Re Agreement

11 December, 2007

               CHINA AIRLINES SELECTS ROLLS-ROYCE FOR A350 XWBs                

Following the signing of a Letter of Intent (LOI) with Airbus, Taiwan's China
Airlines has selected Rolls-Royce Trent XWB engines for 14 firm and six option
Airbus A350 XWB twinjets.

If all the options are exercised, the business, at engine list prices, is
potentially worth around $800 million. Deliveries start in 2015.

This is the first time Rolls-Royce has been chosen as an engine supplier by
China Airlines. The announcement also marks the debut of the Trent series in
Taiwan.

Chairman of China Airlines, Ringo K.S. Chao, said: "As the latest member of its
impressive Trent engine family, we are very happy to have chosen the
Rolls-Royce Trent XWB. Its advanced technologies and high operating efficiency
will make it an outstanding addition to our fleet. This also translates into
significant improvements in environmental performance, which will allow us to
meet targets for reducing emissions".

Mark King, President, Civil Aerospace, Rolls-Royce, added: "We look forward to
establishing a long and rewarding relationship with China Airlines. Rolls-Royce
attaches importance to the Taiwan market, and China Airlines leads the way,
having earned a deserved reputation as a forward-looking and innovative
carrier."

Announced orders for the programme, including spare engines, now total over 800
Trent XWBs with 13 customers.

The Trent XWB is available in a range of thrusts from 74,000 to 92,000 lb, and
a single engine type will power all versions of the A350 XWB.

Final engine configuration and selection of technologies for the Trent XWB are
scheduled to be completed by mid-2008 leading to the start of ground-testing in
2010. A flying test bed programme will begin the following year, followed by
airworthiness certification and first flight on the A350 XWB in 2012.

By the time the Trent XWB enters service, Trent series engines will have
accumulated more than 75 million flying hours.

NOTE TO EDITORS

 1. Rolls-Royce, a world-leading provider of power systems and services for use
    on land, at sea and in the air, operates in four global markets - civil
    aerospace, defence aerospace, marine and energy.
   
 2. It continues to invest in core technologies, products, people and
    capabilities with the objective of broadening and strengthening the product
    portfolio, improving efficiency and enhancing the environmental performance
    of its products. These investments create high barriers to entry.
   
 3. The company has established strong positions within programmes that will
    shape the power-systems market for many years to come.
   
 4. The success of its products is demonstrated by rapid and substantial gains
    in market share. The company now has a total of 54,000 gas turbines in
    service worldwide and they generate a demand for high-value services
    throughout their operational lives.
   
 5. The company seeks to add value for its customers with aftermarket services
    that will enhance the performance and reliability of its products. Services
    revenues have grown by 10 per cent per annum compound over the past 10
    years.
   
 6. Rolls-Royce has a broad customer base comprising 600 airlines, 4,000
    corporate and utility aircraft and helicopter operators, 160 armed forces,
    more than 2,000 marine customers including 70 navies, and energy customers
    in 120 countries. Rolls-Royce is a technology leader, employing 38,000
    people in offices, manufacturing and service facilities in 50 countries.
   
 7. Annual sales total £7.4 billion, of which 53 per cent are services
    revenues. The firm and announced order book is £26.1 billion, of which
    aftermarket services represent 38 per cent, providing visibility of future
    levels of activity.
   
For further information:

Mark Alflatt
Director - Financial Communications
Tel: [phone]