04/06/99
AirLiance Materials Becomes Exclusive Supplier of Surplus Materials for Partner Airlines

Partners to enjoy significant cost savings through purchase of redistributed spare parts

Chicago, IL (April 6, 1999) - AirLiance Materials, the joint company formed by United Airlines, Air Canada, and Lufthansa Technik, announced today that effective May 1st it will become the exclusive supplier of surplus parts to its partner airlines.

Since September of 1998, AirLiance Materials has held an exclusive consignment agreement for surplus parts with its partner airlines and has been building the infrastructure and facilities necessary to support the combined fleet operations of United Airlines, Air Canada, and Lufthansa Technik. In total, the partner airlines maintain a fleet of over 1,000 single-aisle and widebody aircraft and acquire more than $1 billion dollars (US) in spare parts each year.

During the first phase of operation, AirLiance Materials has built its staff to nearly one hundred people including experienced purchasing, sourcing, quality, customer sales support, and information technology professionals. The company is now capable of receiving and responding to SPEC2000 inquires, and has transferred the majority of its partner airlines spare engine parts, airframe components, and avionics to its state-of-the-art warehouse near ORD (Chicago O' Hare) airport.

According to David Sisson, President and CEO of AirLiance Materials, one of the original charters of the company was, "To reduce maintenance costs for our partner airlines through an exclusive supplier agreement." He added that, "Increasing maintenance costs are an issue that is of concern to every airline, and AirLiance Materials was formed, in part, because we knew that consolidating the inventory of the three partners through a single organization specifically staffed and equipped to handle spare parts provisioning was the most efficient way to reduce costs while maintaining the same level of quality."

In addition to supporting its partner airlines, AirLiance Materials is also providing highest quality, previously owned inventory to a growing list of airline and MRO customers. Through AirLiance Materials, airlines can take advantage of economies of scale and operational experience simply not available from any other supplier. Currently, AirLiance Materials offers its airline customers material sales, consignment sales, purchasing services, distribution services, and repair management.

To support this growing base of international airline customers, the company offers 24-hour a day, 7 day a week ordering, as well as same-day shipping, just-in-time delivery programs and AOG (Aircraft On Ground) support.

To ensure maximum operational safety for all its customers, AirLiance Materials applies the highest standards of traceability and quality assurance based on the vast operational experience of the partner airlines.

Mr. Roscoe Musselwhite, Vice President of AirLiance Materials explained, "This company is literally an alliance of airlines for the benefit of airlines, and we felt very strongly about raising the industry 'bar' when it comes to quality. Before we ever received the green-light as the exclusive supplier of surplus material for our partner airlines, our quality systems were reviewed and scrutinized to a level that far exceeds FAA or other regulatory requirements. We now have the quality systems and staff necessary to support our partner airlines, and airlines around the world, with a new level of service and support."

Currently, the airframes supported by AriLiance Materials include A340, A330, A321, A320, A319, A310 and A300 aircraft; B777, B757, B767, B757, B747 B737, and B727 aircraft, CRJ aircraft, MD11, MD80, DC10, DC9, DC8 aircraft. Engines supported include CF6-50, CF6-80, CFM-34, CFM-56, JT3, JT8, JT9, PW100, PW2000, PW4000, and V2500.

Headquartered in Chicago, Illinois, AirLiance Materials is a leading aftermarket material supplier. United, Air Canada and Lufthansa Technik currently trade nearly $100 million (US) in aftermarket material each year. This "internally" generated business represents close to 10% of the world's current material market. United Airlines, Air Canada and Lufthansa German Airlines combined operate more than 1,000 aircraft and generate 17% of the world's available seat miles. For more information or to arrange an interview, contact: Michael King, King Group Integrated Communications, telephone 805-462-3000, fax 805-462-3002, e-mail mking@kinggroup.com.

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