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Rolls-Royce Signs Service Agreement with Taiwan's Flag Carrier

Rolls-Royce Secures Long-Term Engine Service Agreement with Taiwan’s China Airlines
Rolls-Royce has formalized a significant long-term maintenance contract with China Airlines, Taiwan’s national carrier, reinforcing its dominant position in the long-haul aircraft engine sector. Announced on Wednesday, the agreement is anchored in Rolls-Royce’s TotalCare service model and encompasses 36 Trent XWB engines that power 18 Airbus A350 aircraft within the airline’s fleet.
Strategic Growth and Revenue Stability
The contract stipulates that Rolls-Royce will provide maintenance for 30 Trent XWB-97 engines installed on 15 A350-1000 aircraft, as well as six Trent XWB-84 engines for three A350-900s. Notably, the Trent XWB-97 is the exclusive engine for the A350-1000, ensuring a consistent and high-margin revenue stream for Rolls-Royce throughout the operational lifespan of these aircraft.
TotalCare, a pivotal element of Rolls-Royce’s business strategy, operates on a fixed fee per engine flight hour basis, with the manufacturer assuming full responsibility for maintenance and spare parts. This approach guarantees predictable cash flow and underpins the company’s ongoing transformation initiatives.
This agreement with China Airlines adds to a series of recent successes for Rolls-Royce in the Asia-Pacific region, which is anticipated to be the fastest-growing aviation market over the coming decade. Earlier this year, Malaysia Airlines placed an order for 20 Airbus A330neo aircraft, securing 40 Trent 7000 engines from Rolls-Royce. These developments underscore the company’s expanding presence in a region where demand for maintenance, repair, and overhaul (MRO) services is rapidly increasing.
Challenges Amid Competitive Pressures
Despite these achievements, Rolls-Royce faces challenges in maintaining competitive pricing for its service agreements. Some airlines have criticized engine manufacturers for capitalizing on ongoing supply chain disruptions, placing pressure on Rolls-Royce to balance profitability with customer satisfaction. The company’s strong financial performance has propelled its shares to record levels, buoyed by robust results in its power systems and defense divisions, yet this success also raises expectations for sustained delivery.
Competitors are expected to respond with strategic initiatives aimed at securing similar service contracts in the Asia-Pacific market, intensifying competition within the lucrative MRO sector.
Operational Enhancements and Market Outlook
Rolls-Royce is actively working to restore confidence among operators of its Trent 1000 engines, which power the Boeing 787 Dreamliner. The introduction of new high-pressure turbine blades is designed to double engine service life and address previous durability concerns.
Investor attention is now focused on the company’s full-year 2025 financial results, scheduled for release in late February. Management has projected an underlying operating profit between £3.1 billion and £3.2 billion, with free cash flow expected to reach £3.0 billion to £3.1 billion. These forecasts reflect progress under CEO Tufan Erginbilgic, who has emphasized operational efficiency and margin enhancement.
As Rolls-Royce continues to expand its service footprint across Asia-Pacific, the industry will closely monitor whether the company can sustain its positive momentum amid intensifying competition and evolving customer expectations.

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