Aircraft engine maker Rolls-Royce (RR.) has been pulled higher in the slipstream of a recovering aviation sector in recent months to trade within sight of 52-week highs.

Rolls is reliant on lucrative spares and repairs revenue on an installed base of aircraft engines. This revenue stream is directly linked to the number of hours planes are in the air.

However, its new CEO Tufan Erginbilgic sounded anything but complacent in recent comments to staff subsequently reported by Reuters and the Financial Times.

Colourfully describing Rolls-Royce as a ‘burning platform’ he said the company’s investments ‘destroy value’ and added that ‘we underperform every key competitor out there’. Erginbilgic also announced a transformation plan targeting efficiencies while putting the position of low returns business units on notice as having no place in the group’s portfolio.

Jefferies analyst Chloe Lemarie commented: ‘We would welcome further restructuring announcements and especially a tighter focus on investment as the group R&D spend has remained elevated since 2014 despite the lack of meaningful opportunities within its Civil (aerospace) business.’

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