Build story · United Kingdom · 1962–2023
Rolls-Royce ‘Power by the Hour’: selling flying hours, not engines
Instead of selling engines and charging for repairs, Rolls-Royce charges airlines for each hour an engine flies — aligning its income with engine reliability.
By Shivam Bhandari · Reviewed 31 October 2026 · How we write
by the numbers
- Concept introduced
- 1962
- Pricing unit
- per engine flying hour
What happened
The ‘Power by the Hour’ concept dates to 1962, when Bristol Siddeley — later part of Rolls-Royce — offered to maintain engines for a fixed fee per flying hour. Rolls-Royce developed it into its TotalCare service for airline engines.
Under traditional models, engine makers earned more when engines broke down and needed parts. Under ‘Power by the Hour’, airlines pay for each hour an engine is in use, while Rolls-Royce handles maintenance and monitors engines in real time. Every hour an engine is out of service costs Rolls-Royce money, so it is motivated to make engines more reliable.
Long-term service contracts became a major part of Rolls-Royce's civil aerospace income, and the model inspired ‘servitisation’ across industries.
Timeline
- 1962
Power by the Hour introduced by Bristol Siddeley.
- 1966
Bristol Siddeley merges into Rolls-Royce.
- 1990s
TotalCare service model expands.
what made it work
- Aligned supplier profits with customer success.
- Predictable costs for airlines.
- Engine data allowed preventive maintenance.
the lesson
Charging for the outcome customers want, rather than the product, can align incentives and create long-term revenue.
Apply it to your business
- 1Could you charge for results instead of products?
- 2Make your income depend on your product working well.
- 3Use data to prevent problems before they happen.
Laws at work in this story
Figures are rounded and drawn from public reports, company filings and widely cited coverage at the time. Check the company's latest filings before relying on any number.