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Rolls Royce Plants Set for 2-week Summer Shutdown

Engineering firm Rolls Royce is considering closing down its jet engine factories for two weeks in summer 2021 in a bid to reduce costs and shore up flagging profits. The aeronautical manufacturer has been hard-hit by the Covid-19 pandemic, as commercial airlines have vastly scaled back operations.

The shutdown will affect Rolls Royce’s civil aviation sector, but not the defence or energy sectors, according to a report on the BBC News website. Dates have not been finalised, and the company is still in negotiations with trade unions. It has described the current state of the consultations as “complex and constructive.”

Rolls Royce has not only seen existing orders cancelled and a slump in new orders, but as fewer jets are in the air, the demand for servicing and replacement parts has also nosedived. The company receives payment for the number of hours its engines are in use, so the travel restrictions have hit it especially hard.

Losses are expected to be double that of original forecasts, as the new Covid-19 variants took hold and forced another prolonged lockdown. The engineering firm is expected to lose £2bn this year, leading to the drive to create a 10% efficiency improvement. The two-week shutdown will save millions of pounds in wages.

The company has avoided blanket use of the furlough schemes, as some areas of the business are still operating as normal. The summer shutdown is expected to impact on 12,500 workers in the UK, who will lose 2 weeks’ worth of wages. The cuts are expected to be staggered throughout the summer to minimise the financial hit for workers.

A company spokesperson said: “We are continuing to use the UK Government Coronavirus Job Retention Scheme – and similar schemes elsewhere in the world – across areas of Civil Aerospace where workload has significantly reduced as a result of Covid.”

“However, unilaterally claiming furlough for all employees across the UK Civil Aerospace business in a pre-planned way is not consistent with the intent – nor is it, we believe, within the spirit – of the scheme, as workload is not impacted across all areas.”

Rolls Royce’s engine flying hours are 55% of what they were in 2019. Despite the efficient rollout of the UK vaccination programme, the overseas travel industry looks very uncertain as government ministers advise against booking foreign holidays this year. The UK is expected to see a boom in ‘staycations’ during 2021.

Furthermore, strict new quarantine rules for travellers to the UK have been put in place, in an effort to quell the spread of new Covid-19 variants from abroad, which threaten to undermine the success of the vaccination scheme. 

Even if the UK succeeds in its aim for all over 50’s to be offered a vaccine by May, the freeing up of overseas travel depends on the rates other countries rollout their own vaccination programmes. Currently, about 22% of the UK population have received the first dose of the vaccine, compared with 10.4% in the US and 3.5% in Greece.

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