Whatās Going On Here?Aircraft engine manufacturer Rolls-Royce said late last week that itās finally seeing signs of a recovery in big jet demand. What Does This Mean?Much of Rolls-Royceās revenue comes from the manufacture and servicing of engines for Boeing and Airbusās large aircraft. But since theyāre mostly used for international flights, and since itās those flights that have been slowest to recover from the pandemic, that segment of Rollsā business has been languishing. Now, though, there are signs of life, with recent reports suggesting that some airlines are thinking about putting in new orders for jumbo jets for delivery from 2025 onward. Airbus, for example, just said it might up production of its best-selling A350 jet sooner than expected, which means itāll be calling Rolls to work its magic. Why Should I Care?The bigger picture: This time, itās personal.
This shift in demand is a promising indication that the aviation industry is well and truly getting back on its feet. And thereās more: data from the International Air Transport Association (IATA) last week showed that international flights have been back with a vengeance this summer, with traffic 326% higher in May than the same time last year. So even though Chinese domestic traffic fell 73% on the back of its lockdowns, overall global traffic was nearly twice what it was in May 2021.
Zooming out: Rolls is the Tesla of the skies.
The aviation industry accounts for about 3% of global carbon emissions, with its emissions having risen 2% a year since 2000. If it carries on at this rate, the sector could account for a fifth of total emissions by 2050 (tweet this). So Rolls is looking into a solution: itās built a battery-powered plane that can fly at more than 300mph, while Siemens and Airbus are developing their own electric aircraft too. | 