LONDON - Rolls-Royce is closing in on a deal to secure up to $260 million (£200 million) in British taxpayer subsidies to support the development and testing of a demonstrator model for its new UltraFan 30 engine. Funding is expected to be allocated via Britain’s Aerospace Technology Institute, marking a major milestone in Prime Minister Andy Burnham’s push to reindustrialize the country. The financial package aims to help the FTSE 100 manufacturer re-enter the lucrative short-haul narrow-body aircraft market - a sector it exited more than a decade ago - competing directly for next-generation Airbus and Boeing supply contracts expected by the end of the decade.
The potential agreement follows more than a year of negotiations and pressure from Rolls-Royce, which previously warned it could move engine production to Germany if state support was not forthcoming. Chief Executive Tufan Erginbilgic has highlighted the project as a transformative opportunity that could generate as much as $155 billion (£120 billion) for the UK economy and create up to 40,000 skilled jobs across the supply chain, while noting that international competitors routinely receive substantial government backing. Although timing remains subject to final talks, an official announcement could be made as early as next week.
