TUI Travel LEAP-1B Commitment potentially valued at $1.56 Bn

TUI Travel PLC and CFM International today celebrated the leisure travel group’s proposed commitment to Boeing to purchase 60 Boeing 737 MAX 8 and MAX 9 aircraft with 120 LEAP-1B installed engines.

The CFM business generated by the order is valued at $1.56 billion U.S. at list price. The transaction is pending TUI Travel shareholder approval. TUI Travel also has options on 60 additional LEAP-powered 737 aircraft.  TUI Travel is scheduled to begin taking delivery of the MAX aircraft in 2018.

“We expect that CFM LEAP-1B engines will significantly reduce fuel burn and CO2 emissions compared with today’s most fuel-efficient single-aisle aircraft and will therefore enhance our environmental performance,” said Peter Long, Chief Executive, TUI Travel. “They were an important component of our decision to order the B737 MAX. Having enjoyed excellent reliability and operating economics from CFM products, we look forward to welcoming this future CFM engine into our fleet.”

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“This order validates the decades of research and development we have invested to create the LEAP engine,” said Jean-Paul Ebanga, president & CEO of CFM International.  “Although we don’t always talk about it, CFM has long been focused on providing environmentally friendly engines.  We were the first to introduce low emission combustors in the mid-1990s and are taking that to the next level with the TAPS combustor on LEAP.  The fact that this featured heavily in TUI’s decision is highly gratifying.”

“TUI Travel is a long-time customer; we have worked together for more than 25 years,” said Gaël Méheust, vice president of Sales for CFM.  “We are obviously very pleased to enter this exciting new phase with them.”

CFM International has (CFM) set aggressive technical targets for LEAP performance and testing to date confirms that the engine is meeting those goals.  Compared to today’s best engines, the LEAP engine will provide TUI Travel with 13 percent better engine fuel efficiency, which equates to an equal reduction in CO2 emissions; a 50 percent margin compared to today’s oxides of nitrogen (NOx) requirements; and meet the newly announced 2018 ICAO noise requirements with significant margin and comparable maintenance costs.

The LEAP engine is a product of CFM International (CFM), a 50/50 joint company between Snecma (Safran) and GE and the world’s leading supplier of commercial aircraft engines.

Source: CFM International
Date: Jun 18, 2013