Rolls-Royce unveils hybrid flying taxi at Farnborough

The Rolls-Royce EVTOL plane will seat four or five people, with a flying range of 500 miles (805 kilometers) and a top speed of 200 miles per hour. (AFP)
Updated 17 July 2018
0

Rolls-Royce unveils hybrid flying taxi at Farnborough

  • Rolls-Royce hopes to manufacture a prototype version of its electric vertical take-off and landing vehicle within the next 18 months
  • Rolls-Royce is also researching an all-electric product but that is not as advanced as the EVTOL offering

FARNBOROUGH, United Kingdom: British engine maker Rolls-Royce revealed plans this week to develop a hybrid electric vehicle, dubbed the “flying taxi,” which takes off and lands vertically and could be airborne within five years.
The London-listed aerospace giant, which is based in Derby in central England, showed off the plans at the Farnborough Airshow for the first time, as other players also rush into the market segment.
Rolls said it hoped to manufacture a prototype version of its electric vertical take-off and landing (EVTOL) vehicle within the next 18 months, and could potentially take to the skies in the early 2020s.
The Rolls-Royce EVTOL plane will seat four or five people, with a flying range of 500 miles (805 kilometers) and a top speed of 200 miles per hour.
“In this market, you will see something like this flying within three to five years, and we will demonstrate the system in two years,” said Rob Watson, head of Rolls-Royce’s electrical team.
“At the end of next year we will be flight ready,” he said at the group’s Farnborough chalet.
The hybrid vehicle, which has so far cost single-digit millions of pounds to develop, will use a traditional gas turbine engine with an electrical system wrapped around it.
Rolls-Royce is also researching an all-electric product but that is not as advanced as the EVTOL offering.
“There is an emerging market for all-electric planes but we believe that you need a level of requirement that an all-electric system cannot really provide today,” Watson said.
“So, all-electric is the way to hop around within a city, but if you want to travel 200 or 300 miles, if you want to run London to Paris, then you are going to want to run something that will give you that range.
“So we think you will see hybrid propulsion systems starting to make this market.”
Rolls is not alone in the hybrid “flying taxi” marketplace.
Other companies researching the sector include US taxi-hailing company Uber, the Google-backed Kitty Hawk project, Lilium Aviation in Germany, Safran in France, and Honeywell in the United States.
The aerospace sector’s push into electric propulsion has drawn comparisons with the automotive industry, where electric cars are gaining ground in terms of popularity and performance.
“Think of it like the car industry. Historically everybody had an internal combustion engine. over time you add more electric capability to it and then you start to see electric cars,” added Watson.
“In the same way, we are introducing a hybrid propulsion system into this market because we think it gives you that range and capability.”
David Stewart, aviation and aerospace adviser and partner at Oliver Wyman, said that the aerospace sector was facing pressure to become more environmentally friendly.
“I think that electrical propulsion is a potential disruptor to the way things are powered,” said Stewart, who will speak at Farnborough on Tuesday.
“We are quite a long way for electrical power to be a replacement for kerosene, but never say never.”
He cautioned that Rolls-Royce’s flying taxi concept was in reality a development platform to test the new technology.
The real market opportunity will likely be a scaled-up version of 10-15 seats that can serve a wider variety of applications, according to Stewart.
Watson added: “Over time you’ve got more electrical capability for bigger and bigger aircraft — and that’s really what we are thinking about today.
“We are learning today about the technology that we will need tomorrow.”


INTERVIEW: SABB Managing Director David Dew steering through historic transaction in Saudi banking

Updated 20 October 2018
0

INTERVIEW: SABB Managing Director David Dew steering through historic transaction in Saudi banking

DUBAI: David Dew has been working in banking in the Middle East and other emerging markets for 40 years, and you might think he has seen it all. But the merger between SABB and Alawwal in Saudi Arabia — which he is steering through to completion next year — is a career achievement for him.
“I think it’s a clear case of a win-win situation, and all our stakeholders will get benefit from it. It’s a genuinely exciting landmark transaction, and a significant transformation for the Kingdom,” he said.
It is a historic transaction, Dew explains. “It is the third biggest banking merger in the history of the region — the other two were in the UAE with significant government ownership — so SABB-Alawwal is also the biggest private banking merger for 20 years. It’s the first since the Capital Market Authority (CMA) was formed and the first since the new takeover rules came in.”
The merger will create the third biggest bank in the Kingdom by assets, loans and deposits, and — perhaps more significant in the current financial environment — forge a bank that is unashamedly international in its outlook. The transaction has its origins in the different imperatives of foreign banks operating in the Kingdom. Saudi Arabia has been identified as a global growth market by HSBC, which holds 40 percent of SABB — full name the Saudi British Bank.
Alawwal — the “first bank” in Arabic, reflecting its long heritage in the Kingdom — was dominated by a consortium of foreign banking interests, notably cash-strapped RBS (Royal Bank of Scotland) of Britain. RBS and its consortium partners — from Spain and Holland — wanted to reduce their overseas footprint. Getting out of Alawwal was a logical move from that perspective.
RBS and the Spanish bank Santander — which would each have about 4 percent of the enlarged company — have undertaken not to sell their shares for six months after completion.

-------

BIO

 

Born: Farnborough, UK, 1955

Education

•Farnborough Grammar School

•University of Cambridge, MA in Economics

Employment

•British Bank of Middle East, Oman

•Various positions around the world with HSBC

•Managing director, SABB

-------


The foreigners’ different strategic interests might have been the original spark for the merger, but Dew firmly believes it is in the best interests of the Saudi banking business, and bank customers. “Our first stakeholder is the Kingdom, and the merger is a great example of why and how Vision 2030 is actually working. It’s showing that Saudi Arabia is open for business. An important part of the Vision plan is the financial sector development program, and this merger shows it is working.
“The idea is to grow and develop capital markets, and this will help the Kingdom do that. It’s the kind of thing that just might not have happened even a few years ago.”
The next set of stakeholders he is working to satisfy is the regulatory establishment. The deal has been quite a long time in gestation, and much of that time has been taken up in getting it just right from a regulatory standpoint. “It’s taken a bit longer than you might have expected, but the regulators have been with us all the way — the CMA, the Saudi Arabian Monetary Authority, and the Ministry of Finance. All good things take time, and it is more important to do it right than to do it quick,” he said.
The next key group of stakeholders are the shareholders on both sides. In addition to HSBC and the RBS consortium, there are big investors in both banks in the shape of the Olayan conglomerate, and the government agency the General Organization for Social Insurance. Both have recused themselves from involvement in the merger negotiations. But both boards have recommended the merger terms.
“We’ve explained the business rationale and made a compelling case to them that the merger creates value. There will be a circular from both parties to all shareholders, we hope, by the end of the year.”
The next stakeholders on the list are the customers. “I know it’s a cliche that the customers are all important, but it’s true, and they will see real benefits,” Dew said.
Comprising as much as 75 percent of the new bank’s business, the corporate sector will be crucial. “It will be the leading corporate bank by lending, and will offer other products, too, for example trade finance. It will also be the leading cash management business, and a significant foreign exchange provider.
“I think it will occupy a powerful corporate position and overall will be a bellwether for the underlying economy, so it will be followed closely by anybody interested in the Kingdom’s business,” Dew explained. With a market capitalization of about SR65 billion ($17.33 billion) and a sizeable free float on the Tadawul, it will be valuable proxy for investment in the modernizing Kingdom.
The new bank will also use its connection with HSBC’s powerful investment banking operation in Saudi Arabia to help satisfy customers’ needs in that segment.
In the retail sector, it will never be as big as NCB or Al Rajhi, market leaders with more than 50 percent of the retail market between them. But with about 10 percent of the Kingdom’s retail market, Dew feels it will be approaching the “tipping point” at which it becomes a serious player.
“The home loans market is critical. We estimate we’ll have 16 percent of that market, which is vitally important to the changes that are happening in the Kingdom,” he said. It will also have around 20 percent of the Saudi credit card market, he estimated.
“We will redouble our efforts to offer a good SME (small and medium-sized enterprises) proposition. SABB has not done enough in this sector, but we will do more, and the ability to do it will be enhanced by the merger,” he added.
“For corporate customers, we will be able to offer the biggest balance sheet and underwriting capability, which adds up to more ‘muscle’ for corporate clients. For retail customers, we will offer additional scale and focus, especially on the digital side. This is the future for the retail banking business, and we will build on Alawwal’s strengths here. They are pretty good in digital already. They have punched above their weight,” Dew said.
The final group of stakeholders are the employees. “Again it is trite to say ‘We are nothing without our people,’ but I happen to believe it. We have promised and we mean it, that there will be no involuntary redundancies. That does not mean there will be no losses through attrition. People come and go all the time, so that is only natural,” Dew said.
The new bank will have 4,800 employees, more than 90 percent of them Saudi citizens and 20 percent women. Its new chairperson will be Lubna Olayan, head of the eponymous conglomerate and one of the leading business figures in the Kingdom. “She has a track record in business, leadership expertise and international connectivity. To have somebody like that as chair of the new bank is an incredibly powerful statement. She will also be the first female chair of a listed Saudi company,” said Dew, who will be managing director of the new entity.
The bank will start operating in what Dew sees as an improving economic and financial environment in the Kingdom, with the long-promised privatization and initial public offering program materializing. “Two years ago, growth and bank lending were falling. In 2018 there has been a modest but significant improvement, and I do believe next year is going to show further improvement.”
On the geopolitical background, always a big factor in the business climate in the region, he brings a historical perspective to bear.
“When I came here 40 years ago, Israel-Palestine was the big issue. Since then, the region has become even more complicated and volatile. But business has navigated through these problems and I’m confident it will do so again. It’s all about having strong foundations,” he said.