New Supplier Will Produce Non-OEM Parts For Carrier

He's not saying if, and he's not saying when... but Ed Bastian, chief financial officer for Delta Air Lines, says the possibility the nation's third-largest airline might grow bigger by buying another carrier remains a "front-burner" issue.

"I think there's value there," Bastian said this week of a possible consolidation. "We just need to find the right transaction for the constituency. If we do find it, we'll certainly consider it."

Bastian made his comments Wednesday during a webcast investors conference, reports The Associated Press. He did not delve into specifics, though he did say a variety of factors are being considered by the airline, including the impact on employee morale, and the carrier's bottom line.

In a definite hint a decision on any merger could occur sooner rather than later, though, Bastian also said Delta would resolve the question of consolidation before determining whether or not to sell or spin off any of its supporting businesses.

"We'll be smart, we'll be knowledgeable about what the opportunities are, but I think we want to answer the consolidation issue first," Bastian said.

In related news, also on Wednesday Delta announced it formed a partnership with partsmaker Chromalloy Gas Turbine Corp. The 10-year deal, expected to generate $1 billion in new revenue, is expected to bolster Delta's maintenance, repair and overhaul (MRO) operations.

Delta spokeswoman Betsy Talton said Chromalloy will produce cheaper, non-OEM engine parts for Delta. Perhaps tellingly, the Chromalloy deal also adds a new engine type to Delta's TechOps services -- the CFM56-5, used on many Airbus planes.

Delta currently operates Boeing and McDonnell-Douglas branded aircraft, but its MRO also operation handles works for over 100 aviation and airline customers. TechOps revenue exceeded $310 million last year, according to the Atlanta-based carrier.

FMI: www.delta.com, www.chromalloysatx.com/