Delta Airlines DAL, the world's largest airline by revenue and market cap, makes most of its money by suffling a high number of passengers across the globe.
A growing part of the business is the Delta TechOps unit, which is an MRO Maintenance, Repair and Overhaul provider that does everything from routine maintenance to large jet-engine overhauls and even complex cabin interior upgrades.
Delta s ancillary businesses revenue line item, which includes TechOps, hit $846 million in Delta's 2022 annual results released last month, with the vast majority of that revenue coming from TechOps.
Delta is expecting more growth in its operations in 2023, and doubling down on its TechOps business, opening a new jet engine repair facility in Atlanta with partner Pratt Whitney, while that is slightly lower than pre-pandemic levels.
Delta s new fleet of Airbus A 321 neo and A 220 planes will be powered by the facility, which will be dedicated to maintenance on Pratt Whitney GTF engines.
It's a great day at Delta TechOps as we open this new engine shop, said John Laughter, Delta s chief of operations, in an interview with Yahoo Finance. This is the continuation of our TechOps team's advancement into the next generation engine platforms, and it matches well with our fleet. The new engine shop will not only service GTF engines belonging to Delta aircraft, but also customer engines that Delta maintains through its TechOps MRO business. It is another way that Delta can pad its bottom line, with revenues coming directly from its competitors to boot.
This is another revenue stream for Delta, Laughter says, and TechOps is an investment that Delta has been investing in for more than 20 years, growing our third party capability. While he didn't say anything about margins, he did note that MRO business is particularly good because it involves high-tech repairs that are worked on by specialized technicians. Services work at this level requires time and investment. Delta charges hefty fees for work done.
The new facility will handle more than 10% of Delta TechOps GTF engine overhauls in the first year, and will expand to 400 GTF engine overhauls annually when it gets to full capacity, according to Laughter.
That is just the beginning. Soon TechOps will not only be able to service Pratt Whitney's GTF engines, but also Rolls-Royce RR.L Trent and CFM LEAP GE jet engines, leaving Delta s TechOps in an enviable position.
Delta is the only shop in North America that can handle all three of those platforms, and this is a new, efficient, quiet, fuel savings next step in sustainability engines, Laughter said.