Honeywell Inks $1B Avionics and Maintenance Deal with AirTran

Monday morning Honeywell International Inc. announced it has signed a $1 billion avionics and maintenance deal with AirTran Airways, covering its entire fleet, including new aircraft. The deal will last through 2030. Honeywell will supply up to 150 new Boeing 737s with avionics, which means installing the hundreds of electronic systems involved with the operating of an aircraft. AirTran had 128 aircraft in its fleet as of February 2007; its latest deal with Honeywell applies to future maintenance for up to 250 aircraft. The maintenance will include such operations as lighting, mechanical components, Auxiliary Power Unit and wheels/brakes. AirTran AirTran Senior Vice President of Operations Steve Kolski called the deal "win-win" for both companies, while Honeywell V.P. Mike Madsen said that as the OEM, his company is "able to provide a comprehensive maintenance program with strong technical support and rapid turn-times, all of which enable AirTran to significantly reduce their investment in spares and spend more time flying." AirTran flies predominantly short-haul flights on the eastern seaboard. Both companies' shares were unmoved in the pre-market.

Sources: Press release, MarketWatch, AP, Reuters
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Earnings call transcript: Honeywell International, Inc. Q3 2007 Earnings Call Transcript

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