We have been following a consistent strategy in services for a number of years, focused on generating value for our customers and ourselves by delivering high equipment availability at an affordable and predictable cost. These principles are fundamental to developing and sustaining the collaborative long-term relationships that underpin our success in the marketplace.

Under TotalCare, in the civil aerospace market, and similar contracts in defence aerospace, energy and marine, we provide services over the long term at fixed prices. We are well-qualified to manage the risks we assume in such contracts through our knowledge of the product and the data we capture in respect of its service life.

In the defence aerospace sector we provide these services under the banner Mission Ready Management Solutions. The UK Defence Industrial Strategy published in December 2005 cited our Spey and RB199 contracts as exemplars for the style of through-life support contract that will increasingly become the norm for the UK defence market.

In the civil aerospace market some 45 per cent, by value, of our fleet is now under our management. A notable contract was the TotalCare agreement signed by LCAL, allowing this leader in the leasing industry to provide an innovative, transferable engine-maintenance agreement with its aircraft.

Earlier investments to support our service business continue to deliver benefits: Aeromanager, our customer-care portal for the civil aerospace market, now provides access to our services for some 700 customers and over 10,000 users; Data Systems & Solutions retains a leadership position in the real-time equipment health-monitoring market, with a portfolio of more than 6,000 engines; and the Civil Operations Room is providing an around-the-clock-service to our customers. During 2005 we continued to invest, with the defence aerospace business opening its Operations Room in Bristol and the opening of our new repair and overhaul facility in Derby.

A feature of our engine repair and overhaul network is our partnership with customers and leading independent maintenance, repair and overhaul companies. The sharing of good practice across the network and the deployment of a common information-technology platform has enabled efficiency improvements and reduced turnaround times.

In 2006, our priorities for services will remain the same: innovation in service products to create value for customers and generate growth in our revenues; improvements in our service delivery capability; and further progress with the development of a responsive customer-focused service culture among our employees.