Etihad closes $7bn engine deals

GE Aviation, Rolls-Royce, Engine Alliance and International Aero Engines chosen as engine partners for 100 Etihad aircraft.

Etihad has placed orders for engines to power the 100 aircraft it ordered last year.

PARIS // Etihad Airways has signed one of the largest, most far-reaching engine deals in airline history, worth up to $14 billion (Dh51.41), it the airline said yesterday at the Paris Air Show. The engine deals, which includinge long-term maintenance contracts, were some of the largest made at the biennial event. They and underlined the importance of Gulf airlines in global aviation, with which have stood firm on their large order books despite estimates that the industry will lose $9bn this year because of due to the global downturn. Etihad The carrier said GE Aviation, Rolls-Royce, Engine Alliance and International Aero Engines (IAE) would be the engine partners for the 100 aircraft that it ordered from Boeing and Airbus at last year's Farnborough International Air Show in the UK. The firm engine orders are worth $7bn and cover Etihad's upcoming deliveries of narrow-bodied and wide-bodied aircraft, including the superjumbo Airbus A380. Etihad also has another 105 aircraft on option from the two aircraft makers, which, if exercised they, would increase the engine orders to $14bn. "The new aircraft and the engines that will power them are scheduled for delivery between 2011 and 2020, which demonstrates the confidence we have in our plans for sustainable future growth," said James Hogan, the chief executive of Etihad Airways. But However, Mr Hogan said heavy discounting in the market was putting pressure on its yields and the company's break-even target of this year 2010. Other Gulf deals at Le Bourget included a $1.5bn Rolls-Royce engine order by Gulf Air, and orders for more than 25 aircraft from Airbus and Bombardier by Qatar Airways, worth about roughly $2bn at list prices. Etihad's firm engine orders include 78 GEnx engines to power its 35 new Boeing 787 aircraft, in which GE beat out rival engine makers from Rolls-Royce. GE is also providing Etihad with engines for 10 Boeing 777s, and the total value of its the contracts, including engines for the 787s and 777s, is $3.9bn, including maintenance deals, it said. Engine Alliance, a joint venture between GE and Pratt & Whitney, will deliver 45 GP7200 engines worth $1.3bn, including maintenance contracts, for 10 new Airbus A380 aircraft, worth $1.3bn including maintenance contracts. IAE won a contract valued at $575 million for 44 V2500 engines for 20 Airbus A320 aircraft, valued at $575m. The firm is a joint venture between Rolls-Royce, Pratt and Whitney, MTU Aero Engines and Japanese Japanes Aero Engines., and Rolls-Royce's share in the deal was $190m, a company spokesman said. As announced a one year ago, Etihad has also selected Rolls-Royce's Trent XWB engines for its order of 25 Airbus A350s, and 22 GE90 engines to power its 10 new Boeing 777-300ER aircraft. Etihad's orders are helping to cement its position as a contender in the global airline business, and its aims to draw traffic away from European and Asian carriers through its more ideally located hub in the Gulf. The airline currently has a fleet of 52 aircraft, which will be serving 56 destinations by the end of the year. It plans to greatly increase ramp up its fleet and network dramatically over the next decade as the new aircraft are delivered, starting beginning in 2011. In addition to its fast-expanding airline, Abu Dhabi is also developing an aerospace sector, and earlier this week Abu Dhabi Airports Company (ADAC) formally unveiled an aerospace cluster at Al Ain International Aairport to focus on manufacturing, maintenance, research and training.