Rolls-Royce has won a multi-billion dollar order to supply engines for British Airways' expanding fleet of long-haul planes that should safeguard the jobs of 2300 staff in central Scotland for years.
Rolls-Royce has won a multi-billion dollar order to supply engines for British Airways' expanding fleet of long-haul planes that should safeguard the jobs of 2300 staff in central Scotland for years.
The engine maker is set to be one of the main beneficiaries of BA's decision to sanction a huge investment in new planes as it looks to keep pace with rivals such as Virgin Airways.
The UK carrier yesterday announced it had placed its largest aircraft order in nine years, worth around $8.2bn (£4.1bn), split between rival plane manufacturers Boeing and Airbus.
In a coup for Airbus, the order covers 12 of the embattled European producer's A380 superjumbos initially, with options on a further seven.
BA also ordered 24 Boeing 787 Dreamliner aircraft and placed options for another 18.
As all of the planes will be powered by the company's Trent engines, the order will provide a boost for Rolls-Royce, which said the award could be worth £2.5bn-plus at list prices.
The planes are to be delivered between 2010 and 2014, putting Rolls-Royce's plants at Inchinnan in Renfrewshire and East Kilbride in South Lanarkshire in line for work for years.
Some 1300 skilled engineering staff at Inchinnan make the giant compressor blades which are a key part of the Trent engines. These are assembled in Derby in England.
The 1000 workers at East Kilbride repair and recondition compressor blades and components sent from Derby. Most modern large engines are expected to have a lifespan of 20 to 30 years.
Sir John Rose, chief executive of Rolls-Royce, said the order extended "an extremely valuable and productive partnership long into the future".
Rolls-Royce may be hoping for many more orders for Trent engines for the Airbus A380 and the Boeing 787 from British Airways and other airlines.
The orders will allow British Airways to expand its capacity by up to 4% annually.
Analysts said the orders were key for BA to keep up with competitors that have more aggressively expanded their long-haul fleets since the September 11, 2001 terrorist attacks in the US.
BA said that the A380 would provide more capacity for key high-density markets and help maximise use of scarce landing and departure slots at Heathrow airport. The Boeing 787 will be used to start new routes and increase frequencies in existing markets.
The orders are a win for both Boeing and Airbus, with the value of the total order being split roughly evenly.
Boeing has won more customers for its 787 as Airbus experienced problems with both its double-decker flagship A380 and its mid-range A350, its rival to the 787.
BA's shares rose 4%, or 15.25p, to 384.25p after the long-awaited fleet order.
Collins Stewart analyst Andrew Fitchie said BA traded at a significant discount to its peers reflecting a lack of confidence in the outlook, driven by worries over the knock-on effect of the credit crisis on premium demand.
Fitchie said: "We are optimistic that next week's September traffic stats release will show a good trading performance."
Meanwhile, BAA said it would introduce a new X-ray screening machine that could automatically detect explosives and liquids in passengers' hand luggage in its seven UK airports, including Heathrow.
In a 10-year deal worth at least £20m, BAA is replacing all existing X-ray screening systems for hand luggage with the new aTiX system from Smiths Detection, part of the Smiths Group.
