Chairman's Statement

Rolls-Royce PLC
18 June 2001

                                                                  17 June 2001



            ROLLS-ROYCE FORECASTS $465BN CIVIL AERO ENGINE MARKET

Rolls-Royce plc today (June 17) said strong growth will continue in both major
(100 seats and over) and regional aircraft sectors, in addition to the
corporate jet market, resulting in a demand for more than 100,000 civil aero
engines over the next two decades. The forecast's calculations include spare
engines but not spare parts.

'This total business is worth an estimated $465 billion and the forecast shows
continuing and growing demand across civil aerospace markets. Rolls-Royce is
well positioned to compete in all sectors. These predictions assume that the
airline industry will continue to be liberalised, without constraints imposed
on its ability to offer new services,' Chairman Sir Ralph Robins said today at
the Paris Air Show.

Compared with the previous Rolls-Royce civil aerospace market forecast, the
new statistics predict demand for 17,000 more engines, resulting in additional
revenues of approximately $117 billion. The expectations of stronger growth
and increased liberalisation in Asian markets are among the reasons for the
increase.

With annual traffic growth estimated at 5.1 per cent, global passenger numbers
are expected to double within the period of the forecast. Asia Pacific will
have the highest growth rate at seven per cent, and by 2020, a third of world
traffic will be carried by airlines in that region.

Using data from a variety of industry sources, including input from the
world's leading airlines, Rolls-Royce predicts that the strong growth in the
market for aircraft of 100 seats and over will require 71,000 engines with a
market value of $415 billion between now and the year 2020.

Sir Ralph said: ' This will build on a year of real achievement for the Trent
engine family.

'The Rolls-Royce Trent 500 engines powering the Airbus Industrie A340-600 at
the Paris Air Show highlight a year of achievement for the Trent engine
family. In the 12 months since Farnborough 2000, Rolls-Royce has added seven
new airlines to its Trent family of customers and operators, formally launched
the Trent 900 and certificated the Trent 500 ahead of schedule.'

The forecast for corporate jets over the next 20 years estimates the need for
30,000 engines worth $50 billion. The introduction of 24 new aircraft types in
this sector in the last five years has been made possible largely by modern
engines such as the AE 3007, BR710 and Williams-Rolls FJ44.

The demand for large aircraft plus growing regional fleets will mean an
estimated 29,000 new planes in those sectors - almost 11,000 to replace
retired aircraft, and the remainder to satisfy market growth. Freighters
account for nearly 1,000 aircraft, reflecting anticipated growth in cargo
traffic of 6.5 per cent a year. The corporate jet market is expected to
generate orders for 14,000 aircraft.

The largest sector of the forecast measured by engine deliveries is the
22,000lb - 45,000lb thrust category which includes Airbus A320 series, Boeing
737 and Boeing 757 aircraft. The dominant portion of the market in terms of
value, however, is expected to be for engines of 65,000lb thrust and above,
powering Airbus A330, A380 and Boeing 777 airliners.

Because of insufficient data, the forecast does not include an estimated
requirement for proposed new-generation near-supersonic or transonic aircraft
although the general assumption is that they would operate long-haul services,
so reducing the anticipated numbers of widebodied aircraft in that sector.

Sir Ralph said there had been a number of milestones in the company's defence
business - the most recent being last week's maiden flights of two helicopters
powered by the T800 engine developed by LHTEC (Light Helicopter Turbine Engine
Company), a Rolls-Royce and Honeywell consortium. The Boeing Sikorsky RAH-66
Comanche prototype flew on June 6 and the Agusta Westland Super Lynx 300
demonstrator made its maiden flight six days later, on June 12.

Another defence milestone in the past year has been the progression of the
EJ200 engine programme from development to production.

'This engine, which powers the Eurofighter Typhoon aircraft, will form the
backbone of a strong defence business over the coming years as it progresses
towards full output. By 2003, we expect to achieve annual deliveries of 100
engines,' he said.

In addition, Rolls-Royce continued its participation in each aircraft and
engine configuration for the UK/US Joint Strike Fighter programme. Both
prototypes made their first flights in 2000 and Boeing and Lockheed Martin are
now working on the STOVL flight programme. Rolls-Royce has also secured a
leading position on the TP400 engine for the new transport aircraft, the
A400M.

For further information please contact:

Tim Blythe, Director - Corporate Communications

Rolls-Royce Media Centre at the Paris Air Show [phone]

Rolls-Royce Corporate Communications [phone]

Website: www.rolls-royce.com