Boeing And Delta

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Reuters UPDATE - Boeing, Delta in airframe spare parts pact
Friday June 25, 2:25 pm ET

(Adds details, company quotes, previous NEW YORK)
SEATTLE, June 25 (Reuters) - Boeing Co. (NYSE:BA - News), the No. 2 jetliner maker, on Friday said it had reached a deal with Delta Air Lines Inc. (NYSE:DAL - News) to manage much of the No. 3 U.S. carrier's spare parts system.

Boeing will handle purchasing, inventory management and logistics for Delta's expendable aircraft parts -- nuts, bolts, hoses, clamps and other small components -- beginning with proprietary Boeing parts and possibly expanding later.

A company press release did not disclose financial terms.

The deal will run for five and a half years and cover more than 500 Boeing-built aircraft in Delta's fleet, Boeing told Reuters by telephone.

"Given the size of Delta's fleet and the nature of what they are doing to try to reduce costs, we believe this agreement will expand fairly rapidly," Joe Brummitt, director of Integrated Materials Management at Boeing.

The program will save Delta 10 to 20 percent on materials operating costs, with Boeing representatives working at the airline's Atlanta hub, Brummitt said.

Boeing and other suppliers will own the aircraft parts, which Delta will pay for as it needs them.

Chicago-based Boeing, which runs its commercial jet business from Seattle, has similar parts management deals with Japan Airlines System Corp. (Tokyo:9205.T - News) and KLM, the Dutch unit of Air France-KLM (Paris:AIRF.PA - News).
 
No stock clerk layoffs. The biggest change is just the ownership of the parts. The store room is still on the property and we will still staff it. Boeing will own the part until we us it. We have had a similar deal with Pratt and GE for a while.
 

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