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 Shares in the British company rose an initial 2 percent after
Friday's announcement, which Rolls-Royce said was the biggest order
placed with a British company outside the defense sector.
It is the first time the Gulf carrier has ordered Rolls-Royce
engines for its superjumbo fleet, the rest of which is powered by
Engine Alliance, a joint venture of General Electric <GE.N> and
Pratt & Whitney <UTX.N>.
Announcing the deal at a press conference attended by Rolls-Royce
Chief Executive John Rishton and Emirates President Tim Clark, the
companies said the aircraft in question would enter service from
2016.
Though a shift in engine supplier is rare, the deal had been flagged
by Clark in March, when he said he was considering Rolls-Royce
engines for the aircraft. The selection could raise hopes that Rolls
will win more orders from Emirates.
Emirates, the leading buyer of the A380 jet with 140 orders, has
said that if Airbus <AIR.PA> goes ahead with a revamp of its A380
superjumbo it would place a big order for that model.
Clark has said he expected any so-called A380neo to be powered by
Rolls-Royce engines based on its Trent XWB engine.
"As far as the neo is concerned, we await the deliberations from
Toulouse," Clark told reporters on Friday, referring to Airbus
headquarters.
Rolls-Royce was also awaiting Airbus's decision on the A380 upgrade,
the CEO said. "We have said that if they do, we will support that.
We think that we can find a business case for it."
The contract signed on Friday for the classic A380 includes a
long-term "Totalcare" package, which means Rolls-Royce will also
provide service and maintenance to Emirates.
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Rolls-Royce is the world's second-largest maker of aeroengines after
GE, but its outlook has been hit by canceled orders in other parts
of its business, where it makes power systems for the oil and gas,
marine and industrial sectors.
It warned in February that profits this year could fall by as much
as 13 percent, on top of an 8 percent drop last year, saying the low
oil price had increased uncertainty.
In its aerospace division, the company is in the throes of a
cost-cutting program, aiming to shed 2,600 jobs to try to improve
profitability. Rishton said the new order would help secure jobs but
the 2,600 planned cuts would still go ahead.
(Editing by Li-mei Hoang and David Holmes)
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