China engine order eases Rolls-Royce woes

LONDON (Reuters) - British engine maker Rolls-Royce Plc won a $1.8 billion order from Air China, offering some respite to the company which had been hit by safety fears over another of its engines.

The world's second-largest maker of aircraft engines said on Monday it had received an order from Air China to provide Trent XWB engines for 10 Airbus A350 XWB aircraft and Trent 700 engines for 10 Airbus A330 planes.

Those are different engines to the Trent 900, one of which failed on a Qantas Airbus A380 flight this month, forcing the aircraft to make an emergency landing.

Shares in Rolls-Royce have declined by 10 percent since hitting a record high at the start of November, three days before the incident. They were up 0.7 percent to 596 pence at 1010 GMT.

The Trent XWB is the only engine that can power the Airbus A350 XWB planes, making the order an inevitable follow-on from the purchase of such an aircraft.

Still, the company will hope today's order will ease some of the negative publicity surrounding it following criticism by Qantas and others over its handling of the QF32 flight. It is under pressure to clarify how many Airbus A380 planes must have their engines replaced and how long that will take.

"Bearing in mind confidence is at a low then any good news has to be positive for the price. We should welcome it for what it is, a very large order for a well-proven set of engines," said BGC analyst Howard Wheeldon.

"In troubled times such as this, it's super news and it's great news for the UK in terms of exports as well," he added.

Earlier in November, Rolls-Royce won a $1.2 billion order from China Eastern Airlines. That deal coincided with a trip to Beijing by British Prime Minister David Cameron, who is looking to double Britain's trade with China by 2015.

Also on Monday Britain's biggest retailer, Tesco, said it planned to quadruple revenue from China over the next five years.

Rolls-Royce is already well established in China, where it has a 56 percent share of the market for large civil aero-engines.

The company has had more than $4.5 billion worth of orders for Trent 700 engines since the start of July.

(Reporting by Matt Scuffham; Editing by Sarah Young and Michael Shields)