AirAsia inks US$1.5bil engine service deal with GE

  • Business
  • Wednesday, 15 Jun 2005


AIRASIA Bhd has sealed a US$1.5bil on-point solution engine service agreement with General Electric Co (GE) of the United States for the maintenance, overhaul and repair of the 129 CFM56-5B engines that will power the airline's new fleet of Airbus A320-200 aircraft. The agreement is for 20 years. 

AirAsia had earlier concluded a US$750mil purchase agreement with CFM International for the CFM56-5B engines to power its A320s. CFM International is a 50:50 joint venture between France's Snecma and GE. 

The new aircraft will join AirAsia's fleet between December this year and 2011. The engines will be maintained and overhauled by GE Engine Services Malaysia Sdn Bhd, GE's local joint venture with Malaysia Airlines, at its facility in Subang, Selangor.  

(AirAsia will own 19% of GE engine services facility as part of the service package agreement. GE's stake in GE Engine would be diluted to 51% from 70%, while Malaysia Airlines' shareholding would remain at 30%.) 

AirAsia group chief executive officer Tony Fernandes said: “AirAsia is extending its commitment to GE in view of the high quality of work standard and services that was seen throughout a partnership formed back in 2002. We believe in strengthening partnerships that work well for our business and allow us to keep costs low while ensuring the highest quality services.” 

Fernandes said this after a signing ceremony at the 2005 Paris Air Show in Le Bourget on Tuesday. 

On-point solutions are flexible long-term commitments designed to meet customers unique engine service needs. 


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