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Rolls-Royce boss bets big on new engines and small nuclear

Having led an extraordinary turnaround since 2023, Tufan Erginbilgiç is staking the company’s continued growth on small modular reactors and a return to the single-aisle commercial jet market

Jeevan Vasagar, Observer 6th Sept 2026

he chief executive of Rolls-Royce was in typically forthright form at the Farnborough International Airshow in July. More than a decade after exiting the market for narrow-body aircraft, the British engineering company planned to return to making engines for the single-aisle planes that are the world’s bestselling commercial jets – but the CEO wanted government support to do so.

If it were not forthcoming, Tufan Erginbilgiç added, then Rolls-Royce had other options.

Erginbilgiç, a former BP executive, has led an extraordinary turnaround. At his first town hall meeting as chief executive, he declared that Rolls-Royce was a “burning platform”. The pandemic, which brought global air travel shuddering to a halt, could not be blamed for the engine-maker’s troubles, Erginbilgiç said, telling staff: “We underperform every key competitor out there.”

Rolls-Royce’s share price has soared from about 99p when Erginbilgiç took the helm in January 2023 to £14.67 this week, an increase similar to Nvidia’s surge in that time. “Rolls is a great business, and Tufan has played the City like a piano,” one aviation industry insider said.

The question is: can it last?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………Rolls-Royce’s defence business, making power and propulsion systems for combat aircraft and submarines, has benefited from the increase in defence spending. The power systems division, supplying diesel generators and gas engines, has thrived with the boom in data centre construction. But here too Rolls-Royce is not just surfing the rising market. Profit margins have gone up as well, analysts point out……………………………………………………………………………………………………………………

The second big bet is on small modular reactors (SMRs), a technology that’s meant to reduce the time and cost of delivering nuclear fission at a moment when the uncertainty of fossil fuel markets, soaring electricity demand and emissions goals are driving renewed interest in nuclear power.

Delivering emissions-free energy is a valuable sideline for a company that relies for most of its business on burning kerosene. But analysts say the promised cost savings of SMRs have yet to be proven.

If Erginbilgiç can pull off either of these moonshots, the post-pandemic surge in Rolls-Royce’s valuation might just be the beginning.
https://observer.co.uk/news/business/article/rolls-royce-boss-bets-big-on-new-engines-and-nuclear

September 15, 2026 - Posted by Christina Macpherson | business and costs, Small Modular Nuclear Reactors, UK