Rolls-Royce Holdings PLC (LSE:RR.) shares were boosted on Tuesday as deals flew at the Paris Air Show and boss Tufan Erginibilgic hinted toward a return to the narrow-body jet market.
Rolls-Royce is developing a new “scalable” engine, known as the Ultrafan, which Erginibilgic confirmed could be used on smaller aircraft, though this is not expected to be rolled out before 2030.
“I believe this positions us well to participate in narrow-body if and when it comes,” he told reporters at the event on Tuesday.
"The demonstrator is working really well,” he added, “we did it intentionally so that we can actually scale down all the way to narrow-body”.
Eginibilgic also hinted Rolls-Royce could enter a partnership to get back into the market, with the firm having previously worked alongside Pratt & Whitney from 1983 to 2011 on Airbus A320 engines.
Rolls-Royce is a key player in the wide-body commercial airline market, offering engines to power the likes of Boeing 777s, 787s and Airbus A330s and A380s.
However, the FTSE 100-listed manufacturer does not offer engines for narrow-body jets used by short-haul carriers like Ryanair Holdings PLC (LSE:RYA) and easyJet PLC, with previous chief executive Warren East simply blaming a lack of opportunity.
Already-established partnerships between the likes of General Electric (NYSE:GE) and French firm Safran have also made it difficult for Rolls-Royce to enter the market, JP Morgan said.
The narrow-body market has boomed in recent years, especially so since the pandemic, with Airbus Group (EPA:AIR) penning a record order for 500 A320 variants at the air show on Monday.
As the short-haul sector has neared recovery from the effects of Covid-19, long-haul carriers have trailed behind, marking a blow for Rolls-Royce which is paid based on engine flying times.
Despite a flurry of orders for narrow-body jets being signed at the Paris air show on Monday and Tuesday, Rolls-Royce has also penned several of its own deals.
The manufacturer will continue to provide engine support for Tunisair and Egyptair-operated Airbus A330s under deals signed on Monday.
A host of orders between The Boeing Company (NYSE:BA) and airlines could also benefit Rolls-Royce, with the 787 Dreamliners being sold able to be powered by the company’s Trent 1000 engines.
Rolls-Royce shares climbed 2% to 156.8p.