MROAM: Rising spares costs biggest problem for airlines, Delta's Anderson says

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The cost of rising spare parts each year is a problem for airlines, and means that Delta Air Lines will continue to look for alternatives to original equipment manufacturer (OEM) material, says Richard Anderson, chief executive of the airline.

Typically Delta has seen increases in spares prices double every seven years, he says, speaking from the MRO Americas conference in Atlanta on 17 April.

"For an airline, one of the biggest problems is the 8% OEM cost increase, at least, that you get every year," says Anderson. "It's the number one problem that airlines face."

To mitigate some of these costs, Delta is focused on keeping its amount of spare parts low through low turnaround times in its engine shop, and continuing to look at alternative means of procuring material.

Anderson says he believes that Delta TechOps can help airlines bring down their costs by requiring them to have fewer spare components under its maintenance programme than what OEMs are offering. Delta's goal is to keep 5% of the engines it needs to power its more than 700 aircraft as spares, including those going through the shop.

Independent MROs have to focus on alternatives to introduce pricing pressure back into the marketplace, he says.

"I think the issue that we're always grappling with us is trying to break the hold that the OEMs have on spare parts and really trying to develop PMA [parts manufacturer approval] and other opportunities," he says.

Delta TechOps generates more than $600 million per year in revenue, with about 20% of its business coming from outside of the Delta fleet.