The President of Emirates Airlines has urged Rolls-Royce to return to basics and focus on the performance of its engines, following the announcement from the British engine manufacturer about plans to quadruple its profits. Rolls-Royce shares rose after CEO Tufan Ergenbilgic revealed a strategy to increase the company's funds, which includes a sharp increase in profit margins and "value-based pricing," indicating higher service invoice amounts.
However, Emirates President Tim Clark, who criticized Rolls-Royce at the Dubai Airshow earlier this month for the engine prices and performance of its largest engine, appeared unfazed by the plans largely reliant on increasing profit margins from the engines. He told Reuters in an interview, "If you have an engine... that does not perform as it should, your costs will rise. But your ability to extract value from the customer will simply decrease because the customer will not accept underperformance."
He added, "Even kindergarten children understand very well what cause and effect are. Make your product right, design it according to what the customer wants, and deliver that high level of precision. And yes, ironically, you can extract more value for your money from profits according to the terms of your investment."
