Delta Airline's Aircraft Overhaul Supplier Replaced

Less than a year after contracting out certain aircraft overhauls to two outside suppliers as part of its recovery effort, Delta Air Lines and one of the firms are parting ways.

Delta and Avborne said they agreed to end a contract for the Miami-based firm to do major maintenance inspections on MD-88 and MD-90 jets. Delta said it will temporarily use other suppliers to do aircraft overhauls while it seeks a new contractor.

Delta and Avborne terminated the contract by "mutual agreement," said Delta spokesman Anthony Black. "Financially, the numbers didn't work at the end of the day," he said.

Avborne President Jim Martin also cited financial reasons why his company no longer wants to do business with Delta, which filed for bankruptcy in September. "We could not perform the work at commercially viable terms," he said.

Delta said operations and safety will not be affected. At any given time, two narrow-body jets were undergoing the labor-intensive, monthlong overhaul process, in which jets are stripped to their hulls and inspected and repaired.

"We will command the same level of quality on our aircraft, regardless of the vendor we use," said Black. He said Delta mechanics still go over the aircraft after overhauls by outside suppliers.

Paul Nisbet, aerospace analyst with JSA Research, indicated Delta should be able to find a replacement without much trouble. "There's no shortage of available players," he said. "I think it's quite competitive."

Delta decided last year to contract out the labor-intensive aircraft overhauls on up to 70 percent of its fleet to slash related costs by a third, saving $240 million in maintenance costs over five years.

Delta had signed five-year contracts last March with Avborne and Air Canada Technical Services of Vancouver, British Columbia. Delta said the latter company is still doing overhauls on Delta's larger fleet of Boeing 757s and 767s.

The ailing carrier announced the move as it was planning to shrink its Atlanta and Tampa hangar operations and eliminate up to 2,000 jobs in its maintenance division.

Last month, Delta said it plans to outsource more maintenance work and to cut up to 1,000 additional maintenance jobs by April 1.

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