Rolls-Royce downgrades 2021 outlook

Britain's Rolls-Royce downgraded expectations for how much its engines would fly this year on Tuesday (January 26).

It also warned of a big cash outflow, blaming extra travel restrictions aimed at stopping the spread of new COVID-19 variants.

Rolls-Royce now expects a cash outflow in the region of $2.7 billion for 2021, higher than current analyst estimates.

That outflow reflects lower flying hours, which determines how much it is paid by airlines using its engines.

Flying hours are expected to come in this year at about 55% of 2019 levels.

The firm's shares sank around 7% in morning trade, and has lost 58% of its value in the last 12 months.

Rolls-Royce engines power Boeing 787s and Airbus A350s.

To ride out the pandemic, it plans to sell assets worth 2 billion pounds.

It is also axing 9,000 jobs and closing factories.