Rolls-Royce announces Trent service network changes and new agreements with Approved Maintenance Centre joint ventures

Rolls-Royce has announced changes to three Approved Maintenance Centre joint ventures, simplifying the structure of two, and introducing a more competitive business model that will improve customer service. Approved Maintenance Centres (AMCs) support Rolls-Royce’s strategy to develop a competitive, capable and flexible Trent Service Network to meet the changing needs of customers across the lifecycle of engines and to support the growing Trent engine fleet. The changes relate to three existing AMC joint ventures: Hong Kong Aero Engine Services Limited (“HAESL”), Singapore Aero Engine Services Pte Ltd (“SAESL”) and N3 Engine Overhaul Services GmbH and Co. KG (“N3”). HAESL is currently a joint venture with Hong Kong Aircraft Engineering Company Limited and SIA Engineering Company Limited; SAESL is currently a joint venture with SIA Engineering Company Limited and Hong Kong Aero Engine Services Limited; and N3 a joint venture with Lufthansa Technik AG.
These joint ventures will now operate under a new business model where the existing geographic territory-based arrangements used by Rolls-Royce to direct maintenance, repair and overhaul (MRO) work to each AMC will be replaced with a competitive model where each AMC will need to compete to secure their Trent TotalCare engine overhauls. Rolls-Royce believes that this competitive model will encourage greater capability and flexibility across the Trent Service Network. The AMCs are also able to compete globally for MRO services under “time and material” business terms. These new agreements will also simplify the shareholding structure and management of HAESL and SAESL with each becoming 50/50 joint ventures with two shareholders (from three today). To support this change Rolls-Royce will increase its equity stake in HAESL and SAESL to 50% in return for an incremental investment of US$206.5m. The transactions are subject to certain closing conditions, including regulatory approvals.The shareholding arrangements with Lufthansa Technik AG for N3 remain unchanged at 50/50 ownership. These changes to create a competitive, capable and flexible Trent Service Network complement the recent announcement that Delta TechOps will be joining the Trent Service Network as an independent AMC. Additional AMCs to further enhance the Trent Service Network will be announced at the appropriate time.