• Home
• News Article

Flydubai, GE unit sign $300m engine repair deal

By Muzaffar Rizvi DUBAI - Flydubai , Dubai's first low-cost carrier, on Wednesday announced a $300 million contract with GE Aviation for the maintenance, repair and overhaul of 109 engines over the next 10 years.

The contract with GE Aviation, which was signed at the Paris Air Show, represents an investment of $2 million per CFM56-7B engine that powers flydubai 's fleet of Boeing 737-800 NG aircraft, the airline said.

" Flydubai is constantly looking for the best services and partners to ensure our fleet remains in the best condition to safeguard our operational obligations and safety of our passengers and crew. We have one of the newest fleets in the industry and signing this agreement will ensure our engines continue to perform at peak levels," Ghaith Al Ghaith, chief executive of flydubai , said in an e-mailed statement to Khaleej Times.

Flydubai , which marked two years of operations on June 1, currently has a fleet of 17 aircraft with many more due to be delivered in the months and years ahead. It began commercial flights in 2009 and competes with other low-cost carriers like Air Arabia and Jazeera Airways.

"Airplanes only make money when they fly and with this maintenance deal, flydubai will almost certainly leverage more flying time from its 737-800 fleet," Saj Ahmad, Chief Analyst at FBE Aerospace London, told Khaleej Times.

He said this deal gives the airline the ability to structure its fares that much more competitively against the competition and keep on attracting customers back to the airline.

Emirates, the world's largest airline by international traffic, on Tuesday signed a letter of intent with General Electric to oversee design and construction of an estimated $120 million engine repair facility in the emirate.

"Given Emirates recent contract with GE to establish an overhaul facility in Dubai, this new deal between flydubai and GE for MRO services is not at all surprising. The low-cost airline has secured a long-term deal that will ensure that it not only has the best servicing regime for its engines, thereby allowing to increase airplane utilisation and flights to increase, it also allows the budget airline to further control its long-term cost base and push for efficiencies as it marches towards profitability," Ahmad explained.

The deal is signed under 'OnPoint solutions', which are customised service agreements tailored to the operational and financial needs of each customer for any size fleet. These agreements are designed to help lower the customers' cost of ownership and maximise the use of their assets. " Flydubai has ordered more than 50 Boeing 737 aircraft, serving the needs of the passengers traveling in the GCC, Middle East, Indian Sub-Continent and, North Africa, Asia and the fringes of Europe," said Muhammad Al Lamadani, Senior Executive Sales, VP GE International Inc.

"With this agreement, GE Aviation will provide flydubai with high quality services and material to ensure its CFM56-7B engines continue to perform well in the field," Al Lamadani said.

In another development, Jazeera Airways and Lufthansa Technik AG have extended their existing 10-year total engine support contract, signed in 2006, for an additional two years. The agreement comprises 13 CFM56-5B engines of the six Airbus A320 airplanes of Jazeera Airways' fleet.

© Khaleej Times 2011