TAT Technologies Ltd. (NASDAQ: TATT - News) ("TAT" or the "Company"), a leading provider of products and services to the commercial and military aerospace and ground defense industries, announced today that its fully owned subsidiary, TAT Piedmont Aviation ("TAT-Piedmont"), and Honeywell International, had entered into a 10-year agreement for an exclusive worldwide Auxiliary Power Unit (APU) rental services for OEM authorized GTCP331-500 engine. This engine is installed in all Boeing 777 aircraft around the world. Under this contract TAT-Piedmont will offer rental services to airlines who are operating Boeing's 777 aircraft and will serve on behalf of Honeywell for any rental of Honeywell GTCP331-500 APUs to all of Honeywell's customers on an exclusive basis.
As part of this agreement, TAT-Piedmont acquired Honeywell's GTCP331-500 APU rental bank for approximately $6.5 million.
In addition, TAT-Piedmont and Honeywell entered into a binding MOU in which Honeywell committed to authorize TAT-Piedmont to provide MRO service to GTCP331-500 APU, and provide TAT-Piedmont relevant knowhow and parts, making TAT-Piedmont an authorized MRO services provider world-wide for this engine.
TAT Piedmont, having been a Honeywell channel partner for over 20 years, is engaged in the APU MRO services including for the APU GTCP331-200/250 which is mainly installed in the Boeing 767 and Boeing C-17 platforms. Three months ago, TAT Piedmont signed a 10 year agreement with Honeywell for the transfer of Honeywell's APU GTCP331-200/250 MRO contracts to TAT- Piedmont.
Mr. Zamir CEO of TAT stated: "This agreement is a significant step in the development of TAT-Piedmont as a major global player in the APU MRO services business. The GTCP331-500 APU engine which is installed in all Boeing 777 aircrafts around the world is expected to be in operations for the next few decades generating meaningful MRO business opportunities. The rental services agreement and, to a larger extent, the authorization to provide MRO services, consist of major growth opportunities for TAT. This agreement together with the recent agreement for the transfer of Honeywell's MRO contracts for the GTCP331-200/250 engine to TAT-Piedmont, strengthen the strategic relationships between TAT and Honeywell and prove the strong positioning of TAT-Piedmont as a global quality MRO services provider for a variety of APU engines to airlines, aviation players and military organizations".
Mr. Zamir also noted: "The introduction of the GTCP331-500 APU to our offering is expected to substantially increase the potential market size available for TAT-Piedmont. This new agreement is expected to add revenues and generate profits for TAT in the near future. A recovery of the airline and aviation industries in the mid-term will meaningfully enhance business volumes related to this agreement".