Rolls-Royce: Power by the Hour
Rolls-Royce builds jet engines, but for many airline customers it doesn't really sell the engine — it sells the hours the engine actually flies. Branded "Power by the Hour" and dating back to the 1960s, the model charges a fixed fee per flight hour covering the hardware plus all maintenance and overhauls. Airlines stop paying for a machine and start paying for uptime. That one shift quietly rewires who carries the risk and who captures the upside, in ways that ripple through engineering, service, and the balance sheet.
For founders and operators, this is the case on selling outcomes instead of objects. Under the old model, a vendor makes money again every time its product breaks — putting it subtly at odds with the customer. The case sharpens the search for the metric your customer actually cares about, and whether you could price against that outcome rather than the thing in the box.
Frequently asked questions
What is Rolls-Royce's Power by the Hour model?
It is an outcome-based pricing model where Rolls-Royce sells airlines the hours its jet engines actually fly rather than the engine itself. Dating back to the 1960s, the model charges a fixed fee per flight hour covering the hardware plus all maintenance and overhauls. Airlines stop paying for a machine and start paying for uptime.
When did Power by the Hour start and what does the fee cover?
Power by the Hour dates back to the 1960s. The fixed fee per flight hour covers the engine hardware plus all maintenance and overhauls. This shifts who carries the risk and who captures the upside across engineering, service, and the balance sheet.
Why does outcome-based pricing align Rolls-Royce with its customers?
Because under the old model a vendor makes money every time its product breaks, putting it subtly at odds with the customer, while charging for flight hours means Rolls-Royce only earns when engines run reliably. Selling uptime instead of hardware aligns the maker's incentives with the airline's. Risk and upside move to the party best placed to manage them.
What can founders learn from Rolls-Royce Power by the Hour?
The lesson is to find the outcome your customer actually cares about and ask whether you could price against that result rather than the thing in the box. Selling outcomes instead of objects can realign incentives and create recurring revenue. CaseBook turns this into a move you apply to your own company, with an AI coach that reads your answer.