International Aero Engines has been awarded a contract worth up to $1.5bn (£0.92bn) to supply Jetstar Airways with V2500 engines to power a new fleet of 50 Airbus A320 family aircraft.
The contract includes options and purchase rights on up to 40 more aircraft.
The agreement, which is for the latest V2500 SelectOne build standard, is worth around $1.5bn if all the options and purchase rights are exercised.
The aircraft will be distributed among the mainline Jetstar fleet based in Australia and New Zealand, as well as with Jetstar Asia/Valuair of Singapore, which is an existing equity investment by the Qantas Group.
In addition, the airline has signed a $2bn long-term IAE Aftermarket Services agreement covering these new engines, and also those installed on 40 IAE-powered aircraft that the Jetstar businesses currently operate.
According to IAE – a multinational consortium, the shareholders of which include Pratt & Whitney, Rolls-Royce, Japanese Aero Engines Corporation and MTU Aero Engines – the V2500 SelectOne build standard delivers an additional one per cent fuel burn and a corresponding reduction in CO2 emissions.