Air NZ expands General Electric contract

Air New Zealand has signed an agreement with global energy giant General Electric designed to secure the future of its Auckland-based marine and industrial engine operation.

The new agreement, effective from the end of this month, will see Air NZ's engineering division carry out work on GE Energy's LM2500 and LM5000 aeroderivative engines for the next five years.

Aeroderivative engines -- as the name implies -- are derived from jet engines. They are used as turbines in natural-gas fueled power plants and also have marine, industrial, and military applications. They operate at very high compression ratios and tend to be very compact.

Air NZ and GE have had a servicing agreement for the past 25 years, but the latest development means the Auckland workshop can now seek out work on GE engines used by third parties like the Australian and New Zealand navies.

The relationship could be extended further under a recently submitted proposal to support the Royal Australian Air Force.

The value of the agreement was not disclosed.

Shares in Air NZ were trading up 2c at $1.11 by mid afternoon.

General Electric, the firm founded by Thomas Edison over 100 years ago, is one of the world's most diverse manufacturing, services and technology companies.

- NZPA