LOT Polish Airlines and General Electric Engine Services have agreed to form a joint venture that will maintain and overhaul aircraft engines at a facility in Warsaw.
The memorandum of agreement was signed on March 26, 1998, by Andrzej Slodownik, vice president of LOT Polish Airlines, and William Vareschi, president of GE Aircraft Services.
The new enterprise, which is expected to be created by the end of the year, will service the CFM 56-3 engines that power LOT`s Boeing 737 aircraft. This venture, GE`s first in Poland, is part of the company`s global strategy of developing new maintenance facilities in foreign countries in order to provide value to its customers.
“We chose LOT Polish Airlines because of its outstanding history of engine maintenance service and the high quality of its technical personnel,” said GE`s Vareschi.
This venture positions LOT as a significant player in the aviation services market on a global level. Closer to home, the agreement will likely lead to a reduction in costs of engine maintenance for LOT`s 15 planes outfitted with CFM 56-3 engines, the airline`s board predicts. The deal will also improve the utilization of LOT`s engine maintenance facility in Warsaw.
“We hope that this agreement will raise the value of LOT`s shares and improve the perspective of the future of privatization for LOT”, said Mr. Slodownik.
At first, the new venture will concentrate entirely on servicing LOT`s B737 engines, but will soon target other airlines for maintenance work. The new enterprise expects to garner a substantial amount of business in the region, but anticipates strong competition from Germany, Poland`s western neighbor.