Delta TechOps is looking at adding Airbus component services to its fast growing third-party business, using the expertise from newly acquired Northwest Airlines.
The VP of sales and marketing for the Atlanta-based maintenance provider, Jack Turnbill, says Delta TechOps is now studying internally how it can bring to the third-party market some of the Airbus services Northwest's maintenance operation currently provides in-house or is capable of providing.
"We're exploring very aggressively how we can bring that under the Delta TechOps umbrella and use that expertise for some customers," Turnbill says. "It will happen this year."
He adds several existing Delta TechOps customers who operate both Airbus and Boeing aircraft have already expressed interest in awarding Delta TechOps work on the Airbus side. He says there are several options for offering component as well as potentially some airframe and engine work for Airbus models.
Northwest currently outsources most Airbus maintenance work but Turnbill says it has the capability to do more because it has all the required manuals, shop equipment and testing facilities. Delta TechOps could potentially use this expertise to offer third-party customers Airbus components services at the Northwest facilities in Detroit and Minneapolis it has inherited as part of the acquisition.
Turnbill says it could also move this expertise and equipment to Delta TechOp's main facility in Atlanta, where it already offers component services on Boeing models. Under this scenario, Delta TechOps would invest in additional resources and staffing in Atlanta to support the expansion into Airbus component work.
He adds Airbus component services will move to Atlanta "where it makes sense". A decision on where to locate various Airbus components will be made later this year along with other maintenance decisions related to the merger.
Delta TechOps never built up Airbus capabilities because Delta did not have any Airbus aircraft in its pre-merger fleet. Northwest currently operates both Airbus A320 family narrowbodies and A330 widebodies. The two carriers merged late last year and are now in the process of combining their operations with the goal of operating under a single operating certificate by mid 2010.
On the maintenance side, Turnbill says Delta will look at how to handle maintenance on ex-Northwest aircraft, engines and components as the carrier's pre-merger outsourcing contracts come up for renewal. He says most of these contracts are long-term and over time Delta TechOps will look at where it makes sense to bring some of the work in-house.
"We'll certainly honour those contracts and take a look at our options going forward," Turnbill says.
He says some of Northwest's contracts may be expanded where it makes sense to leverage existing relationships and add work from the Delta side. On the other hand for products Northwest now outsources but Delta does in-house, such as CFM International CFM56 engines, Delta will look to see if the work can be done more cost effectively at Delta TechOps.
Northwest has 900 unionized aircraft and powerplant (A&P) personnel, which are now being brought into the Delta TechOps organization. It has several maintenance facilities but most are limited to light or line maintenance.
Delta, which has about 5,200 A&P personnel, has had a far bigger maintenance operation since Northwest reduced its mechanics ranks by roughly 5,000 during a 444-day strike in 2005-2006 by its chapter of the Aircraft Mechanics Fraternal Association (AMFA).
Turnbill says Delta TechOps is "excited" by the acquisition of Northwest since it adds Airbus capabilities to its portfolio and could help the company achieve its goal of further growing its thirty-party business. In 2008 Delta TechOps generated about $500 million in revenues from third-party customers.
Turnbill says Delta TechOps' 2009 target for third-party revenue is "a little bit higher" than $500 million. He adds Delta TechOps does not expect to match the double-digit third-party growth it has chalked up over the last few years but given the current economic climate having even small growth should be considered "a good year".
Source: Air Transport Intelligence news
