It is clear that preventive maintenance can bring reliability and predictability to a fleet, but can it position a diligent carrier above the mean? is testing—and perhaps proving—the hypothesis.
Delta's strategy of investing in older aircraft in lieu of buying only new ones is no secret. Among the big four U.S. carriers, Delta has the second-largest mainline fleet but the smallest order backlog, at 175., with 310, is next-smallest.
Delta is swapping maintenance honeymoons for substantial investments in spares, logistics and its Tech Ops maintenance unit as a whole. The carrier has purchased aircraft not to fly, but to break up for parts, for instance.
“With a mature fleet, you have a lot of opportunity from a structural cost standpoint, because of the surplus market, to really take advantage of where those fleets are in terms of that maturity curve, and really aggressively manage and control your maintenance, material and repair costs,” says Steve Gorman, Delta's chief operating officer.
One department's savings are not worth much if they do not help meet broader organizational goals. Delta Tech Ops does not have to dig too deep into its parent company's numbers to demonstrate its worth. In 2013, Delta's 740-aircraft mainline fleet logged about 120 days—2-3 each week—without a single maintenance-related cancellation. It went the entire month of October without a single domestic cancellation. It also claims to have achieved the highest flight completion percentage (99.7%) among U.S. majors.
All of that came while flying a fleet that averages 17 years of age, at least three years older than any notable carrier not named.
But Delta's performance is about more than just reliable aircraft. The airline is aggressive about swapping spare planes for faltering ones to keep from canceling flights, for example. The strategy paid off where it counts most: Delta's 2013 net profit of $2.7 billion topped all U.S. carriers. And—good news for surplus parts providers—the carrier's leaders think there is room for improvement.
At other airlines, too, as profits increase, the bare-bones maintenance strategies of recent years are shifting to an invest-now, profit-later approach. At Pratt & Whitney, spares sales rose 20% last quarter, but the company reported a 40% jump in engine services sales, suggesting that expensive heavy engine overhauls—often put off in lean times—are picking up. A Canaccord Genuity survey of trends in maintenance, repair and overhaul (MRO) found last month that heavy airframe maintenance providers are reporting growing backlogs, partly due to demand-driven upticks in aircraft utilization.
Not all revenue-positive MRO moves are coming from increased spending on maintenance. Some carriers are still weeding out inefficiency.
Shortly after a 2012 fleet redeployment, United realized it had not adequately rearranged its spares stocks to match its new aircraft routings. Determined to both understand and fix the problem—and as part of a bigger push to cut $2 billion in annual costs by improving efficiency—United set up go/no-go bins for parts without which aircraft could not fly. It then tracked how often these bins turned up empty. Metrics from early last year set the bar low. By the end of 2013, empty-bin occurrences were down 60%. That helped drop 2013 fourth-quarter maintenance-related cancellations 14% year-over-year.
United also has learned that while deferring maintenance eases cash flow, it can create bigger bumps down the road. Not long ago, some of the airline's legacy widebodies, including its 23 graying-400s, were having reliability issues that traced back to maintenance deferrals during the carrier's mid-2000s bankruptcy. Determined to catch up, United altered its 2013 aircraft routings and based the 747s in San Francisco, where it has a full-service MRO shop. While that positioned the aircraft for much-needed preventative work, it also pulled them from higher-revenue routes, such as Chicago-Tokyo, costing the airline money.
“This year, we'll be able to place [them] in markets that better fit the demand,” says Chief Revenue Officer Jim Compton.