The Rolls-Royce Holdings PLC (LON: RR) share price is still stuck in the sideways trading range that has been in place since March following the initial rally at the beginning of the year, which was triggered by the appointment of a new CEO, Tufan Erginbilgic.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
The CEO has made significant progress in turning around the company after initiating a review of its business and embarking on a cost-cutting campaign to return the engineering firm and plane engine manufacturer to profitability.
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Tufan Erginbilgic revealed that Rolls Royce was ready to re-enter the small engine market that serves single-aisle aeroplanes such as the Airbus A320 and Boeing 737 planes, whose demand has boomed in recent years since they are heavily used in short and medium-haul flights.
The company is not in a hurry to rejoin this market segment. It expects to start making small jet engines in ten years as plane manufacturers start making their next-generation planes instead of entering now and competing with other plane engine manufacturers with old engines.
According to its CEO, Rolls-Royce has made significant progress towards achieving its new goals and objectives under his leadership since he took over in January. The company has benefitted from rising demand for the widebody planes whose engines it manufactures.
Rolls-Royce revealed that demand from China had recovered more than expected, compensating for the lower travel demand for cross-Atlantic flights. Hence, the company is doing much better than expected.
Meanwhile, the firm runs the risk of being left behind by the rest of the industry, which is highly focused on making new plane engines that are fuel efficient.
CFM International, a joint venture between General Electric, Rolls-Royce’s American arch-rival, and France’s Safran, unveiled new details of its Revolutionary Innovation for Sustainable Engines (Rise) engines, promising a 20% fuel saving.
The engines developed by CFM would have an open fan, eliminating the engine cover (known as a nacelle), which would mark one of the most significant changes in the appearance of passenger planes in decades.
*This is not investment advice.
Rolls-Royce (RR) share price
The Rolls Royce share price fell 1.12% and is still trading within the range that has been in place since early March this year.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.