MROAM: Delta TechOps analysing case for insourcing Airbus engine overhauls

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Delta TechOps is analysing the case for insourcing engine overhauls on the CFM International CFM56 and Pratt & Whitney PW4000 engines that power its Airbus aircraft, said Peter Turner, vice-president MRO services on the sidelines of the MRO Americas conference in Atlanta this week.

The maintenance shop already has capabilities for engine maintenance on the CFM56-7 variant, which powers the next-generation Boeing 737. It also performs work on the PW4000 engine variant for the Boeing 767.

Delta TechOps currently has a long-term engine maintenance agreement with Pratt & Whitney for PW4000 engine MRO on the A330 fleet, Turner says. The airline also has OEM contracts with Snecma for the CFM56-5A engine powering the Airbus A320 family and GE for the GE90 engine on the Boeing 777.

Delta TechOps also announced at the show that it would bring more of its regional jet engine work in-house by adding General Electric CF34-8 capabilities to its shop by early next year.

In 2012, Delta had a cost per available seat mile (CASM) of 8.92 cents - the second-lowest of the North American major carriers that reported the statistic.

Insourcing engine maintenance is a strategy that Delta TechOps is using to keep costs down at the airline as the cost of spare engines goes up, says Turner, noting that bringing the capabilities in-house would only make sense if TechOps can do the overhauls at a lower cost than the engine manufacturer.

"A strategic insourcing decision for Delta Air Lines is a triple play," says Turner. "It reduces our CASM, it improves our overhead and gives us the opportunity to go and compete in the third-party MRO business."

Delta has generally seen spare prices double every seven years, said chief executive Richard Anderson during a speech at MRO Americas on 17 April.

The use of manufacturer approval (PMA) parts and designated engineering representative (DER) repairs are also tenants of TechOps' strategy to manage costs.