Andrew Chuter/LONDON
British Airways is to outsource maintenance and component support for the airline's entire fleet of Airbus A320s and McDonnell Douglas DC-10-30s to FLS Aerospace. A contract is due to be signed later this month.
The tie-up with BA will be the culmination of a hectic month for FLS Aerospace. The Danish-owned, UK-based maintenance company has signed a memorandum of understanding to acquire Irish rival TEAM Aer Lingus, and at the same time has announced deals which have increased its 1997 order intake from £130 million ($216 million) to £180 million.
The BA contract, believed to be valued at close to £50 million, will also task Europe's largest third-party maintenance company with painting the majority of BA's narrowbody fleet of aircraft in the airline's new corporate colours. BA and FLS decline to comment
The negotiations with BA extend a relationship between the two companies which has already seen FLS subcontracted to undertake overnight transit C checks on Continental Airlines DC-10s at Gatwick on behalf of BA and undertake some 747 maintenance.
To make better use of capacity, the two companies have also agreed to swap hangars on either side of Gatwick's single runway.
The A320 contract, to be carried out at London Stansted Airport, will run for five years, while the DC-10 work will go to Manchester for the next three years.
Completion of the deal would strengthen FLS' chances of becoming the maintenance provider for the "no-frills" airline being set up by BA at Stansted.
FLS Manchester is further extending its DC-10 work after securing a three-year £20 million contract with Continental for C and D checks on the airline's entire 31-strong fleet. The contractor is now completing a five-year deal involving heavy maintenance on 26 of the carrier's DC-10s.
The second, bigger, contract is with Caledonian Airways for the full maintenance support of two DC-10-30s and six Lockheed L-1011 TriStars at Gatwick. The value of the work is estimated to be worth in excess of £30 million.
The volume of work now being booked at FLS - about twice the 1996 level - has left the company capacity constrained at its three UK operations. In a bid to acquire additional growth capability, it is now looking at purchasing Aer Lingus' maintenance arm TEAM. FLS has a 90-day period of exclusivity while it undertakes due diligence.
The Danish contractor reportedly beat AlliedSignal and BF Goodrich to the deal, but both companies are waiting in the wings to see if FLS is satisfied by its inspection of the accounts and labour agreements.
TEAM Aer Lingus has more staff than FLS, with only about half the turnover. The Dublin-based operation almost went out of business about two years ago, largely because of strikes over management attempts to change working practices. State aid, which caused FLS unsuccessfully to complain to the European Commission, and an agreement with the unions, rescued the situation.
Additional reporting by Ian Goold.
Source: Flight International
