Prevention by aircraft maintenance is proving better than cure
Delta’s Preventative Maintenance strategy is also proving profitable
Delta Airline’s preference for buying older aircraft is no secret, but whilst preventative maintenance can promise reliable and predictable fleet operation, can it provide profit?
Delta has the second biggest mainline fleet in the United States, but it has the smallest order backlog at 175. Flying a fleet that has the averages 17 years old, the airline has stopped postponing costly maintenance checks and invested in spares, its tech ops unit and logistics.
Delta is buying planes and using them for parts!
By taking advantage of the surplus market, and strictly managing the costs of your materials and costs, Delta’s Chief Operating Officer Steve Gorman says there are opportunities to be had.
It may sound very idealistic but Delta’s savings are not worth much if they do not help meet broader organisational goals. However it doesn’t take a lot of investigation to stumble across the company’s credentials. In 2013, Delta’s 740-aircraft mainline fleet logged about 120 days without a single maintenance related cancellation. October 2013 flew by without a single domestic cancellation. Delta also claims a 99.7% flight completion percentage in the same year, the highest amongst all U.S majors.
Delta’s fact and figures tell a tale that goes beyond reliablilty. They swap spare planes for faltering ones to prevent cancellations; they have spare parts on location to prevent delays. It is a strategy, a state of mind.
The reward for being one step ahead of the game was a net profit of $2.7 billion in 2013, topping all competing U.S carriers… and they think they can do better.
Preventative maintenance strategies are on the increase within other airlines too. The recent spending drought is slowly being replaced with smart and conscious investment. Pratt & Whitney reported a positive 20% rise in the sale of spares in the last quarter, and a huge 40% increase in engine services sales. This would imply that expensive engine overhauls are back on the menu, replacing the frugal ‘needs must’ approach of recent years. Heavy airframe maintenance providers are also reporting growing backlogs, partly due to demand-driven upticks in aircraft utilization.
Not all profitable MRO moves are down to increased spending. Some carriers have turned there attentions to ironing out the organizational kinks and improving efficiency.
United re-house Boeing 747-400’s to improve maintenance efficiency.
In 2012, United Airlines faced the challenge of cutting $2 billion in annual costs by improving efficiency. In an attempt to understand and fix the problem they set up go/no go bins for vital spares. The parts planes can’t fly without! They then tracked how often these bins were empty. By the end of 2013, empty-bin occurrences were down 60%, and maintenance related cancellations were also down by 14%. United learned that while deferring maintenance eases cash flow, it can create bigger bumps down the road.
To improve efficiency further, United has based its ageing fleet of Boeing 747-400’s in San Francisco. Here it has a full service MRO workshop, ideally positioning the ‘golden oldie’ widebodies for regular and much needed preventative work. Whilst route alterations may have lost the airline revenue, Chief Revenue Officer Jim Compton says that long term this easily corrected.