Delta Air Lines (NYSE:DAL) has been selected to provide shop visit maintenance for Atlantic Southeast Airlines’ and Comair’s Bombardier CRJ regional jet CF34 engines—maintenance services valued at $1 billion over a 10-year period. This program, with the two Delta Connection carriers, represents significant cost savings for them and establishes Delta as a leading contender for other CF34 engine maintenance programs.
“The success of our insourcing business is due entirely to the quality and flexibility of our technicians and engineers,” said Ray Valeika, Delta’s senior vice president - Technical Operations. “At a time of incredible revenue pressures and decreasing market, Delta’s TechOps has lowered costs and grown the business, which in turn helps keep jobs.”
Delta plans to begin the maintenance services by 2004. This is the first regional jet engine work for Delta’s TechOps, which also will have the ability to provide support for regional jet auxiliary power unit, landing gear and component repairs.
“Key elements of TechOps’ proposal included numerous beneficial factors, most notably their flexible and productive workforce, which allows them to offer service and timeline guarantees that are so important to our business,” said Randy Rademacher, president of Cincinnati-based Comair. “They were also able to provide us with the most competitive overhaul rates in the industry, enabling us to enhance quality and cost effectiveness.”
TechOps insourcing is one of Delta’s main contributors to non-transportation revenue. The company has seen an average 74 percent annual increase in TechOps insourcing revenue in the last two years. This program opens a new market for Delta to continue its insourcing revenue growth.
“Multiple suppliers competed for this work, including other worldwide major airlines and engine repair/overhaul companies,” said Skip Barnette, president of ASA, based in Atlanta. “TechOps is known across the globe for its productivity, quality and service excellence. These virtues, coupled with TechOps’ cost effectiveness, were driving factors in ASA’s decision to select TechOps for this important engine program.”
The CF34 powers the Bombardier CRJ regional jet, the fastest growing fleet type in the world. ASA and Comair combined account for nearly 30 percent of the market segment, with a total of 185 CRJs in operation today.
In conjunction with the engine maintenance program, Delta will provide a hangar maintenance bay for ASA at Hartsfield Atlanta International Airport - ASA’s first sheltered maintenance site in Atlanta. The facility will enhance ASA’s Atlanta line-maintenance operation by moving select maintenance functions from airport gates to the hangar facility, thereby reducing gate congestion. The hangar facility also will improve ASA aircraft utilization by reducing the number of positioning flights required between Atlanta and the airline’s primary maintenance base in Macon, Ga.
The Delta Connection program includes wholly owned Delta Air Lines subsidiaries ASA and Comair, additional regional carriers Atlantic Coast Airlines, Chautauqua Air Lines (a Republic Airways Company), and SkyWest Airlines, and codeshare partner American Eagle in California. Delta Connection carriers operate more than 250 regional jets throughout North America.
Delta Air Lines, the world’s second largest carrier in terms of passengers carried and the leading U.S. airline across the Atlantic, offers 5,898 flights each day to 429 destinations in 76 countries on Delta, Delta Express, Delta Shuttle, Delta Connection and Delta’s worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. For more information, please go to delta.com.