Rolls-Royce, the British maker of aircraft engines, said Thursday that it had agreed with US group United Technologies Corp to abandon their joint project to power mid-size planes, citing regulatory issues.
Rolls said however that it remained "fully committed" to the sector.
"In October 2011, Rolls-Royce and United Technologies Corp. (UTC) announced their intention to form a new joint venture to develop an engine to power future mid-size aircraft (120-230 passenger aircraft)," Rolls said in a short statement.
"Following further discussion, and because of the current regulatory environment, the parties have agreed not to proceed with the partnership."
The statement added: "Rolls-Royce remains fully committed to this important market segment and will continue to invest in technologies that will enable us to take advantage of opportunities as they arise."
The announcement was made shortly before the close of London trading, while shares in Rolls-Royce ended 1.46 percent-higher at 1,112 pence. London's benchmark FTSE 100 index finished with a gain of 1.0 percent to 6,625.39 points.