June 18, 2013• Potentially valued at more than $1 billion U.S.
• Includes long-term service agreement
LE BOURGET, France - LATAM Airlines Group today signed a memorandum of understanding with CFM International to purchase CFM56-5B engine s to power 25 firm A321ceo and five firm A320ceo aircraft, in additional to options for 20 additional Airbus A321neo (current engine option) aircraft.
Once finalized, the agreement will be valued at approximately $1.1 billion U.S. at list price, including spare engines and a long term maintenance agreement. Under the terms of the rate per flight hour service agreement, CFM will guarantee engine maintenance costs on a dollar per engine flight hour basis.
"The reliability and efficiency of these engines is unmatched. This enables us to maintain and enhance our short haul cost leadership and to provide our customers with the best travel experience. The CFM56-5B very quickly became an important part of our fleet for our long term plans," said Roberto Alvo, chief corporate officer, LATAM Airline Group.
LAN has been a CFM customer since 2000 and TAM since 2005. In 2010, LAN placed the single largest engine order in the company's history when it chose the CFM56-5B engine to power 70 new Airbus A319/A320/A321 aircraft. TAM has ordered 50 CFM56-5B-powered A320 family aircraft. To date, they have taken delivery of a combined total of 76 aircraft.
"We are of course very pleased by LATAM's continued confidence in our products," said Jean-Paul Ebanga, president and CEO of CFM. "Two years ago, they were the first to operate our new CFM56-5B PIP engine we are pleased to saw that they had had a seamless introduction into their fleet."
"LATAM is one of the top airline groups in the world and we consider it an honor and a privilege to be a part of this industry-leading team," said Kevin McAllister, vice president of sales for CFM parent company GE Aviation. "We've worked hard to establish a solid partnership with the group and we look for to strengthening the relationship even further."
CFM 56-5B engines are a product of CFM International, a 50/50 joint company between Snecma (Safran) and GE. CFM, the world's leading supplier of commercial aircraft engines, has delivered 25,000 engines to date. The CFM56-5B engine powers every model of the Airbus A320 family and has been chosen to power nearly 60 percent of all A320 aircraft in service or on order.
About LATAM Airline Group
LATAM Airlines Group is the new name given to LAN Airlines as a result of the association with TAM. The association creates one of the largest airline groups in the world in terms of network connections, providing passenger transport services to about 150 destinations in 22 countries and cargo services to about 169 destinations in 27 countries, with a fleet of 318 aircraft. In total LATAM Airlines Group has more than 51,000 employees. For more information, visit www.latamairlinesgroup.net.