Re Contract

7 February, 2006

           ICELANDAIR SELECTS ROLLS-ROYCE TRENT 1000 FOR BOEING 787s           

Icelandair, part of FL Group, has selected the Rolls-Royce Trent 1000 engine to
power its new fleet of Boeing 787 Dreamliners.

The order, potentially worth up to US$650 million at list prices, is for
engines to power two firm aircraft, plus up to five purchase rights, and
includes a lifetime TotalCare® maintenance agreement. Deliveries are scheduled
to begin in 2010.

Jón Karl Ólafsson, President and Chief Executive Officer of Icelandair, said:
"Rolls-Royce has provided a solution which is clearly the best option for
Icelandair. We are confident the Trent 1000 will deliver competitive cost of
ownership with strong reliability levels and, through TotalCare, will be
supported by the most comprehensive maintenance service available in the
industry today."

Nick Devall, Executive Vice President, Civil Large Engines at Rolls-Royce,
added: "The partnership of the Boeing 787 and the Trent 1000 will enable
Icelandair to grow its international route network while offering world-best
levels of technical efficiency and operating economics. This selection marks
the continuation of a long and fruitful relationship between Icelandair and
Rolls-Royce."

Firm orders have now been placed for 87 Trent 1000-powered Boeing 787s. The
engine has also been selected by launch customer ANA (All Nippon Airways), Air
New Zealand, Northwest Airlines, LOT Polish Airlines and newly formed leasing
company, LCAL.

NOTE TO EDITORS

 1. Icelandair and Rolls-Royce have been working together since 1957 when the
    airline introduced the Vickers Viscount, powered by Dart engines. Since
    then, Icelandair has operated a number of Rolls-Royce powered aircraft,
    including Fokker F27 Friendships (Dart), Canadair CL-44s (Tyne) and Boeing
    757s (RB211-535).
   
 2. The Trent 1000 is the launch engine for the Boeing 787. It will run for the
    first time this month and is due to make its maiden flight on the
    Rolls-Royce flying test bed in the first quarter of 2007. Certification is
    scheduled for Summer 2007, shortly before the 787's first flight. The Trent
    1000 will enter into service on the 787 with ANA in 2008.
   
 3. The Trent 1000 is the fifth member of the Trent series, the first of which
    entered service in 1995. By the time the Trent 1000 begins commercial
    operations, previous versions of the Trent will have accumulated around 30
    million flying hours.
   
 4. Risk and revenue sharing partners on the Trent 1000 programme are Carlton
    Forge Works, Goodrich Corporation, Hamilton Sundstrand, Industria de Turbo
    Propulsores (ITP), Kawasaki Heavy Industries (KHI) and Mitsubishi Heavy
    Industries (MHI).
   
 5. TotalCare agreements, tailored to meet the business requirements of
    individual customers, offer a range of services covering all aspects of
    engine support including engine fleet management, inventory management,
    repair and overhaul, provision of lease engines and line-side support.
   
 6. FL group is an investment company with an emphasis on investments in the
    flight and tourism industry. Through its hub in Iceland, Icelandair's
    international route network connects 22 major cities in Europe and the
    United States.
   
For further information contact:

Annalie Brown

Communications Manager - Civil Aerospace

Rolls-Royce

Derby, UK

Tel: [phone]

Email: [e-mail]