GE to perform maintenance on JetBlue's CF34 engines (UPDATED)

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GE Engine Services will perform maintenance on the General Electric CF34 engines that power JetBlue Airways' fleet of more than 50 Embraer 190 aircraft, according to a filing today by the New York-based carrier.

The announcement comes less than two months after JetBlue reported it performed more than expected overhauls on its CF34-10E engines during the first quarter of 2013.

The unplanned overhauls cost JetBlue an additional $20 million in maintenance expenses during the quarter, the carrier said.

The service agreement, outlined in a filing by JetBlue with the US Securities and Exchange Commission, calls for GE Engine Services to carry out work under a "pre-determined maintenance" program with a 9.2 year term.

The agreement "transfers risk to third-party service providers" and fixes the amount JetBlue will pay per flight hour for maintenance and repairs, the filing says.

It adds that JetBlue's costs could fluctuate based on factors such as the size of its fleet and actual flight hours accumulated by the aircraft.

JetBlue did not disclose financial details about the agreement and declined to discuss the deal. GE, which manufactures the engines, could not be immediately reached.

In July 2012, GE Aviation announced JetBlue signed a 15-year agreement under which GE would provide maintenance, repair and overhaul of the CF-34 engines.

JetBlue's initial deal to acquire CF-34s for an order of 100 Embraer 190s was valued at more than $600 million, according to a GE 2003 media release.

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etBlue currently has 58 E-190s in its fleet, 26 on order and options for an additional 56, according to Flightglobal's Ascend Online database.

During JetBlue's 25 April first quarter earnings call, chief executive David Barger said "teething pains" with the E-190s helped push the carrier's maintenance costs up 30% year-over-year to $114 million during the quarter.

The carrier had expected to perform 20 overhauls in 2013, but revised that number to 30, including 12 completed in the first quarter, Barger said.

He added that JetBlue and GE were "working proactively ... to manage these expenses going forward."

"As a young airline there was a lot of burden on us to be the worldwide launch customer for this airframe," he said. "I would have loved to have been a follower."

The overhauls are intended to increase the engines' reliability and service life, he added.

Despite unplanned maintenance, JetBlue has said the E-190 has been critical to the airline's business, particularly success on business-focused routes from its growing Boston hub.

This story was updated to include more details about previous GE and JetBlue agreements.