Rolls-Royce needs UK decision on narrowbody engine soon, says CEO

By Sarah Young

FARNBOROUGH, England, July 21 (Reuters) - Britain's Rolls-Royce needs a decision from the UK government soon on whether it will provide a subsidy to help the engineering company develop a new engine for narrowbody aircraft, its CEO said.

The company wants Britain to co-invest in the new engine which would allow it to return to the single-aisle airframe sector, potentially a big win for the UK in terms of advanced manufacturing, jobs and exports.

"We would like to do it in the UK because of our origin. Do we have other options? Yes," CEO Tufan Erginbilgic told reporters at the Farnborough Airshow on Tuesday.

Conversations were also taking place with other governments, Erginbilgic confirmed, with Germany and the United States said to be interested.

HOPEFUL AFTER UK POLITICAL CHANGE

Boeing and Airbus will make the decision on engines for their new jets in two years, Erginbilgic said, meaning Rolls-Royce needs a decision on any subsidy as soon as possible.

He declined to comment on the level of investment Rolls-Royce wants, adding that talks with Britain were "progressing" but that was before country's latest leadership change — Andy Burnham on Monday became the seventh prime minister in 10 years.

"Obviously there are some different people, but the same government so in that sense, I'm hopeful," Erginbilgic said, adding that he was positive about Burnham's choice for finance minister, John Healey, who formerly held the defence brief.

"He understands Rolls-Royce and our agenda and how much we contribute to the country," the CEO said of Healey.

Rolls-Royce has for the last 15 years been locked out of the narrowbody market, a much bigger market than the widebody market on which it is currently focused. It has been developing the next generation UltraFan with the aim of getting back in.

Erginbilgic said if the government backed the project and Rolls-Royce's new engine gained a position on a narrowbody airframe, that would create 40,000 British jobs.

The company is also seeking a manufacturing partnership for the new engine.

(Reporting by Sarah Young, Editing by Paul Sandle, William Maclean)