London, May 2, 2026, 16:01 (BST)
- Shares of Rolls-Royce Holdings plc finished up on Friday, with the engine maker sticking to its profit and cash goals for 2026.
- The company reported that engine flying hours in the Middle East bounced back after disruptions caused by the Iran war.
- Investors are eyeing the impact of rising fuel prices and airline capacity reductions on demand for widebody jets.
Rolls-Royce Holdings plc climbed 1.46% to finish at 1,199.20 pence Friday, pushing higher after sticking to its 2026 guidance even as airline customers face turbulence from the Middle East conflict. The British engine maker’s shares left the FTSE 100 trailing; the index dipped 0.14%.
Why does this matter? Rolls-Royce’s civil aerospace arm lives and dies by airline activity. Carriers pay for engine use and servicing on long-haul aircraft, making engine flying hours (EFH) a critical indicator for future service revenue.
During its annual meeting, Rolls-Royce reiterated it’s still targeting 2026 underlying operating profit in the £4.0 billion to £4.2 billion range, with free cash flow forecast between £3.6 billion and £3.8 billion. The company’s preferred measure of operating profit excludes certain one-offs, while free cash flow reflects what’s left after operating and investing.
Chief Executive Tufan Erginbilgic told shareholders the year’s opening had been “strong,” adding that the company expects to “fully mitigate” the ongoing financial hit from the disruption. Rolls-Royce said its turnaround plan is advancing, boosting management’s confidence in the full-year outlook. Rolls-Royce
Large engine flying hours in civil aerospace climbed 5% in the first quarter, reaching 115% of what Rolls-Royce saw back in 2019. The company is sticking to its full-year guidance, still aiming for EFH at 115% to 120% of 2019 levels. Trent XWB engine flying hours in the Middle East, Rolls-Royce said, are now back at pre-conflict levels.
The company provides engines used in Airbus A350 and Boeing 787 widebody aircraft. According to Reuters, airlines were hit hard by major disruptions at the outset of the Iran war—higher fuel costs, canceled flights, and persistent warnings about jet fuel supply remain a drag on the industry.
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, pointed out that servicing engines for bigger long-haul jets is a key revenue stream for Rolls-Royce—revenue tied directly to hours flown. He noted, too, that most of the recent capacity reductions have targeted narrowbody planes, a market segment where Rolls-Royce simply isn’t present.
The broader engine sector isn’t immune to the fuel squeeze either. GE Aerospace, another heavyweight in aircraft engines, said in April it was still aiming for the upper end of its 2026 profit forecast. Even so, the company flagged higher oil prices, fuel supply issues, and a cooling global economy as headwinds. CEO Larry Culp told Reuters he hadn’t seen evidence of customers pushing to delay shop visits.
Rolls-Royce flagged momentum beyond its civil aerospace unit. Defence kicked off the year with solid gains, citing improved aftermarket activity and a greater than 20% jump in original equipment deliveries from last year. Over in Power Systems, order intake for power-generation—spanning both gas and diesel engines—climbed roughly 50% year-on-year.
The group reported a Power Systems order backlog of 7.3 billion pounds as of March 31, with data centre demand playing a major role. The small modular reactor unit has inked contracts for projects in Wales and the Czech Republic, deals the company expects to deliver both revenue and profit in this year.
There’s a catch: a rebound in flying hours could stall if fuel costs remain elevated or airlines decide to trim capacity. Chiekrie also noted a separate headache—maintenance on newer aircraft engines has been heavier than customers would like, and unless that’s sorted out, “could eat into future profits.” Hargreaves Lansdown
Rolls-Royce is ramping up shareholder payouts. The company reported it has already finished over 750 million pounds from the 2.5 billion-pound 2026 segment of its ongoing 7 billion- to 9 billion-pound buyback effort. Next up: half-year numbers drop July 30.
