Snecma Services and Northwest Airlines have just signed a contract covering MRO services for more than 300 CFM56 engines. In addition to bolstering Snecma Services’ position in the American market, this contract also reflects the company’s successful drive to hold down customers’ costs.

Snecma Services has just signed a huge contract with Northwest Airlines, worth some $2 billion. It’s an “engine support per hour”(1) (ESPH) contract covering the CFM56-5A engines on the airline’s entire narrow-body fleet: 150 Airbus A319 and A320 twinjets, or 300 jet engines, plus another 20 spares.

“We signed a ten-year ‘per-hour’ contract for the A320 back in 1997,” explains Pierre Emmanuel Gires, head of customer operations at Snecma Services. “When the A319 entered service, we signed a second contract, this one a ‘Time & Material’ type. In 2003 we began talks on unifying these two contracts, along with an extension to 2020 – and the result is the contract we’re announcing today.”

Negotiations took place against the backdrop of strong competition, not only from other engine-makers, but also from MRO (maintenance, repair, overhaul) shops at airlines belonging to the SkyTeam alliance. KLM, which already had commercial accords with Northwest, was also in the race.

The contract won by Snecma Services not only gives it a considerable business volume, but also consolidates its position in the American market, and with one of the carriers posting the best recent results. In addition, it caps an impressive series of contracts signed in the last two years, and rewards Snecma Services’ proactive strategy of reducing maintenance costs for airlines.

“The customer is of course the prime beneficiary of this strategy, which has three main facets,” emphasizes Gires. “First, as much as possible we try to avoid removing the engine, by developing our EMOS (2) services, along with support and training. If the engine does have to be removed, we seek to minimize the service level required in any way we can. And if heavy maintenance is required, we try to use guaranteed used parts, rather than new parts. We also pay attention to planning ahead for the use of limited-life parts.”

This type of approach is now being applied outside the commercial aviation arena. Government customers are increasingly choosing this type of contract, which guarantees equipment availability. At the last Paris Air Show in 2003, for instance, Snecma Services signed an historic contract for the support of CFM56 engines powering the British Royal Air Force’s AWACS planes. Since then, the French air force and several other clients have also chosen this type of contract, further bolstering Snecma Services’ reputation.

(1) In this type of contract, the customer pays a fixed rate per hour of flight, in exchange for guaranteed engine availability.
(2) EMOS: engine maintenance on site, or “on-wing” maintenance, without having to send the engine back to the shop.