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Rolls-Royce share price: awaiting positive news on air travel

Rolls-Royce’s share price (LON:RR) is coming under increased scrutiny ahead of the company announcing its financial results on 11 March. In addition, with the continued success around the vaccine roll-out, the airline industry could soon provide the FTSE 100 company with some positive news.

Rolls-Royce Share Price

Rolls-Royce shares were badly impacted by the pandemic, falling by 63% between February and April 2020, from 232.39p per share to 86.34p. Since then the company’s share price has mostly staggered along as demand for aircraft dried up. However, in February the company’s stock value rose by 20% as positive news emerged around vaccine roll-outs.

Outlook

As one of the largest aircraft manufacturers in the world, Rolls-Royce has been significantly impacted by the ongoing pandemic. Not only did many airlines rescind their orders but fewer planes are currently being serviced due to a lack of flights. The company does not expect orders to recover to pre-Covid levels until 2025.

In the meantime, much will depend on the success of the continued vaccine roll-outs, and the resumption of international flights. Airlines reported an influx of holiday bookings following the Prime Minister announcing a roadmap out of lockdown. However, the sector will need more than demand from consumers to secure its future. A question mark remains over the long-term effects of Covid-19, even once most people have received a vaccine jab. If the disease lingers then intonational travel could be restricted further.

In addition, the aerospace company recently announced it has made progress towards developing the world’s fastest electric plane. Rob Watson, director of Rolls-Royce Electrical, said: “Electrification of flight is an important part of our sustainability strategy as we aim for net zero carbon by 2050. For the first time, the plane propelled itself forward using the power from an advanced battery and propulsion system that is ground-breaking in terms of electrical technology.”

Experts have said that it will be decades before electric planes are able to displace kerosene models. However, it is an emerging sector which could interest investors with a long-term perspective.

Rolls-Royce will hold announce its annual results on March 11 when the company is expected to record a significant loss.

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