With the aviation industry in shambles following the outbreak of the coronavirus pandemic last March, engine maker Rolls-Royce plummeted to a record 4 billion-pound ($5.6 billion) loss for 2020. According to the British company’s chief executive, the engine manufacturer still has enough funding to bounce back from this historic loss.
“The worst is now well behind us,” CEO Warren East said, as the company declared that its spending should be halved this year. Rolls-Royce is also relying on the prospect of an economic recovery later in the year, with worldwide vaccination rollouts expected to increase and widespread travel to resume under semi-normal conditions.
In an interview with reporters, East exhibited confidence in his company’s ability to bounce back from such a chaotic year, explaining, “We have our cash burn under control … We have ample liquidity to get through this crisis as long as it lasts.”
The company’s model of charging airlines for the number of hours that its engines run proved to backfire last year, due to so many planes remaining grounded as a result of airport closures due to COVID-19 safety concerns. This forced Rolls-Royce to approach shareholders for more cash.
As a result of its financial difficulties, Rolls-Royce retrenched 15% of its workforce in 2020 while putting up 2 billion pounds of assets for sale.
