Rolls-Royce sells about 90% of its Trent engines with aftermarket-support packages, and this has contributed to criticism over the past several years that it has a more-closed aftermarket network than competitors. In the last month, however, it has announced changes to try to dispel the anti-competitive concerns.
Today its three approved maintenance centers (AMCs) are assigned work based on geographic territory—but going forward, Rolls will have them compete to secure Trent TotalCare engine overhauls. The engine OEM thinks this new business model will foster great competition, capability and flexibility across its network.
The three centers—all of which are joint ventures (JVs)—include Hong Kong Aero Engine Services Ltd., (HAESL), Singapore Aero Engine Services (SAESL); and N3 Engine Overhaul Services.
HAESL, a JV between Rolls and the Hong Kong Aircraft Engineering Co. (Haeco), and SAESL, jointly owned by SIA Engineering Co. (SIAEC) and HAESL, will now have two owners instead of three. To accomplish this, Rolls is acquiring SIAEC’s 10% stake in HAESL, and Rolls and HAECO will each take another 5% stake in the business. Rolls will also acquire HAESL’s 20% stake in SAESL.
This means both HAESL and SAESL will become 50/50 JVs, requiring Rolls-Royce to invest an additional $206.5 million in the businesses.
Rolls says these changes will streamline the shareholding structure and management of the entities, which should simplify them. These transactions will require typical closing conditions and regulatory approvals.
N3 already is a 50/50 JV with Lufthansa Technik, so that ownership remains intact.
Rolls and SIAEC also own the International Engine Component Overhaul (IECO) JV in Singapore. As part of the changes announced on Nov. 23, the companies plan to merge IECO and SAESL into a single operation.
The AMC changes follow the announcement in October that Delta TechOps will join the Trent service network as an independent AMC (Aviation Daily, Oct. 27). Delta will build a new engine shop and test cell that should be open in 2019.
Trent XWB and 7000 engines will power Delta’s Airbus A350 and A330neo aircraft.
Rolls-Royce says its aftermarket-network changes are not linked at all to the European Commission’s (EC) concern about anti-competitive conditions for engines and their components. Rolls was one of many companies that received a questionnaire from the EC looking into anti-competitive behavior (Aviation Week & Space Technology, Oct. 20).
The changes are “entirely driven by the need to have a more competitive and capable Trent Service Network as Trent engine fleet grows,” Rolls-Royce spokesman Bill O’Sullivan said.
Rolls also provides Trent engine services at its wholly owned facility at Derby in the U.K.