FARNBOROUGH, England - GE Engine Services, Inc. the world leader in total aviation services, has signed a multi-year agreement to maintain and overhaul engines of VARIG in a contract with a potential value of $1 billion.

The 10-year contract covers the majority of engines powering VARIG's aircraft fleet, including:

• GE CF6-80C2 engines (Boeing 767/747, MD-11)
• GE CF6-50 engines (DC-10)
• CFM56-3 engines (Boeing 737)
• GE90 engines (Boeing 777)

The majority of these engines will be maintained under a Maintenance Cost Per Hour (MCPH)^SM agreement. The innovative MCPH package provides engine maintenance based on a flat rate per engine flight hour, thus allowing VARIG to budget their maintenance costs more accurately. Approximately 44 of the engines will be maintained on a time and materials basis.

VARIG, based in Rio de Janeiro, Brazil, is the largest airline in South America.

"VARIG is an important, strategic customer with a long history with GE," said Bill Vareschi, president and chief executive officer of GE Engine Services, Inc. "This agreement is one of several recent accords reached with VARIG that strengthens this relationship. We are gratified by VARIG's confidence in our products and services."

GE Engine Services is on track for a record sales year of nearly $5 billion in 1998. The company provides comprehensive overhaul and repair of aircraft engines, components, and accessories of GE Aircraft Engines, and the engines of CFM International, the 50/50 joint company of Snecma of France and General Electric Company of the United States, as well as engines produced by other manufacturers.