Emirates chooses Rolls rival's engine

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Rolls-Royce suffered a setback yesterday after one of its most loyal airline customers selected a rival engine supplier to power its new fleet of Airbus superjumbos.

The Dubai-based carrier Emirates said it had decided to place the $1.5bn (£1bn) order with the Engine Alliance, a joint venture between the two US manufacturers General Electric and Pratt & Whitney.

Emirates' fleet of 22 Airbus A380 aircraft will be powered by the Engine Alliance's GP7000 engine. The airline also has options to buy a further 10 A380s.

Rolls said it was "obviously disappointed" that its Trent 900 engine had lost the contest. But a spokesman said it still had a 57 per cent share of engine orders so far announced for the A380, worth around $2.5bn. The customers for the Trent 900 include Singapore Airlines, Virgin Atlantic and Qantas.

Analysts at HSBC in London interpreted the loss as meaning that Rolls-Royce was not willing to do deals that don't pay, however. "Loss of the Emirates order implies [that] market share is not at any price," the bank said in a research note.

Shares in Rolls ended the day down 0.5p at 161p, better than an intra-day low of 154.5p following Emirates' announcement at the Singapore air show.

Emirates' fleet is powered almost exclusively by Rolls' engines. But its chairman Sheikh Ahmed bin Saeed Al Maktoum said that after "exceptionally exhaustive" studies of the rival A380 engines it has decided the GP7000 best suited its needs.