Rolls-Royce’s civilian large-engine flying hours are gradually increasing, but remain around a third below pre-crisis levels, the company has revealed.
Flight hours reached 65% of 2019 levels in the four months to the end of October and 62% for the year so far.
Rolls-Royce says this is the result of an “uneven recovery” with a stronger rebound in US and European markets than in Asia, and China in particular.
Engine deliveries and shop visits were higher than last year, but at the lower end of the expected range.
But Rolls-Royce expects higher volumes of large aftermarket engine sales this year and in coming years, compared to the normal level of 10-15% of original equipment deliveries.
The company says this will expand the pool of spare engines to “support fleet health and improve resiliency.”
These spare engine sales and improved flying hours will result in “strong cash conversion”, he adds, and Rolls-Royce expects operating cash to “comfortably exceed” its operating profit in the medium term. .
Rolls-Royce also says its margins on long-term service contracts are supported by inflation-linked customer contracts.
Outgoing chief executive Warren East points to the recent completion of Rolls-Royce’s sale of Spanish company ITP Aero, which saw the company repay £2bn of debt.
“This marks an important step in restoring the strength of our balance sheet” and a clear milestone on our path to medium-term investment grade,” he said.
East adds that the improvement in the civil aerospace sector, as well as the performance of other Rolls-Royce businesses, gives the company “confidence in the future”.
Rolls-Royce is also an aerospace partner in six projects recently approved for funding under the European Union’s Clean Aviation initiative for decarbonisation.