Rolls-Royce to shut-down civil aerospace division?

On February 7, 2021, Rolls-Royce indicated that it plans to shut down its civil aerospace unit for two-weeks in the summer of 2021. The move to temporarily cease its civil aerospace unit operations came in order to cut costs.

“As we continue to manage our cost base in response to the ongoing impact of the COVID-19 pandemic on the whole commercial aviation sector, we are proposing a two-week operational shutdown of Civil Aerospace over the Summer,” Rolls-Royce said in an emailed statement, that was seen by Reuters.

The shutdown is still pending approval from the company’s unions, as Rolls-Royce plans to introduce additional cost-cutting measures at its commercial aviation division, according to the report. 

The company’s finances were hit hard by the COVID-19 crisis, as both the demand and the usage of aircraft engines had dwindled. 

Previously, Rolls-Royce said that its cash outflow in 2021 would be worse than previously anticipated, as the new COVID-19 variants have prolonged the crisis in the aviation sector.

“More contagious variants of the virus are creating additional uncertainty,” Rolls-Royce said in a trading update published on January 26, 2021. “In this environment, financial forecasts remain highly sensitive to changes in external conditions and, while we are continuing to drive cost reduction, our current forecasts indicate a free cash outflow in the region of £2 billion ($2.7 billion) in 2021.” 

However, Rolls-Royce said it had about £9 billion ($9.7 billion) of liquidity it could make use of and that the company was “confident that despite the more challenging near-term market conditions we are well-positioned for the future.”

AeroTime News reached out to Rolls-Royce for comment and did not receive any answer at the time of publication.


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