Re Contract

13 September, 2007

          ICELANDAIR AWARDS $100m MAINTENANCE CONTRACT TO ROLLS-ROYCE          

Rolls-Royce has signed a new engine overhaul agreement with Icelandair,
covering the RB211-535s which power the airline's fleet of 21 Boeing 757s.

The five year contract is valued at $100 million and the work will be carried
out at the Rolls-Royce Aero Repair and Overhaul (AR&O) facility in Derby, UK.

Jens Bjarnason, Senior Vice President of Technical Services at Icelandair,
said: "We have enjoyed a 15-year relationship with the Rolls-Royce Aero Repair
and Overhaul business, during which time we've received only the best in terms
of service levels. As the original manufacturer, Rolls-Royce can offer us
unparalleled knowledge of the engines as well as a mature understanding of our
operations."

Miles Cowdry, President - Services for Rolls-Royce, added: "We're delighted
that Icelandair has decided to extend its services links with us. A high level
of trust has been built between our two companies over the years and this is
reflected in the decision to continue this long and successful relationship."

The links between Rolls-Royce and Icelandair set a record in 2000, when one of
its -535 engines became the first to achieve more than 40,000 hours on wing.

Last year, Icelandair selected the Rolls-Royce Trent 1000 to power up to seven
Boeing 787s it has on order for delivery from 2010.

NOTE TO EDITORS:

 1. Icelandair Group is a holding company with 10 independent subsidiaries,
    focused on the airline and tourism sectors. The largest subsidiary is the
    international airline Icelandair. Through its hub in Iceland, Icelandair's
    international route network connects 23 major cities in Europe and the
    United States.
   
 2. 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).
   
 3. The RB211-535 powers the Boeing 757 or Tupolev Tu-204. There are more than
    1,300 engines in service which have accumulated more than 46 million hours
    of highly reliable service. Average time to first shop visit is around
    20,000 hours.
   
For further information:

Mark Alflatt

Director of Financial Communications

Rolls-Royce plc

Tel: [phone]

Fax: [phone]

Email: [e-mail]