WestJet signs multi-billion-dollar engine deal, bringing aviation hub to Calgary

WestJet and Lufthansa Technik have signed a 15-year agreement for aircraft engine maintenance services, marking the largest contract in WestJet’s history. 

Under the multi-billion-dollar deal, Lufthansa Technik will provide maintenance for the CFM International LEAP-1B engines that power WestJet’s Boeing 737 fleet. 

As part of the agreement, Lufthansa Technik will establish a new engine repair facility in Calgary, including a test cell for next-generation engines. 

The facility is expected to begin operations in 2027, with WestJet as its launch customer.

WestJet Group Chief Executive Officer Alexis von Hoensbroech said the agreement will help bring key engine repair operations to Canada, improving efficiency and cost certainty for the airline. 

“This historic contract award will allow us to bring critical engine repair operations home to Canada and provide greater efficiency and cost certainty to a critical part of our operations, all while demonstrating our commitment to improving our competitiveness and supporting the Alberta economy,” he said. 

“We are proud to partner with Lufthansa Technik. This is an extraordinary moment for WestJet, our guests, WestJetters, Western Canada’s communities and our suppliers.”

Lufthansa Technik’s expansion in Western Canada aligns with its global growth strategy, as demand for maintenance services on CFM LEAP-1B engines increases. 

“This agreement represents one of the largest awards ever granted to any MRO provider for CFM LEAP engines worldwide,” said Soeren Stark, chief executive officer of Lufthansa Technik. 

“It underlines Lufthansa Technik’s leading position in the support of new-generation engine types. We greatly value WestJet’s strong confidence in our extensive expertise and our ability to serve as a trusted long-term partner.”

Facility development and economic impact

The new facility will be developed in collaboration with multiple partners, including the Government of Canada, the Government of Alberta, Opportunity Calgary Investment Fund (OCIF), Calgary Economic Development, Calgary International Airport, and the Canada Infrastructure Bank. 

The Calgary Airport Authority has signed a long-term lease agreement with Lufthansa Technik for the engine maintenance and test cell facility, which will occupy nine acres at Calgary International Airport.

The Government of Canada, through PrairiesCan, is investing $8 million in the project, while the Government of Alberta is providing $7.45 million in support, including funding from the Investment and Growth Fund and the Aerospace Workforce Development Grant.

 Alberta Premier Danielle Smith said the province welcomes Lufthansa Technik’s expansion. 

“This major project will have a far-reaching impact on our economy and it serves as a testament to the strong levels of investor confidence in our province,” she said. 

“Alberta continues to be one of the most business-friendly jurisdictions in North America.”

The initiative is expected to create up to 160 jobs in Calgary by 2030. 

Construction is scheduled to begin in mid-2025, with completion anticipated in 2027. 

A training centre will open this year to equip employees with necessary skills, and recruitment for various positions will begin soon.

Federal officials say the project strengthens Canada’s position in the aviation sector. 

“This new, state-of-the-art facility is a major step toward making Calgary and Alberta global leaders in aviation innovation,” said Terry Duguid, minister for PrairiesCan. 

“We beat out strong competition to secure this opportunity, showcasing our region’s innovative spirit and commitment to reducing emissions.”

Aviation growth in Western Canada

The partnership reinforces Calgary’s role as a key hub for aerospace innovation. 

Calgary Mayor Jyoti Gondek said attracting Lufthansa Technik is a major milestone for the city’s aviation sector. 

“By attracting industry leaders like Lufthansa Technik, we are ensuring our city remains a beacon for forward-thinking talent and groundbreaking technological advancements,” she said.

The Canada Infrastructure Bank is also investing in the facility, providing $172 million in financing. 

“This investment will strengthen Canada’s aviation infrastructure, bring long-term, high-quality jobs and support economic growth in the region,” said Ehren Cory, CEO of the Canada Infrastructure Bank.

WestJet’s commitment to regional development is evident in its global aviation hub in Calgary, which has grown to become the most connected mid-sized hub in North America. 

“This next phase of WestJet’s growth will not only strengthen Calgary’s position in the global aviation landscape but also enhance the economic prosperity of the region,” said von Hoensbroech.

Local economic leaders say Lufthansa Technik’s decision to establish its Western Canada headquarters in Calgary will provide long-term benefits. 

The Calgary Airport Authority, which will oversee the planning and construction of the facility, says the investment will provide critical maintenance infrastructure for airlines. 

“By building this cutting-edge facility in Calgary, we ensure that WestJet and all Canadian airlines will have access to reliable, cost-effective, and efficient maintenance services while building essential infrastructure in engineering, training, and enterprise,” said Chris Dinsdale, president and CEO of the Calgary Airport Authority.

Lufthansa Technik’s expansion is part of its “Ambition 2030” strategy, which focuses on investments in core operations and global growth. 

The company plans to significantly scale up its quick-turn maintenance capabilities and strengthen its presence in North America.

As Calgary continues to establish itself as a leader in aerospace innovation, Calgary Economic Development President Brad Parry says Lufthansa Technik’s investment is a major achievement. 

“After years of hard work and collaboration to showcase our city and build connections with industry partners, we are excited to see Lufthansa Technik land in the Blue Sky City,” he said. 

“Calgary’s competitive business environment and deep talent pool position us for future growth.”