International Airlines Group (IAG) is making good progress with optimizing its internal MRO operations, although CEO Willie Walsh says there is still more to be done.
Speaking at the release of IAG’s interim results, Walsh said IAG has been on an efficiency drive to ensure that the group’s internal MRO units are offering market-competitive prices.
Iberia, in particular, has been maximizing use of its own facilities before outsourcing to third-party suppliers. Walsh says Iberia has “certainly demonstrated” that it can compete on a market-price basis globally. “Their engine shop is continuing to perform very well,” he adds.
IAG will continue to further invest in its most efficient internal facilities. Where it lacks sufficient capacity, the work will be outsourced, but only after a competitive tender to secure the best price and help set internal benchmarks.
“We’re very clear that our maintenance costs are in line with best practice in the industry. There is more improvement coming, through increasing internally within British Airways, where we do a lot of the heavy maintenance—airframe maintenance—in our own facilities in Glasgow. We’re continuing to look at opportunities to improve that. I am pleased with the progress we are making. There is more to come, but it’s working well so far,” Walsh says.
For the six-month financial period ending in June, IAG’s engineering and other aircraft costs were down 11.3% at €822 million ($950 million), although IAG says this improvement was driven by the timing of third-party maintenance activity at Iberia and engine compensation credits from a manufacturer.