Rolls-Royce has warned tougher Covid-19 restrictions will delay the recovery of long-haul air travel in 2021.
The aerospace giant said it expected to burn through around £2bn this year and more contagious variants of the virus were creating “additional uncertainty”.
The FTSE 100 company, which has UK sites in Derby and Filton, near Bristol, said in a trading update on Tuesday (January 26) that engine flying hours would be at around 55% of 2019 levels. Shares fell 6% on the news.
However, the firm added that December trading was broadly in line with expectations and it had delivered “good progress” on its restructuring programme.
Rolls-Royce announced last year it was planning to slash 9,000 jobs from its global workforce by the end of 2022 after the collapse in air travel caused by the virus. By the end of 2020 it had already shed 7,000 roles.
The business has made cash cost savings of more than £1bn, it said, after announcing its overhaul programme. Year-end liquidity was around £9bn - at the upper end of previous predictions.
A spokesperson said: “Continued progress on vaccination programmes is encouraging for the medium-term recovery of air traffic and economic activity.
“In the near-term, however, more contagious variants of the virus are creating additional uncertainty.
“Enhanced restrictions are delaying the recovery of long-haul travel over the coming months compared to our prior expectations, placing further financial pressure on our customers and the wider aviation industry, all of which are impacting our own cash flows in 2021.”
Rolls-Royce said its financial forecasts remained highly sensitive to changes in external conditions.
The spokesperson added: “We are confident that despite the more challenging near-term market conditions we are well-positioned for the future.
"We remain focused on completing our restructuring programme and footprint consolidation as well as maintaining cost control and capital discipline."
