International Aero Engines (IAE) is to upgrade the 30 Etihad Airways V2500 engines including spares that power the four Airbus A320 family aircraft in the carrier’s fleet.

Under the $200m contract, the engines will be upgraded to V2500 SelectOne standard during their scheduled overhauls.

The V2500 SelectOne offers an additional 1% fuel burn advantage, corresponding reduction in CO2 emissions and improves time-on-wing by up to 20%.

Etihad Airways CEO James Hogan said that transferring engine maintenance responsibility to IAE allows it to focus upon its core strengths.

“The engine deal will deliver significant cost benefits for Etihad, especially in terms of lower fuel consumption, reliability and increased flying time between maintenance overhauls,” he said.

IAE is a aero engine consortium of Pratt & Whitney, Rolls-Royce, Japanese Aero Engines Corporation and MTU Aero Engines.