Dear CFM Customers:

In the final few days of 2009, in the presence of China’s Premier Wen-Jiao Bao and France’s Prime Minister Francois Fillon, I had the honor of signing, with COMAC’s Chairman Zhang, the Letter of Intention with which the Commercial Aircraft Corporation of China (COMAC) formalized its selection of the advanced LEAP-XC1 engine as the sole western powerplant for the new COMAC C919 aircraft. The new airplane is in the early stages of development and is scheduled to enter commercial service in 2016.

This is an historic win and a watershed event for CFM for two reasons:

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First, we believe that COMAC, which was formed in March 2008, will eventually become the world’s third largest aircraft manufacturer. China’s demographics, history, geography, and economics make this nearly a foregone conclusion. By selecting the LEAP-X1C engine, COMAC has chosen the industry’s most advanced technology and performance, coupled with the legendary reliability of the CFM product line.

This selection is a logical extension of the long relationship CFM has shared with the Chinese aviation industry since the first CFM56 engines were introduced there in 1985. At that time, CFM was the first Western engine manufacturer in China. Today, there are more than 2,300 CFM56 engines in service or on order there.

Second, this selection is the first act of a larger drama, which may unfold in the coming months, as both Airbus and Boeing continue to evaluate the potential of re-engining the current A320 and the B737 families. If these programs go forward, LEAP-X technology could bring 10 to 15 percent lower fuel burn to the aircraft, as well as reducing the overall noise footprint by 75 percent.

As these events unfold, CFM continues to provide improvements to the current product line. The new CFM56-7BE variant has completed a grueling 150-hour block test and is on schedule to begin flight tests early in the second quarter of 2010. Coupled with aircraft improvements, the –7BE will provide a two percent fuel burn improvement and reduce maintenance costs by up to 4 percent when it enters service in mid-2011.

At the same time, CFM is in discussions with Airbus to bring a performance improvement package to the current A320.

CFM continues to strive to bring more value to our customers. As always, I welcome your thoughts on how well you think we are fulfilling that commitment.

Warmest regards,

Eric Bachelet