ITP Aero increases its capabilities as a global Tier 1 leader in the aeronautical sector

The COVID-19 pandemic is having an unprecedented impact on commercial aviation. As part of the global aviation industry, both Rolls-Royce and ITP Aero have been significantly impacted and are adjusting to new levels of demand. As a result, Rolls-Royce and ITP Aero are working to become more efficient, increase their competitiveness, and ensure a successful future.

As part of the review of its civil aviation business, Rolls-Royce today proposed increasing the scope of ITP Aero’s engineering, manufacturing, and supply chain capabilities. The proposed transfers will strengthen ITP Aero’s position as a global Tier 1 leader in the aerospace industry.

Rolls-Royce has proposed integrating its Hucknall (East Midlands, UK) facility and workforce into ITP Aero. The Hucknall plant, which manufactures a range of aero-engine components, including complex fabrications (sheet metal components that sit in different parts of the engine), combustors, and OGVs (fan outlet guide vanes), will bring new capabilities to ITP Aero and will become a key facility for the company. As part of ITP Aero, the Hucknall plant will have the potential to generate new growth and investment opportunities. Rolls-Royce has also proposed that the design engineering and supply chain management associated with complex fabrications be transferred to ITP Aero.

As a second announcement, Rolls-Royce also proposes to transfer the manufacturing of structures—key engine components, as they support the engine attached to the aircraft and the passage of services inside the engine—including high-pressure and intermediate-pressure structures, as well as front bearing structures and OGVs, to ITP Aero from its current location in Barnoldswick, UK. This is a result of ITP Aero’s demonstrated competitiveness and capability in this area.

Both proposals are subject to consultation with employee representatives in the United Kingdom.

Today’s announcement coincides with a time when ITP Aero is adapting to the effects of the COVID-19 pandemic on the civil aviation sector. Air traffic demand has been significantly impacted, with a recovery to 2019 levels expected by 2024-2025. As a result, ITP Aero announced last July the need to implement a 15% workforce reduction globally. This adjustment is being carried out through the implementation of temporary and permanent staffing measures, minimizing the impact and protecting jobs to the extent possible. Today’s announcement does not change the company’s need to adjust to a smaller market, but will have a positive impact on ITP Aero, increasing the company’s scale and capacity in the global market and helping to partially mitigate, in the medium term, the decline in workload in the affected areas.

Today’s news has no impact on Rolls-Royce’s announcement of August 27, 2020, regarding a potential sale of ITP Aero. Preparatory work continues, and Rolls-Royce will report on progress in due course. A potential sale of ITP Aero to a new owner would have the potential to generate growth and investment opportunities with customers other than Rolls-Royce. Regardless of the final outcome, ITP Aero is a key partner for Rolls-Royce, and the two companies will maintain their long-term relationship across their civil and defense aeronautical programs.

Carlos Alzola, CEO of ITP Aero, notes: “Since the beginning of the pandemic, we have taken swift action to protect our business, both by reducing our costs and seeking additional business opportunities, while also seeking to make the company more efficient and competitive. Today’s announcement is positive for ITP Aero and demonstrates Rolls-Royce’s confidence in the company. We are excited about the significant opportunities that today’s announcement represents for ITP Aero and look forward to working together with our new colleagues at Hucknall, focusing on maximizing these opportunities and recovering together from the dramatic impact of Covid-19.”

ITP Aero will continue to be managed from Spain, with headquarters in Zamudio (Vizcaya), and key plants in Spain, the United Kingdom, and Mexico.

About ITP Aero

ITP Aero is the leading aeronautical engine and components company in Spain and the ninth-largest company in the sector worldwide. With more than 30 years of sustained growth, the company is committed to innovation and the development of its own technology as its main competitive advantages.

ITP Aero is present throughout the entire aero-engine lifecycle, from R&D to in-service support, and has more than 4,000 employees in five countries and a turnover of €983 million in 2019. ITP Aero is a corporate entity of the Rolls-Royce Group.