EasyJet signs new maintenance contract

Budget airline easyJet signed a major aircraft maintenance deal today, in a move expected to reduce its costs by more than £10m (€14.7m) over the next year.

The ten-year tie-up will see Zurich-based SR Technics provide full technical management, excluding engines, for the airline’s fleet of 54 Airbus A319s, which is planned to rise to 120 aircraft by 2008.

EasyJet said the deal – worth $1bn (£552m/€813m) – would lead to a 25% saving in the cost of maintaining its aircraft over the life of the contract, including £10m (€14.7m) in the coming financial year.

It described the contract as one of the largest deals ever awarded by an airline for maintenance of a single aircraft type.

SR Technics, whose other customers include Virgin Atlantic and Cathay Pacific, will continue to provide full support for easyJet’s fleet of 55 Boeing 737s.

Today’s contract also includes an improvement to the terms of the airline’s existing contract for the maintenance of its 32 Boeing 737-700s as a result of the synergies now available to SR Technics because of the combined operation.

Ray Webster, chief executive of easyJet, said: “SR Technics is a long-established maintenance provider currently with over 100 customers around the world.

“It has an excellent reputation for a quality service offering in the industry and we are delighted to be continuing our relationship with them.”

He added that the contract showed the group’s commitment to improving its cost base to help underpin its business and earnings over the coming years.

Earlier this month the company pointed the City towards higher profits after it carried 18% more passengers on its planes during July than a year earlier.

The carrier, which had previously told the City that it was unlikely to match its 2004 profits performance, said revenues were improving and it was maintaining a squeeze on costs.