SES Signs $30 Million Conact With China Southwest Airlines

July 23, 2002

FARNBOROUGH, United Kingdom July 23, 2002 Shannon Engine Support (SES) has signed a 10-year agreement with China Southern Airlines to provide comprehensive, guaranteed CFM56-7 spare engine support for the airline's Boeing 737-800 fleet. In addition, SES and China Southern signed a five-year extension to their original agreement for CFM56-3 spares support. The two contracts are worth approximately $30 million.

SES is a wholly-owned subsidiary of CFM International (CFM). CFM is a 50/50 joint company between Snecma Moteurs (Safran Group) of France and General Electric of the United States and produces the world's best-selling commercial engine product line, the CFM56 family.

China Southern has been an SES customer since 1990. The airline operates more than 30 CFM56-3-powered 737s and will begin taking delivery of the first of 20 737-800s powered by the CFM56-7 later this year. Deliveries will continue to 2005.. Under the terms of the agreement, SES guarantees China Southern access to CFM56-3 and -7 spare engines to help manage shop visits. "China Southern Airlines and SES have developed a very close business relationship over the past 12 years cooperation," said Madame Wei Guilan, Deputy General Manager of Engineering & Maintenance for China Southern Airlines. "SES spare engine support gives CSA maximum flexibility and reliability in arranging their CFM56 spare engine requirements."

"China Southern was our first customer in China, so we're obviously pleased that they have chosen to keep SES as an integral part of their long-term fleet planning," said Liam Meade, sales director in China for SES.

SES specializes in flexible, cost-effective engine leasing solutions tailored to airlines' specific requirements. Spare engine leasing provides tremendous cost savings to airlines. They avoid the acquisition cost of a spare engine as well of the expense of underused assets. SES also offers short-term engine leases, operating leases, sale/lease back, and engine trading.

SES has a portfolio of 130 CFM56 engines, including the CFM56-3 engine for the Boeing 737-300/-400/-500, the CFM56-5A and CFM56-5B for the Airbus Industrie A320 family, the CFM56-5C for the Airbus A340, and the CFM56-7 for the 737-600/700/-800/-900. The company supports 40 customers worldwide, predominantly in Europe and China.

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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