Rolls-Royce sells its flying taxi business

Rolls-Royce has launched a sales program worth £1.5bn to sell its electric plane and flying taxi businesses.

Mr. Erginbilgic plans to increase the profits of the jet engine manufacturer by four times. He aims to achieve this by saving £500m in costs annually.
Analysts call Mr Erginbilgic “Turbo Tufan” and he revealed Tuesday that he hopes to see Rolls-Royce’s profits reach £2.5bn or more by 2027.

Since he took over the company in January, he has been on a mission to overhaul it. Last month, a Rolls spokesperson announced the company would be cutting up to 2,500 positions across the board.

The company has since announced further cost-saving plans and said that it is also weighing the possibility of external investment into its battery storage and power generation divisions.

Former BP executive Mr Erginbilgic described Rolls-Royce in the past as a burning platform. He said Tuesday that “we are looking to create a new Rolls-Royce which is high-performing, competitive, resilient and growing.”

This company will be able do things that Rolls-Royce could not do before.

The latest announcement revealed that the company also aims to reenter the market for engines used in smaller passenger jets such as the Airbus A320 or Boeing 737 which transport passengers across Europe.

The company stopped manufacturing these engines in 2011, but will now look for partners to resume production.

The company also plans to expand its micro-reactor, which could be beneficial for the defense sector.

Mr Erginbilgic stated: “If you consider energy generation logistics issues in defense, it is easy to see why microreactors can be useful.”

The company is developing a microreactor that can produce between 1 and 10 megawatts. Its reactor vessel will be able to fit into a small shipping box for ease of transport.

Rolls-Royce shares rose by 6pc on Tuesday, after a 200pc rise in the last year.

The company has made a remarkable turnaround since a pandemic that was so painful it forced them to raise billions to survive.

On Tuesday, Mr Erginbilgic also rejected speculation that Rolls-Royce might sell its power business. This includes diesel-burning engine for trains, ships, and electricity generators.

He had previously called the division “grossly undermanaged”, but now says it will be kept in-house, with external investment.

The company already has external capital to fund its nuclear power division, which aims to build modular power plants at a lower cost than traditional power stations.

In the case of the electric plane division of Rolls , its battery-powered monoplane Spirit of Innovation achieved a top speed of over 387 miles per hours last year.

This unit will be sold alongside the flying taxi division in order to raise money for other areas of the company.

Mr Erginbilgic stated: “The most efficient resource allocation suggests that we do not actually invest in this enterprise.”

We believe that the capabilities we developed will be more valuable to someone else.

He insisted that Rolls was not abandoning the electric flight power entirely, and said that hybrid systems using battery power to improve engine efficiency were still being developed.

He said sustainable aircraft fuel would help decarbonise travel over the next 15-20 years. This will give Rolls’ civil Aviation division a boost.

The Derby-based company employs 42,000 people worldwide, including over 21,000 in the UK.

The company also has large staffs in Germany and America, where it employs 11,000 and 5500 employees respectively.