Maintenance Contract Update

21 Feb 2008 10:00

Aer Lingus Group PLC21 February 2008 Aer Lingus Group plc ISE: EIL1 LSE: AERL Update on Maintenance Contracts Dublin & London, 21 February, 2008: Aer Lingus Group plc ("Aer Lingus" or "theCompany") today announced that it is entering into exclusive final contractnegotiations with a number of successful suppliers following the competitivetender for the provision of elements of the Company's maintenance services. The competitive tender process was separated into four distinct elements: lineactivities; base maintenance; components; and wheels and brakes. Each elementwas tendered separately with the objective to deliver the maximum benefit to AerLingus shareholders within specific compliance criteria. Exclusive contract negotiations are being entered into with the followingsuppliers: SR Technics (Ireland) Ltd. (at Dublin, Ireland) for line activities; Sabena Technics / TAT Group (at Dinard/Bordeaux, France) for base maintenance; Lufthansa Technik AG (at Hamburg, Germany) and Honeywell International Inc. (atToulouse, France) for components maintenance; and Goodrich Corporation (at Hatfield UK) for wheels and brakes maintenance andHoneywell International Inc. for the provision of certain associated materials. On completion, contracts will be awarded for a 10 year period to 2018. Allcontracts will include an option for Aer Lingus to renegotiate terms at definedfuture dates in the event of changes in market pricing for engineering servicesduring the contract period. Mr Dermot Mannion, Aer Lingus Chief Executive, commented, ""We engaged in arigorous process on each aspect of our maintenance requirements and we arepleased to confirm that the process has yielded significant and necessary costsavings for Aer Lingus over a ten year period." He added "We will be working with best-in-class service providers on each of thefour maintenance areas. Overall, we expect more than 50% of our engineeringspend to remain in Ireland over the period. The ongoing delivery of necessarycost savings is all the more important given difficult trading conditions acrossthe industry." About Aer Lingus Tender Process The entering into exclusive negotiations follows an extensive review of AerLingus' maintenance needs over a four-month period and was overseen byindependent management consultants Oliver Wyman. Aer Lingus' current ten-yearmaintenance contract with SR Technics is due to expire in October 2008 The airline's decision was based on strict compliance criteria includingapproval by EASA (European Aviation Safety Agency). Notes: About Maintenance Line maintenance: routine maintenance of in-service aircraft covering bothscheduled maintenance requirements and unscheduled maintenance e.g. pilotreported defects. Lower order checks known as 'A Checks' are included. Groundhandling and de-icing of aircraft are also included in this category. Base maintenance: aircraft removed from service for airframe, powerplant andsystems inspection, testing and repair at significant scheduled maintenanceintervals e.g. 20 months known as 'C Checks' and 'Structural Checks'. Suchchecks are carried out in a hangar facility and vary in duration from four daysupwards depending on the workscope. Components: workshop servicing, repair, overhaul, testing and certification ofaircraft parts. Such parts are known as 'rotable components' as they are rotatedthrough the workshop cycle and reinstalled on aircraft. Wheels and brakes: workshop servicing, repair, overhaul, testing andcertification of aircraft wheels and brake unit assemblies. -ENDS- About Aer Lingus Group plc Aer Lingus is an Irish low-cost, low-fares airline, providing both long-haul andshort-haul passenger transportation services. Aer Lingus' low-cost, low-faresmodel is centred on maintaining low unit cost, offering one-way fares,maintaining effective fleet utilisation and developing the Aer Lingus brand.Consistent with this low-cost model, Aer Lingus' primary distribution channel isits website aerlingus.com. For further information please visit www.aerlingus.com or contact: Investors & analysts Irish Media International Media Olwyn Kelly Orla Benson / Billy Murphy Matthew Fletcher/Maire CairneyAer Lingus Drury Communications Tel: +44 207 250 1446Tel: +353 1 886 3038 Tel: +353 1 260 5000 +44 207 324 0494 (MF)Email: +353 87 8033262 (OB) +44 7796 693066 (MF)investor.relations@aerlingus.com +353 87 2313085 (BM) +44 207 324 0492 (MC) Email: obenson@drurycom.com Email:Mark Kenny/Jonathan Neilan matthew.fletcher@powerscourtmedia.comK Capital Source Tel: +353 1 631 5500Email: aerlingus@kcapitalsource.com This information is provided by RNS The company news service from the London Stock Exchange