico 2017/18)
Groom and Two Brides
Director: Elie Semaan
Starring: Abdullah Boushehri, Laila Abdallah, Lulwa Almulla
Rating: 3/5
The biog
Born: Kuwait in 1986
Family: She is the youngest of seven siblings
Time in the UAE: 10 years
Hobbies: audiobooks and fitness: she works out every day, enjoying kickboxing and basketball
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The biog
Hobby: Playing piano and drawing patterns
Best book: Awaken the Giant Within by Tony Robbins
Food of choice: Sushi
Favourite colour: Orange
Expo details
Expo 2020 Dubai will be the first World Expo to be held in the Middle East, Africa and South Asia
The world fair will run for six months from October 20, 2020 to April 10, 2021.
It is expected to attract 25 million visits
Some 70 per cent visitors are projected to come from outside the UAE, the largest proportion of international visitors in the 167-year history of World Expos.
More than 30,000 volunteers are required for Expo 2020
The site covers a total of 4.38 sqkm, including a 2 sqkm gated area
It is located adjacent to Al Maktoum International Airport in Dubai South
The 10 Questions
- Is there a God?
- How did it all begin?
- What is inside a black hole?
- Can we predict the future?
- Is time travel possible?
- Will we survive on Earth?
- Is there other intelligent life in the universe?
- Should we colonise space?
- Will artificial intelligence outsmart us?
- How do we shape the future?
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Generation Start-up: Awok company profile
Started: 2013
Founder: Ulugbek Yuldashev
Sector: e-commerce
Size: 600 plus
Stage: still in talks with VCs
Principal Investors: self-financed by founder
Buy farm-fresh food
The UAE is stepping up its game when it comes to platforms for local farms to show off and sell their produce.
In Dubai, visit Emirati Farmers Souq at The Pointe every Saturday from 8am to 2pm, which has produce from Al Ammar Farm, Omar Al Katri Farm, Hikarivege Vegetables, Rashed Farms and Al Khaleej Honey Trading, among others.
In Sharjah, the Aljada residential community will launch a new outdoor farmers’ market every Friday starting this weekend. Manbat will be held from 3pm to 8pm, and will host 30 farmers, local home-grown entrepreneurs and food stalls from the teams behind Badia Farms; Emirates Hydroponics Farms; Modern Organic Farm; Revolution Real; Astraea Farms; and Al Khaleej Food.
In Abu Dhabi, order farm produce from Food Crowd, an online grocery platform that supplies fresh and organic ingredients directly from farms such as Emirates Bio Farm, TFC, Armela Farms and mother company Al Dahra.
'Operation Mincemeat'
Director: John Madden
Cast: Colin Firth, Matthew Macfayden, Kelly Macdonald and Penelope Wilton
Rating: 4/5
'Doctor Strange in the Multiverse Of Madness'
Director: Sam Raimi
Cast: Benedict Cumberbatch, Elizabeth Olsen, Chiwetel Ejiofor, Benedict Wong, Xochitl Gomez, Michael Stuhlbarg and Rachel McAdams
Rating: 3/5
'The Ice Road'
Director: Jonathan Hensleigh
Stars: Liam Neeson, Amber Midthunder, Laurence Fishburne
2/5
UAE currency: the story behind the money in your pockets
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