The chief executive of Rolls-Royce has pressed ministers for taxpayer support for new jet engines, the day after the company announced record profits and pledged to return £9bn to shareholders.
The £3bn engine project, designed to power small commercial aircraft, will allow Rolls-Royce to re-enter the lucrative short-haul flights market.
Labor named advanced manufacturing as a priority in its industrial strategy released last summer: “It would be kind of strange not to support it,” Tufan Erginbilgich said on Thursday.
Rolls-Royce has already spent more than £1 billion on the project, while it has reportedly asked the UK government to initially provide between £100m and £200m to develop and test the UltraFan 30 engine.
Erginbilgik said: “There are all kinds of numbers out there. We would appreciate whatever support they would give, but it would be a fraction of what we are spending on this program.”
Pressed on whether the support was necessary amid huge profits and shareholder payouts, he claimed that international rivals got “two or three times” the state support that Rolls-Royce was asking for. “We are in a competitive world; so, you need to think about it,” he said.
This engine will mark the return of Rolls-Royce to the small jet aircraft market, which it left in 2013. Narrow-body aircraft – the type used on everyday short-haul routes – make up the majority of commercial aircraft flying today.
Rolls-Royce profits rose 40% last year as the engineering company’s transformation accelerated, helped by rising power demand from datacentres.
The company reported underlying profits of £3.5 billion for 2025, up from £2.5 billion a year earlier, as it also pledged to deliver up to £9 billion to shareholders over the next three years through share buybacks, the biggest return of cash to investors in a decade.
Former BP executive Erginbilgich has turned around the engine maker’s fortunes since taking over in January 2023, when he told employees the company stood on a “burning platform.”
Profits have since increased as he cut costs, renegotiated loss-making contracts and pursued better commercial terms with airline customers.
The strong results posted Thursday were partly due to increased demand for power from datacenters, as technology companies race to build infrastructure to support artificial intelligence. Profits at Rolls-Royce’s power systems division, which makes generators for sites, rose 60% last year to £852m.
However, the bulk of the company’s profits still came from its civil aerospace business, where there was strong demand for its commercial jet engines. It makes money whenever one of its engines is in the air.
It said Rolls-Royce serviced more engines last year and benefited from better contract terms, leading to profits from the division rising 41% to £2.1 billion.
It also had to deal with turmoil caused by Donald Trump’s tariff war in 2025, although the company was ultimately granted an exemption for its engines, which power Boeing’s 787 passenger jet, as part of a US-UK trade deal struck in May.
Erginbilgik said Rolls-Royce’s transformation “continues with speed and intensity. We continue to achieve results that were not possible before our transformation.”
The company has significantly raised its forecast and is now expecting operating profits of between £4.9bn and £5.2bn by 2028 – almost a third higher than the earlier target.
Rolls-Royce said it would return £2.5 billion to shareholders this year alone, as part of a long-term buyback plan. Just last year the company completed its first buyback in a decade and returned £1 billion to investors.
Last June, Rolls-Royce was selected to build the UK’s first small nuclear reactor at Wylfa, north Wales, backed by £2.5 billion of government funding. The company said it is confident the business will start making money within five years.
Shares in Rolls-Royce rose nearly 7% on Thursday morning, helping the FTSE 100 rise 18 points, or 0.15%, to a record high of 10,825.
