Qantas $2 billion deal on engines for new A320-neo jets

IN the biggest deal ever for GE Aviation in Australia, Qantas has ordered $2 billion worth of latest generation engines to power its forthcoming fleet of 78 Airbus A320-neos.

The engine Qantas has chosen is made by CFM International, a partnership between GE and a large French aerospace conglomerate, the Safran Group. The deal will mean at least 156 engines (plus a few spare units) will enter service under the wings of the ultra-efficient A320-neos.

Qantas's budget airline Jetstar will be the first in the Qantas group to use the new craft as they enter service from 2016.

The Qantas chief executive, Alan Joyce, said the engine had been chosen for the A320-neo due to its performance, fuel efficiency and maintenance regime.

The deal was managed through GE's local aviation division, which will book the order's revenue here in contracts between the airline and GE in the US.

The managing director of GE Aviation for Australia and New Zealand, Max York, said the deal would help lower Qantas' costs.

"We're trying to bring them two things: reduced cost of ownership through [less] maintenance and through improved fuel burn," Mr York said.

The new-generation jet engine, called the LEAP-1A, boasts 15 per cent lower fuel consumption (and a commensurate cut in carbon dioxide emissions), 50 per cent lower nitrogen emissions and - importantly for people living near major airports or under flight paths - a 75 per cent reduction in engine noise compared with CFM's engines of today.

A 15 per cent fuel reduction represents a huge cost saving for Qantas, as it spends about $4 billion a year on jet fuel.

The LEAP features durable composite fan blades designed to withstand bird strikes, strong yet light composite nacelles (or engine cowlings) and managed air flows that stop runway grit being sucked into engine compressors. Such innovations help the engine deliver fuel savings as it ages, the company says.

The features help stretch the service interval to 16,000 take-offs and landings, the equivalent of eight to 10 years of service, Mr York said.

"On the maintenance side, it all about 'the cheapest [maintenance] shop is the one you don't have'.

"In a 20-year aircraft life, it might only have one or two shop visits in its life," Mr York said.

The announcement comes as Qantas is planning to rationalise its heavy maintenance bases in Australia, with bases at Melbourne Avalon and Brisbane airports under review, citing a reduction in maintenance requirements as new technology arrives. Yesterday marked the final day of union negotiations, with the airline expected to announce its decision on which base or bases will close by mid-May.