LAN Signs $2 Billion CFM56-5B Engine Order / Maintenance Agreement for 70 New A320 Family Aircraft

July 20, 2010

Chilean flag carrier LAN Airlines today placed the single largest engine order in the company's 81-year history, choosing the CFM56-5B engine to power 70 new Airbus A319/A320/A321 aircraft for delivery beginning in 2011. This also represents the single largest engine order by a Latin American airline.

The order is valued at approximately $2 billion U.S. at list price, including installed and spare engines and an associated maintenance agreement.

To support its new fleet, LAN chose a 12-year Rate for Flight Hour (RPFH) agreement with CFM. The RPFH is a comprehensive maintenance program customized to LAN Airlines specific needs under which CFM guarantees the maintenance cost on a dollar per engine flight hour basis.

The engine order, which is part of the airline's continued fleet renewal and expansion program, covers 30 A320 family aircraft announced in December 2009, in addition to 40 new A320s that are part of the Memorandum of Understanding announced earlier today by LAN and Airbus.

"We have built a good working relationship with CFM over the past decade and are confident it will continue to strengthen," said Roberto Alvo, senior vice president of Strategic Planning for LAN. "This new order allows us to combine the proven reliability of the CFM56-5B with a long-term service and support package that will help us keep our costs predictable and allow us to focus on serving our customers."

LAN became a CFM operator in 2000 with the delivery of its first CFM56-5C-powered Airbus A340-300 long-range four-engine airplane. The airline currently operates five A340s.

"This is the beginning of a great new era between LAN and CFM," said Kevin McAllister, vice president of sales for CFM parent company GE Aviation. "LAN is consistently ranked as one of the top airlines in the world and we consider it an honor and a privilege to be a part of this world-class team."

LAN Airlines was formed in October 1929 as a domestic Chilean carrier. Today, the airline is one of the leading passenger and cargo airlines in Latin America and serves 70 destinations throughout Latin America, the United States, the Caribbean, Europe, and the South Pacific

CFM International is a 50/50 joint company between Snecma (Safran group) and GE.

Jamie Jewell

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Charles Soret

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Perry Bradley

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Talal Ahmed Almahmood

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