Earlier this decade, Rolls-Royce CEO Warren East indicated that the company needed to offer better aftermarket products for operators of mature engines, and since then the OEM has had some success with its TotalCare Flex product.
The latest deal is with Air Canada, which has signed up to Flex to support the Trent 700 engines that power its Airbus A330s, is the first contract of its kind for the engine type.
Air Canada operates 10 Trent-powered A330-300s, the oldest of which is nearing 20 years in services.
This makes it an ideal candidate for TotalCare Flex, which offers tailored workscopes and cost reduction elements such as used serviceable material and custom repairs for the Trent 500, 700 and 800 engines..
There are roughly 1,700 Trent 700s in service, and Aviation Week predicts numbers will peak at roughly that level next year, the last year of Trent 700 production as Rolls-Royce focuses its efforts on the Trent 7000.
Nonetheless, the engine remains vitally important for the OEM’s maintenance sales.
The manufacturer reported a 25% increase in maintenance demand from 2016-18, and expects another 25% rise in the next decade. Aviation Week estimates that the Trent 700 MRO market will be worth almost $1.3 billion in 2021.
Also important is the fact that maintenance work on older engines tends to be a higher-margin business. Many Trent 700 operators have completed any long-term service deals they agreed with Rolls-Royce on a cost-per-flight-hour (CPFH) basis, and have moved on to old-fashioned time-and-materials contracts. These often make more sense for mature engines with limited life remaining, and they also benefit the manufacturer.
Trent 700 service sales also help offset the costs of newer engine programs. On Aug. 22, Air New Zealand reported a pre-tax profit 11% lower than its January guidance, a shortfall it blamed partly on “network disruption resulting from the global Rolls-Royce Trent engine issues.”