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Bastian Expresses Confidence In FAA-Industry Collaboration

Delta CEO spoke at Aviation Week Network's MRO Americas event in Atlanta on Tuesday (April 9).

ATLANTA—Close collaboration between industry and regulators has been critical to achieving commercial aviation's unprecedented safety levels, Delta CEO Ed Bastian says, expressing confidence in the process in the wake of the Boeing 737 Max crisis.

"You think about what has given rise to our industry being the safest means of transportation to the world, and the U.S. being the leader," Bastian told reporters following his keynote address at Aviation Week's MRO Americas. "One of the ways we do it is we report all data in our operation to our regulator with complete transparency. It's a complete, seamless transfer."

Data collected during routine audits and shared with certificate holders strengthens this, he added.

"As the regulators are evaluating and auditing, they let us know" what they find. "It really is a partnership. Through that partnership, we've been able to learn how to be safer and where to invest to improve that safety. We all have the same goals—to drive the safest operation ever imagined in this industry. The only was you can do these things is through partnerships."

While all airlines collaborate with regulators on some level, Delta has more insight than most operators. Not only is it one of the largest carriers in the world, but its Delta Tech Ops operation is one of the largest MRO providers in the U.S. Delta also is one of the few airlines that are in FAA's Organization Designation Authorization (ODA) program. The program, which has about 80 participants, including different divisions of manufacturers, suppliers, and airlines, is under scrutiny as part of broader examinations into how FAA managed the 737 Max certification process.

Bastian declined to address the Max situation specifically, but said that he expects the situation to yield valuable lessons in several areas. "While we're all troubled by what's happened with the Max, we'll learn from it," he said, adding that he is "confident Boeing will solve this issue."

The 380-aircraft Max fleet has been grounded since mid-March following two fatal accidents in five months, including the March 10 crash of Ethiopian Airlines Flight 302. Boeing is testing software changes that target the aircraft's maneuvering characteristics augmentation system that played a role in both accidents. The company also announced that 737 production will be cut to 42 aircraft from 52 in the coming weeks. It stopped delivering new Maxs when the global Max operations bans were ordered in the days after the Ethiopian crash.

Boeing's focus on the Max crisis has sapped some attention from its new midmarket aircraft (NMA), Bastian confirmed, leading to a slowdown in dialogue with potential customers, including Delta. "It's understandable that they've been distracted," Bastian said. "I expect them to be able to re-engage in some conversations in the not-too-distant future."

Bastian said an appropriately-designed product remains high on Delta's wish list.

"We're very interested in the NMA and we've talked to Boeing at some length," he said. "We've given Boeing our expectations. I think it's along the same path or trajectory that you've seen on the 787." Delta sees the NMA as an ideal replacement for some 200 757s and 767s it is retiring in the coming years. Bastian declined to specify any efficiency-gain metrics that Delta is seeking in an NMA, "But you can rest assured we are spending time in Seattle talking about that."

Meanwhile, Bastian said Delta's new Airbus A220s are being integrated into the fleet, albeit with some entry-into-service hiccups. "We're just a couple of points off our standard level of efficiency," Bastian said. "We're working with both Pratt and Whitney and Airbus on what we need and what their improvements will be."

Bastian declined to provide specifics, saying the issues are nothing out of the ordinary for a new fleet. He said process improvements will help the fleet become more efficient. One example: the aircraft takes longer to fuel than other Delta narrowbodies. "It's just a small area, but an opportunity for us to enhance the effectiveness of the product," he said.

Delta has a total of 90 A220s on order: 50 -300s and 40 -200s. It has taken delivery of eight A220s—all -100s.

"It's hard to gauge on such a small sample size," he said. The fleet's performance "is not yet at the level Delta expects, but I'm confident we'll get there."

Bastian lauded Delta's internal maintenance capabilities as one of the primary drivers behind an eye-opening reliability-improvement trend. Delta's maintenance-related cancellations totaled about 60 in 2018—a 99% reduction from a decade earlier.

Tech Ops continues to grow its third-party revenues as well. After generating about $700 million in revenue last year, it is on pace to top $1 billion in 2019 or 2020, and will see revenue double in five years. The primary growth driver: a ramp-up Pratt & Whitney PW1000G and Rolls Royce Trent 1000 overhauls. Delta partners with both engine manufacturers as a member of their repair networks and recently opened dedicated shops for the new products.

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