...November 25, 2024 Commercial aerospace supply chain bottlenecks will continue to weigh on Rolls-Royce's improving operational performance, lengthening engine servicing and shop visit times. However, we believe that this does not present material short-term risk to Rolls-Royce's credit quality given its generally solid operating performance. Supply chain challenges are prevalent across the entire commercial aerospace industry and will persist through 2025 and beyond. Rolls-Royce is feeling the effect most acutely on its Trent 1000 engine, one of the two engine options for the Boeing 787 Dreamliner (the other being the General Electric GEnx). Rolls-Royce's market share of the Boeing 787 is about 25%, with around 744 engines currently in service. Management has implemented plans to mitigate some of the challenges, using a workforce from across the wider group to improve shop-visit times. One key supplier currently has about 50 Rolls-Royce supply chain staff dedicated to driving improvements,...
