Key Points:

  • Rolls-Royce CEO Tufan Erginbilgic expressed skepticism about hydrogen's role in aviation within the next two decades, focusing instead on sustainable aviation fuel (SAF).

  • The company has announced plans to divest its electrical business that develops propulsion systems for aircraft, including flying taxis.

  • Despite the aviation industry's push to decarbonize, Rolls-Royce's strategy diverges from Airbus SE's vision of hydrogen-powered planes by 2035.

Rolls-Royce's Strategic Shift in Engine Technology

LONDON — Rolls-Royce, a key player in the aviation industry, is steering its focus away from electric and hydrogen-powered aircraft, betting on the continued dominance of conventional propulsion systems for the next twenty years. Tufan Erginbilgic, the company's Chief Executive Officer, shared his perspective in a media call on Tuesday, expressing skepticism about the significant role of hydrogen in aviation in the near future. Despite ongoing collaborations with EasyJet on hydrogen technology, Erginbilgic firmly believes that sustainable aviation fuel (SAF) will be the primary means for large jets to achieve net zero climate targets.

Erginbilgic's stance reflects his vision to substantially increase operating profits and improve cash flow in the medium term. This strategic direction is noteworthy, especially as the aviation sector faces growing demands to reduce its carbon footprint. Airbus SE, the world's leading aircraft manufacturer, contrasts Rolls-Royce's approach by investing in hydrogen-powered planes, anticipated to be operational by 2035.

Divestment and Resource Reallocation at Rolls-Royce

In a significant business move, Rolls-Royce revealed plans to sell off its electrical business unit, responsible for developing propulsion systems for various aircraft, including flying taxis. According to Erginbilgic, this decision is rooted in the need for judicious resource allocation, asserting that the electrical business would yield greater value under new ownership. The British enginemaker's shift in strategy represents a pivotal moment for Rolls-Royce, as it recalibrates its focus towards more immediate and viable pathways to achieving sustainable aviation.