Air Transport World

Howdy, pardner! (relationship between airlines and vendors is changing as more managing partnerships are being developing; includes related articles)

USAir doesn't overhaul its 737-300 and dash 400 engines anymore. It doesn't want to and doesn't have to. Not since it signed an agreement with Ryder Airline Services last year under which Ryder is responsible for the repair and overhaul of the more than 200 CFM56-3 engines in the USAir fleet. In winning the USAir contract, Ryder has taken on an immense responsibility and made a major commitment to the carrier. But in return, it has achieved something virtually unheard of in previous years among third-party shops: An exclusive 5-year contract to overhaul a major airline's engines.

The contract reflects a transformation of the airline-vendor/supplier relationship that is every bit as profound as the one reshaping the airline industry. In fact, participants in this transformation even use familiar terms such as "shakeout," "consolidation" sod "partnership" to describe what is occurring.

Vendors that want to survive will have to make major changes in the way they do business. They will have to get to know their airline partners better and likely as not, they will have to accept expenses traditionally borne by airlines.

Not everyone has the resources and many are not willing to make this sort of commitment. But for the survivors, the payoff is big: Long-term symbiotic relationship with their airline customers, the security of multiyear contracts and the ability to plan well into the future. Losers, on the other hand, will be reduced to serving niches or be driven from the market entirely.

"The contract with USAir really is an example of a partnership," says Marshall Taylor, president of Ryder Airline Services. "They have put a lot of trust in to keep their equipment in the air. And we work very closely with them, from a technical standpoint, from an engineering standpoint and from a spares-management standpoint," he adds.

Ed Battaglia, senior director-airline marketing for Nordam, says: "In the past, we operated in kind of a vacuum. Airlines would send us a part and they had plenty of spares. If your time was 45 days, they got it back in 45 days. Today, they rely on the supplier to help support them, to be part of their inventory, to be part of them. …

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