Rolls-Royce Plc will double down on its investment in its jet engine business and seek its electric flight division, which develops electric propulsion systems for small aircraft and air rental cars.
Rolls-Royce PLC, now under the leadership of Tufan Erginbilgi, wanted to quickly increase profits while cutting costs. The company recently cut 2,500 management and administrative positions and is looking to increase its jet engine division's operating margin from 2.2 in 2022 in the "medium term."5% to 15% to 17%.
Speaking at the recent Rolls-Royce Capital Markets Day, Erginbilgi revealed it would consider the option of "exiting" the Rolls-Royce Electric business, which has been working on electric propulsion. It wants to ** the business, or at least reduce its position in the company to a minority stake, "and intends to exit it altogether in the medium term". The company believes its electrical division "will bring good value to third parties" and enable it to better focus on core electrical engineering activities in its power systems, defense and civil aviation businesses.
Despite abandoning the electric powertrain, Rolls-Royce plc remains committed to reducing its environmental impact. Erginbilgi told investors that the sustainable aviation fuel the company is developing will be the only way for large airliners to meet their net-zero climate goals. Rolls-Royce also remains committed to "working with EasyJet to develop hydrogen capabilities", but Erginbilgi does not believe that "hydrogen will play a role in the industry in the next 15, 20 years".
In a statement, Elgin Birgic said: "Rolls-Royce is at a critical juncture in its history. After a great start to our transformation plan, we today have a clear vision for the journey we need to take and the areas we must focus on. We're building a high-performing, competitive, resilient, growing Rolls-Royce that has the financial power to control and shape its own destiny. ”