Volvo 2003 Annual Report Download - page 23

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21
In 2003, a contract was signed with SAS,
whereby Volvo Aero became the principal
supplier of engine overhaul services for
SAS/Spanair’s fleet of MD80 aircraft. The
contract covers the period up to and includ-
ing 2006. Also in 2003, Skyways Express
and Volvo Aero signed an agreement where-
by Volvo Aero will become Skyways’ exclu-
sive supplier of engine overhaul and equip-
ment maintenance services for the PW125
engines. The agreement, based on a price
per hour of flying time, is valid until 2005 and
is estimated to be worth at least SEK 100 M.
Volvo Aero also signed overhaul contracts of
JT9D engines for General Electric and the
UK freight carrier MK Airlines.
An agreement was also signed with MTU
Aero Engines of Germany to manufacture
components for the GP 7000, an engine
intended for Airbus’s forthcoming A380
jumbo jet. Volvo Aero will produce the low-
pressure turbine case over a 15-year period.
Volvo Aero is already a partner in the Rolls-
Royce Trent 900 engine program, the sec-
ond engine alternative for the A380.
Volvo Aero has been a partner with
General Electric since the 1980s and in
2003 Volvo Aero and G E agreed to cooper-
ate as partners in the new LMS100 gas tur-
bine. Volvo Aero will deliver a number of key
components for the new environmentally
friendly gas turbine. The total value of the
contracts is expected to be USD 800 M over
a 20-year period.
Ambitions for 2004
The aviation industry’s sharp downturn
necessitates continued adaptation to new
conditions. Restoring profitability is the most
important amibtion for 2004, while opportu-
nities for increasing market shares are also
created during a recession.
Accordingly, Volvo Aero aims to continue
building its components business and will
make strong efforts to become involved in
engine programs, either as a partner or long-
term supplier.
In the service sector, major efforts are
being made to develop the customer offering
and sign long-term contracts with airlines,
partners and other customers.
Net sales per market Volvo Aero
SEKM 2001 2002 2003
Western Europe 4,788 3,422 3,951
Eastern Europe 87 28 49
North America 5,841 4,573 3,301
South America 187 177 152
Asia 708 497 428
Other markets 173 140 149
Total 11,784 8,837 8,030