British manufacturer Rolls-Royce is said to be closing in on a lucrative subsidy agreement with the UK government in order to advance development of its new narrowbody engine.
According to the Financial Times, government assistance could total between £100 and £200 million ($133 and $267 million), with an announcement potentially coming next week.
The subsidy would be used towards developing and testing Rolls Royce’s UltraFan 30 engine, which was unveiled earlier this year. Rolls-Royce publicly set out the company’s intention to re-enter the narrowbody engine market in November 2023.
In its October 22, 2026, report, the Financial Times claimed to have spoken with two people briefed on negotiations.
Previously, Rolls Royce stated that it was “well positioned to re-enter the narrowbody market,” after many years building the industry’s largest engines to power widebody aircraft.
The manufacturer noted that aircraft production is forecast to double over the next 25 years, creating opportunities for tens of thousands of jobs with the potential to help stimulate the UK economy.
In July 2026, Roll’s Royce’s CEO Tufan Erginbilgic confirmed that talks with the government to support engine development had been progressing.
With Boeing and Airbus soon looking to make decisions over future aircraft and engines, Rolls Royce has been eager for the UK government, and Prime Minister Andy Burhnam, to make a decision.
Rolls-Royce withdrew from the narrowbody market back in 2011 when it exited the International Aero Engines consortium which produced the V2500 engine for the Airbus A320 family.