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Rolls Royce jet engine price hikes not impeding sales amid high demand, exec says

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Rolls investing £1 billion in engine improvements

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Customer Thai Airways this month chose competitor's engines

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Exec: 12% maintenance price hikes last year not impeding sales

By Lisa Barrington

SINGAPORE, Feb 21 (Reuters) - Price increases for Rolls-Royce aircraft engines are not impeding sales, a senior executive told Reuters on Wednesday, amid huge industry-wide demand for new aircraft and engines.

"Pricing has been up across the industry. But we also had a record year of sales ... It's certainly not having an impediment," said Ewen McDonald, the company's chief customer officer for civil aerospace, on the sidelines of the Singapore Airshow.

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Britain-based Rolls-Royce in November said it would quadruple profit over five years by boosting jet engine performance and cutting costs.

The biggest driver of profit would be a step change in margins in an engine business that powers nearly half of long-haul aircraft, including all Airbus A330neo and A350 models and some Boeing 787 planes.

This included a 12% engine maintenance price increase.

Long-standing customer Thai Airways this month chose competitor GE to provide engines for 80 new Boeing 787s, following what sources have said were disagreements over pricing.

"Thai is a big customer for Rolls Royce. They will continue to be," McDonald said. "You win some, you lose some."

Rolls in November was criticised by Emirates Airline President Tim Clark over the durability of the XWB-97 engine in hot and dusty conditions, saying it must improve before Emirates would buy Airbus A350-1000s.

Rolls Royce last year said it would invest more than 1 billion pounds ($1.26 billion) in improving its four Trent engine types.

McDonald said by 2028 the time the XWB-97 can stay on a plane before overhaul in the harshest environments - such as the hot and sandy conditions of Emirates' base in Dubai - will have doubled.

In normal operating conditions the time before overhaul will increase by 50%.

Global demand for air travel led to a near-full recovery to pre-pandemic levels in 2019, but the industry has been struggling with severe shortages of parts, labour and new aircraft.

"The constraint at the moment is how many aircraft can be built," said McDonald. "People are ordering further and further out because they're worried they won’t be able to get any new aircraft to support their growth."

Rolls-Royce has in recent months started to say it would potentially return to making engines for single-aisle planes, which are currently split between RTX's Pratt & Witney and CFM International, a joint venture between Safran and GE.

"We will be interested in opportunities on narrow-body," McDonald said, but the company is waiting to see what aircraft builders require for future designs. ($1 = 0.7924 pounds) (Reporting by Lisa Barrington; Editing by Sharon Singleton)