Delta Air Lines Inc. will start a partnership project to generate $1 billion (680 million EUR) in revenue over 10 years for its maintenance, repair and overhaul unit and the parts manufacturer Chromalloy Gas Turbine Corp.
The third-largest U.S. carrier said Wednesday the deal with Chromalloy will be a boon for Delta's TechOps division.
Chromalloy will manufacture lower cost alternative parts that Delta can use to repair and overhaul engines, Delta spokeswoman Betsy Talton said. Currently, when Delta repairs an engine it typically gets parts for the repair from the original equipment manufacturer, though it has used non-original manufacturer parts in the past, Talton said.
The partnership is expected to generate $1 billion in revenue that the two companies will share, Talton said.
Delta said the deal will add the CFM56-5 engine type to the list of engines that TechOps services. Delta said that engine type is the engine of choice in Airbus aircraft.
The deal also includes the parts development program and 250 engine overhauls to be performed by Delta TechOps employees over the term of the agreement.
Delta said its maintenance, repair and overhaul unit took in more than $310 million (210.5 million EUR) in revenue last year. In addition to providing maintenance and engineering support for Delta's fleet, TechOps serves more than 100 aviation and airline customers from around the world.
Chromalloy is New York-based Sequa Corp.'s largest business unit.
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