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Into the stratosphere

Standard Aero pens huge deal with WestJet to service engines

By: Geoff Kirbyson

Posted: 06/18/2009 1:00 AM | Comments: 0 (including replies)

Standard Aero technicians will soon be working on much bigger engines as part of a more than $850-million deal with WestJet. (KEN GIGLIOTTI / WINNIPEG FREE PRESS)

WINNIPEG — Standard Aero is poised to fly with the big boys.

The Winnipeg-based aerospace firm has signed a more than $850-million deal with WestJet Airlines to service CFM-56 engines powering its 737 "next-generation" aircraft.

The 15-year agreement will see Standard Aero build a new $13-million facility at its complex near the Richardson International Airport. It will house 60 employees initially and 250 by the time it's fully up and running in 2012.

Ian Smart, Standard Aero's senior vice-president of airlines and fleets, said the deal is one of the two or three biggest it has ever signed. It's significant because the engines represent a jump into a new market -- powering planes that carry between 130 and 150 passengers. The CFM56-7 engines used by WestJet, which are produced by General Electric, are found under the hoods of 737s and Airbus 320s.

Previously, the biggest engines in its portfolio were CF-34s, which are used in regional jets carrying up to 90 people.

"It's a whole new part of the market. We'll start dealing with mainline carriers as well as regional carriers. What's really exciting is the length. That translates into stability for our organization, our employees and our investors," he said, rhyming off Southwest Airlines, Continental Airlines and AirTran Airways as potential customers.

"It's a made-in-Canada solution for WestJet. It adds more diversity to our Winnipeg site. In a downturn, the more diversity we have, the better positioned we are to manage our way through it."

Ken McKenzie, executive vice-president of operations with WestJet, said it opted to partner with Standard Aero because it wanted to work with another Canadian company and one that was not only close to its Calgary headquarters, but one that also shared the same corporate values.

"Standard Aero has a great reputation for doing quality work. These will be the largest engines they've overhauled but their past performance on the CF-34 was excellent," he said.

McKenzie said other competitors for the business were based in Mexico, the United States and France, all of which would have resulted in significant downtime for shipping, not to mention the risk of damage in transit.

"Starting in 2012, our planes will fly into Winnipeg on a regularly scheduled flight and stay there overnight. One or both engines will then be removed and replacement engines placed on the aircraft the same night. The next morning, the plane will be back in service," he said.

Vic Gerden, executive director of the Manitoba Aerospace Association, said the WestJet contract is great news, not only for Standard Aero but for the entire local aerospace industry. In addition to the direct employment, there will also be indirect jobs that result from the engine work, he said.

"There are a lot of these engines and variants of the CFM-56 engine that are powering aircraft around the world, so ultimately there could be other opportunities to grow this aspect of their business," he said.

Boeing Commercial Airplanes, which manufactures the next-generation 737 aircraft from its headquarters in Washington state, delivers 30 of them to customers around the world each month. Smart said Standard Aero's employee base is on schedule to hit 1,500 by 2012, an all-time high.

geoff.kirbyson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition June 18, 2009 A3

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