Qantas Announces Engine Maintenance Partnership with Lufthansa Technik

Sydney, 20 April 2008

Qantas said today that it would form a joint venture with global Maintenance Repair Organisation (MRO), Lufthansa Technik AG (LHT), to secure jet engine maintenance in Australia.

The Chief Executive Officer of Qantas, Mr Geoff Dixon, said the agreement would involve the sale of a 50 per cent stake of Qantas subsidiary Jet Turbine Services (JTS) to LHT.

"The partnership between LHT and JTS is one of the most significant commercial aircraft maintenance joint ventures in Australia, combining Qantas' expertise with that of the world's largest independent aircraft maintenance, repair and overhaul operator."

Mr Dixon said the arrangement would deliver valuable benefits both directly to JTS and to Qantas Engineering
by providing direct access to LHT's global customer network.

"This partnership is a positive step for JTS. Combining with one of the world's leading MROs will provide JTS with global expertise, improved technical capability and an increased scale of operation, which will further improve its growth prospects and provide Qantas Engineering with a world-class jet engine maintenance operation in Australia.

"The partnership is in line with Qantas' strategy of continuing investment in Australia when we can achieve the right combination of labour flexibility, productivity and capability."

Melbourne-based JTS specialises in overhauling General Electric (GE) and CFM type aircraft engines and employs 140 people.

Qantas had also signed a 10-year agreement with LHT to provide maintenance services for the Qantas Group's GE CF6 and CFM56-7 engines.

Qantas currently operated 124 CF6 engines, versions of which power B767-300, B747-400 and A330 aircraft. Qantas also utilised 66 CFM56-7 engines, which powered the airline's B737-800 fleet.

The LHT agreement covers GE engines only, Rolls Royce engine maintenance continues to be undertaken by Qantas' engine maintenance centre in Sydney.

Issued by Qantas Corporate Communication (Q3476)