Paris Airshow: Flydubai signs 10 year engine MRO deal with GE Aviation

The OnPoint solution agreement, signed at this week’s Paris Air Show, represents an investment of $2 million per CFM56-7B engine that power flydubai’s fleet of Boeing 737-800 NG aircraft. Some engines will have more than one shop visit, putting the total value of the contract at more than $300 million.

Ghaith Al Ghaith, ceo of flydubai, 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.”

Flydubai, which marked two years of operations on 1 June 2011, currently has a fleet of 17 aircraft with many more due to be delivered in the months and years ahead.

Analyst Saj Ahmad commented on the deal saying: "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. In fact, when you look at flydubai's relationship with CFM international (part owned by GE), 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.
 
"What makes this deal even more compelling is that with the introduction into service of the CFM56-7BE engine on the 737 Next Generation family which will cut fuel burn by 2% and lower maintenance costs by 4%, the long term gain for flydubai allows the carrier to fly more often and at a lower cost - this gives it the ability to structure its fares that much more competitively against the competition and keep on attracting customers back to the airline. 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."

Muhammad Al-Lamadani, senior executive sales, VP GE International Inc. said: “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.

“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.”

Above: Muhammad Al-Lamadani (left), senior executive sales, VP GE International Inc. signs the engine MRO contract with Mukesh Sodani, chief financial officer of flydubai.

OnPoint solutions are customised service agreements tailored to the operational and financial needs of any size fleet, designed to help lower customers' cost of ownership and maximise the use of their assets. They may include overhaul, on wing support, new and used-serviceable parts, component repair, technology upgrades, engine leasing, integrated systems support and diagnostics and integrated systems.