Re Agreement

20 July, 2004

       IBERIA AGREES TotalCare DEAL WITH ROLLS-ROYCE FOR TRENT 500 FLEET       

Rolls-Royce announced today (20 July) that Iberia had signed a 12-year
TotalCare agreement extending maintenance cover for the Trent 500 engines which
power its fleet of Airbus A340-600 aircraft.

Speaking at the Farnborough Air Show, Charles Cuddington, Managing Director,
Airlines at Rolls-Royce, said: "This underlines the fleet-wide attraction of
TotalCare which has been chosen by all eight current Trent 500 operators to
cover their maintenance needs.

"Iberia's decision to extend an existing TotalCare contract clearly shows that
these agreements deliver the type of service the customer wants. TotalCare
places the responsibility for engine health in the hands of the original
manufacturer, and allows the airline to concentrate on passengers as its core
business."

Today's announcement involves a services package for the engines on all the
A340-600s for which Spain's flag-carrier has placed firm orders, and includes
the extension of an earlier TotalCare contract which covered the first three
aircraft delivered.

Around 60 per cent of all Trent engines are handled through TotalCare
contracts, which are based on an agreed dollar rate per flying hour. Half of
all Rolls-Royce earnings currently come from aftermarket-related services.

The Trent 500 is the sole powerplant for growth versions of the four-engined
A340 which have been ordered by 13 customers. A 53,000lb thrust version powers
the ultra-long-range A340-500 while a 56,000lb thrust variant is used on the
higher capacity -600 aircraft.

In June, an A340-500 set world time and distance records for a non-stop
commercial route by flying from Singapore to New York in 18 hours 18 minutes.

This month the Trent 500 fleet world wide celebrates its second anniversary in
service, and recently passed the landmark of half a million flying hours.

Corporate note to editors

Rolls-Royce operates in four global markets - civil aerospace, defence
aerospace, marine and energy. It is investing in technology and capability that
can be exploited in each of these sectors to create a competitive range of
products.

The success of these products is demonstrated by the company's rapid and
substantial gains in market share over recent years. The company now has a
total of 54,000 gas turbines in service worldwide. The investments in product,
capability and infrastructure to gain this market position create high barriers
to entry.

Rolls-Royce has a broad customer base comprising more than 500 airlines, 4,000
corporate and utility aircraft and helicopter operators, 160 armed forces and
more than 2,000 marine customers, including 50 navies. The company has energy
customers in nearly 120 countries. Rolls-Royce employs around 35,000 people, of
which 21,000 are in the UK. Forty percent of its employees are based outside
the UK - including 5,000 in the rest of Europe and 8,000 in North America.

The large installed base of engines generates demand for the provision of
services. A key element of the company's strategy is to maximize services
revenues, which have increased by 60 percent over the past five years, by the
provision of a comprehensive portfolio of services.

Annual sales total nearly £6 billion, of which 50 percent are services
revenues. The order book is over £18 billion, which, together with demand for
services, provides visibility as to future activity levels.

For further information contact:

Martin Johnson

Rolls-Royce Communications

Chalet: D1-4

Stand: Hall 4, G10

[e-mail]

Tel: [phone]

Fax: [phone]

Office: (Derby): 44 (0)1332 269911