ROLLS-ROYCE WELCOMES AIRTANKER SELECTION

Monday 26 January, 2004

ROLLS-ROYCE WELCOMES AIRTANKER SELECTION

Rolls-Royce today welcomed the decision by the Ministry of Defence (MoD) to
enter detailed discussions with AirTanker on proposals for its Future Strategic
Tanker Aircraft (FSTA) programme. 

Rolls-Royce is a shareholder in the AirTanker consortium and will manufacture
the Trent 772B engines to power the fleet of Airbus A330-200 tanker aircraft,
as well as providing life support for the engines over the 27-year contract.
The Rolls-Royce programme will be managed from the company's Defence Aerospace
headquarters in Bristol, with the engines being assembled and tested at the
Derby facility. Components for the Trent engines will be manufactured
throughout the Rolls-Royce UK supply chain.

Commenting on the selection of AirTanker, John Boughton, Director of Customer
Business for Rolls-Royce Defence Aerospace, said:   

"Rolls-Royce is pleased that AirTanker has been identified as offering the best
value of the two FSTA bids and we look forward to a successful conclusion of
negotiations. Our role in this programme will extend well beyond manufacturing
and supporting the Trent engines for the Airbus A330s, because as a shareholder
in AirTanker we will also be involved in the total service provision for the
27-year duration of the contract. This makes it of huge importance not just to
Rolls-Royce in Bristol and Derby but to the company as a whole and its global
supply chain and marks the achievement of a further milestone in our Mission
Ready Management Solutions (MRMS) strategy. 

"Since entering service in 1995, the Trent 700 engine has established itself as
the market leader on the Airbus A330. With the selection of AirTanker the RAF
will gain the same benefits from the new Trent technology, such as high levels
of fuel efficiency and low cost of ownership, as many of today's leading
airlines are currently enjoying". 

                                     ENDS                                      

For further information contact:

Nick Britton

Communications Manager

Rolls-Royce Defence Aerospace

Tel:      [phone]

Mob:    [phone]

Email: [e-mail]

Website: http://www.rolls-royce.com/

Notes for Editors:

1 The Future Strategic Tanker Aircraft (FSTA) programme is a 27-year MOD PFI
contract to provide air refuelling and air transport services to the RAF. 

2 AirTanker is a consortium of four shareholders - EADS, Cobham, Rolls-Royce
and Thales. It is offering a fleet of Airbus A330-200 aircraft to meet the FSTA
requirement.

Rolls-Royce plc 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.  As a result, engine
deliveries have grown and 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 36,000 people,
of which 22,000 are in the UK.  Forty per cent of its employees are based
outside the UK - including 5,000 in the rest of Europe and 8,000 in North
America.

The large number of engines in service will generate an assured aftermarket
demand for the provision of spare parts and services.   The company's strategy
is to maximise aftermarket revenues, which have increased by 60 per cent over
the past five years due to the development of a comprehensive services
capability.

Annual sales total nearly  £6 billion, of which 50 per cent currently comes
from aftermarket services. The order book stands at more than £17 billion,
which, together with aftermarket demand, provides visibility as to future
activity levels.