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Rolls-Royce skips Airbus A320 re-engining contract

Company said it was "unable to construct an acceptable business case" for upgrading it

Rolls-Royce could potentially miss out on sales worth billions of dollars over the next two decades after Airbus announced plans to upgrade its workhorse A320 aircraft and the aircraft engine maker decided not to take part in the re-engining, the Times reported.

Airbus said it will offer airlines the A320 with more fuel-efficient engines supplied either by United Technologies Corp's Pratt & Whitney unit or by CFM International, a joint venture between General Electric Co and Snecma SA. The new engines would reduce fuel consumption and carbon emissions by about 15 per cent.

Rolls-Royce, which supplies the existing engine for the A320 in partnership with Pratt & Whitney, said it was "unable to construct an acceptable business case" for upgrading it and "elected not to participate in the A320neo (new engine offering)," the Times said.

Rolls-Royce, however, is mulling a "revolutionary new design" in the next decade to re-enter the single-aisle market while Boeing and Airbus introduce entirely new versions of their aircraft, probably in the 2020s.

Single-aisle, short-haul jets are favoured by most airlines. By 2029, the engine market alone could be worth between $400bn and $500bn with 21,000 single-aisle aircraft estimated to be built over the next two decades.

Meanwhile, trade analysts surmise that Boeing may have to slash the price of its 737 to retain market share against the more fuel efficient A320neo.