Rolls-Royce is aiming to re-enter the large and growing narrowbody aircraft engine market, a sector it exited in 2011. CEO Tufan Erginbilgic confirmed the company's strong desire to return, preferably through a partnership. The core of this re-entry strategy is the UltraFan 30 engine development project, estimated to cost £3 billion (approximately $4 billion).
The company is actively seeking partners for this endeavor, with Erginbilgic stating they are talking to multiple parties, including engine makers and other entities. Airbus and Boeing, the two major airframers, are reportedly keen on Rolls-Royce's participation in the narrowbody market, viewing them as potential customers. Rolls-Royce has already invested over £1 billion into UltraFan development and plans to continue significant investment. They foresee ground testing a narrowbody-sized demonstrator with up to 30,000 pounds of thrust by 2028.
Erginbilgic has also clarified that Rolls-Royce is not seeking a government loan but rather grant funding through initiatives like the Aerospace Technology Institute (ATI) to support research and development. He emphasized that this type of government support for R&D is common among competitors, who often receive two to three times more funding. He views entering the narrowbody market as the single biggest opportunity for UK economic growth in the next 50 years, and the UK government has indicated its support for securing a UK engine position in future single-aisle programs.
Rolls-Royce believes the UltraFan technology positions them well for the next generation of narrowbody aircraft, with expectations for significant improvements in fuel burn compared to current engines and meeting customer expectations for 'time on wing.' Erginbilgic also expressed skepticism about open-fan technology, noting that while it might offer a 2-3% better fuel efficiency, the risks associated with changing the entire aircraft configuration and passenger acceptance are far greater compared to their next-generation ducted engines.
This strategic move comes as Rolls-Royce announced strong 2025 full-year results and upgraded its mid-term targets, including underlying operating profit of £4.9–5.2 billion, an operating margin of 18–20%, free cash flow of £5–5.3 billion, and a return on capital of 23–26% by 2028. The company expects an underlying operating profit of £4–4.2 billion in 2026, with free cash flow of £3.6–3.8 billion.
