Rolls Royce Burns 3 billion Pounds
Aircraft engine manufacturer Rolls-Royce burned as much as 3 billion pounds in the first half as the hours flown by its engines halved due to the COVID-19 pandemic situation, the British company expects a further 1-billion-pound outflow in the second half of 2020. The British company, which currently makes aircraft engines for both Airbus and Boeing said the flying hours fell as much as 75 percent in April, May and June. However, it has seen a marginal improvement after June.
The CEO of the organization said the British company had started reviewing options for strengthening its balance sheet, and it had 8.1 billion pounds at hand even after the first-half outflow.
“The COVID-19 pandemic has created a shock across the entire civil aviation industry,” East told reporters on Thursday.
“Across the first half of this year, widebody engine flying hours, which we get paid for under our servicing contract, were half of what they were last year.”
The company has announced at-least 9000 job cuts in it’s civil aviation business on the wake of COVID-19 pandemic. However, its defence business is resilient, while the power systems has been impacted in part.
According to analysts at JP Morgan, Rolls Royce needs to issue as much as 6 billion pounds of equity in order to ensure its future. “If there is a second wave of COVID-19 or a slower than hoped for recovery then it is very possible, in our view, that the UK government will need to step in to save Rolls-Royce,” they said.
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