ROLLS-ROYCE FLEET ENGINE HOURS INCREASE

Paris Air Show, 17 June 2003

         ROLLS-ROYCE FLEET ENGINE HOURS INCREASE, BUCKING GLOBAL TREND         

Rolls-Royce said today (17 June) that despite the challenges still facing the
civil aerospace industry, its own fleet had grown to 10,000 engines and
witnessed an increase in flying hours.

Against a backdrop of a two per cent fall in global flying hours during 2002,
Mike Terrett, President - Civil Aerospace, Rolls-Royce said the company's civil
fleet had seen its flying hours increase by seven per cent in 2002.

At a Paris Air Show briefing, Terrett acknowledged the pressures on the
industry and said Rolls-Royce civil engine deliveries had experienced order
deferrals as a result of the SARS virus. But a continuing level of order
activity had ensured Rolls-Royce had further established itself as the clear
number two aero engine manufacturer, with a 30 per cent share of the civil
market, averaged over the past three years.

This included winning more than half the engine business on latest widebody
aircraft, where firm and option orders for the Trent series totalled 1,670
engines from 40 customers.

'Our business model, based on a growing installed base and expanding activities
to support our customers' operations, is continuing to deliver. Aftermarket
services are a growing part of Rolls-Royce business - in 2002 they contributed
44 per cent of total company revenues - and that is certainly reflected in
civil sector trends. For instance, 60 per cent of the Trent fleet is currently
managed through long-term TotalCare service contracts, and that percentage is
even higher in our BR715 and AE 3007 regional jet programmes.

'We have added to our network of aftermarket facilities with the recent
announcement of N3 Engine Overhaul Services - a joint venture with Lufthansa
Technik - which strengthens our links with Lufthansa, whose new Airbus widebody
fleet will be totally Rolls-Royce powered.'

He emphasised the on-going changes within the Rolls-Royce Civil Aerospace
business itself, highlighting the drive for greater operational efficiency with
discussions already underway with the workforce covering such proposals as
extended build lines and a new repair and overhaul facility at Derby.

Commenting on the Trent 900, launch engine for the Airbus A380, Terrett said
testing, which began in March, had validated earlier predictions, with the
first development engine running at 25 per cent above its required
service-entry thrust levels within three weeks of being installed on the test
bed.

'Even at this stage, three years before it enters service, the Trent 900 is
demonstrating the value of the derivative development approach which allows us
to incorporate the best features of earlier Trent family experience. This
delivers latest technology benefits at the lowest level of risk.'

Terrett revealed that discussions with Boeing on the proposed 7E7 programme had
included ideas on expanding current thinking on support contracts to include
new forms of comprehensive, long-term service agreements.

'We believe there are new business models based on a services-driven approach
which would add significant value to 7E7 customer operations. Rolls-Royce has
developed this aspect of its business consistently in recent years and there is
certainly scope for further innovation.'

Terrett said the unique Rolls-Royce three-shaft design would again be at the
heart of a potential Trent `7E7' which would draw on the company's Vision10
technology acquisition programmes to deliver further improvements in thrust to
weight ratio, low noise and emissions characteristics and simplified build
through reduced parts count.

The Trent `7E7' would also feature advanced engine health monitoring software
as part of an emphasis on a 'services approach to design'.

For further information contact:

Neil Williams

Rolls-Royce Media Centre

Chalet B 48

Tel: + 33 (0) 1 4157 4875 / Fax: 4894

Email: [e-mail]

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