Rolls-Royce reports record GBP5.4b loss as Covid-19 hits aviation

The jet engine maker Rolls-Royce gave a stark warning about the impact of the Covid-19 pandemic on the business as it reported a record GBP5.4b loss for the first half of the year. The company does not expect orders to recover to pre-Covid levels until 2025. The pandemic led to a slump in demand for its engines as airlines reduced flights and aircraft manufacturers slowed production. Rolls-Royce originally expected to make 450 engines during 2020 but now plans to deliver just 250. It continues to burn through cash, and expects to have burned through £4bn by the end of the year, and said it may not be able to find enough funding to cover its needs. Announcing its results for the first half of the year, it said: “The inherent uncertainty over the severity, extent and duration of the disruption caused by the Covid-19 pandemic and therefore the timing of recovery of commercial aviation to pre-crisis levels and the availability of sufficient funding, represent material uncertainties that may cast significant doubt on the group’s ability to continue as a going concern.” Rolls-Royce is undertaking the largest restructuring in its history and, as a result, will close several production sites, including Barnoldswick, in Lancashire, and Annesley, in Nottinghamshire, as it consolidates its operations.<br/>