FLUG REVUE December 2004: Rolls-Royce Deutschland looks ahead

AXEL ARENDT

Chairman Rolls-Royce Deutschland and Group Executive Rolls-Royce plc.

The BR710 fleet recently notched up one million flying hours, while the BR715 series has achieved 2 million operational hours. We spoke to Axel Arendt about current and future projects at Rolls-Royce Deutschland.

FLUG REVUE: What are your strengths in the international Rolls-Royce Group?
Arendt: Our core competencies – owing to the BR700 and BR715 series that date back to the days of BMW-Rolls-Royce - lie in the thrust bracket of 65 to 93kN. From this resulted that within the Group we act as a centre of competence for the larger engines with two shafts. Rolls-Royce in the UK is the centre of competence for three-shaft engines, while Rolls-Royce North America covers two-shaft engines in the lower thrust bracket. On top of that, as a result of integration into the Group, the Oberursel site is the centre of competence for various production modules. In particular, that site performs pioneering work for the production of blisks.

FLUG REVUE: How many engines will you be delivering this year and next year?
Arendt: After a fantastic year in 2001, with 256 engines delivered, we were forced to cut back to only 106 engines in 2003 due to the industry crisis following the terrorist attacks in New York. This year I am glad to say that production has climbed back and we expect the final figure for the year to be just under 200 units. One of the critical factors in this connection was definitely the way international air transport has picked up again. On top of that, now that we are the two-shaft centre of competence in the Group, the production of Tay engines has been relocated from England to Dahlewitz. Just this year, we will produce something like an extra 60 engines in that area. Next year we expect the total to be around 200 engines. We are detecting clear signs that demand is growing and we expect modest growth for 2005.

FLUG REVUE: Do you see any real new applications for the BR700 family on the horizon?
Arendt: We are working on a whole range of projects, but some of them we are not expecting to come to fruition for some time yet. For example, that applies to the Beriev Be-200 programme, which has already been under discussion for some time now. But there are certainly also prospects for other re-enginening projects.

FLUG REVUE: Might the NATO E-3A or the MD-80 be possible candidates?
Arendt: An MD-80 upgrade with new engines is very topical at the moment due to the current price of kerosene. The increasingly stringent anti-noise regulations that apply to many airports are also a significant factor. But upgrade projects have to make economic sense. For example, one of the major US airlines could make a decision quite soon. On the NATO E-3A I cannot comment.

FLUG REVUE: What are you doing to keep the Tay and BR700 families up-to-date with the latest technological developments?
Arendt: We are performing the sustained engineering work that is customary in the industry. On top of that, we are convinced that our products, the BR710, the BR715 and the Tay 611-8C, represent a very high standard as far as fuel consumption, performance and especially noise emissions are concerned.

FLUG REVUE: How would you rate the prospects for the BR715-powered Boeing 717?
Arendt: You can work it out from the total number relatively easy. Of the 200 engines that we are building this year, 25 are earmarked for the 717. Nevertheless, we are cautiously optimistic. Within the framework of several projects, we are working hard to support the marketing of the 717 by our customer Boeing.

FLUG REVUE: Will there be a new engine developed and built by Rolls-Royce Deutschland?

Arendt: We have a substantial involvement on the TP400 for the A400M within the Europrop consortium. But as for a complete engine, like the BR710 or the BR715, currently there is nothing in sight. For example, the IAE V2500 is at present a very successful engine which is well established on the market. Hence, speculation about a successor or a possible role for Rolls-Royce Deutschland is inappropriate here.

FLUG REVUE: Does the compressor for the Trent 1000 for the Boeing 7E7 come from Dahlewitz?
Arendt: The way the work is allocated internally does not mean that the whole compressor will come from Germany, but we collaborate with Rolls-Royce plc in a number of different areas. Thus, in the area of engineering support we work extremely closely with our UK colleagues in Derby. Basically, we possess a variety of capabilities in compressor technology. This results from the fact that we have acquired competencies through various research programmes that we can put to use throughout the Group.

FLUG REVUE: What resources do you plan to invest in Dahlewitz in the future?
Arendt: We have slightly increased the headcount in Dahlewitz and Oberursel, with 60 to 70 new staff. In the middle of last year, we had to make about 200 people redundant as a result of the crisis. By the end of the coming year, we shall have about 100 additional staff. One major project that is very important in this connection is the TP400, on which 120 of our engineers are working. As a result of the change in our work responsibilities, we no longer spend as much on research as we did in the mid-1990s, when we developed the 710 and 715 series.

FLUG REVUE: What role will Rolls-Royce Deutschland play in ten years' time?
Arendt: I am generally optimistic about this. The relocation of the Tay production reflected clearly the philosophy of centres of competence within the international Group. At Rolls-Royce Deutschland we have a young and very capable team. And its achievements are also recognised in the Group. It is precisely in a totally high-tech area such as engine construction that one can best justify Germany as a business location, with its high labour costs. But we have no illusions; the competition is not asleep, including in the so-called low-wage countries. We are trying to cope with this by purchasing more parts from China and the new EU member states. Our biggest challenge in the years to come will be keeping costs under control. On the other hand, the globalised world we have today is too dynamic to make any guarantees about business locations. We have to keep readjusting to the challenges.

The interview was conducted by Volker K. Thomalla and Patrick Hoeveler.

FROM FLUG REVUE 12/2004

Last updated 11 November 2004

FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany