Air France-KLM Group, said it’s seeking to wrap up the purchase of #25 Airbus SAS A350 planes in the first half of 2013 as it pushes back a contract amid arguments over engine maintenance.
The airline had announced plans for the purchase of the wide-body aircraft in September/2011, together with the same number of 787. While the Boeing deal has been signed, Airbus is still waiting as Air France negotiates with engine supplier Rolls-Royce over maintenance.
“It’s reasonable to think that the talks on A350s will be concluded in the first half of 2013,” Alexandre de Juniac, Air France CEO said today at a briefing.
The French carrier is seeking to win work and preserve jobs at its Air France Industries division, one of a shrinking number of in-house aircraft servicing shops.
"The issue is service and maintenance. We have a solid engine maintenance operation and Rolls has a policy of doing the maintenance itself," said Alexandre de Juniac.
Air France-KLM, which is making heavy losses from its airline business, has its own maintenance and support division that is the only profitable part of the company. Air France wants “to be a player in the market of maintenance for these aircraft and their engines” as demonstrated in the recent inauguration of the 5.000 sq.m. new engine test cell facility at CDG-Paris Airport with an investment of €43 million.
“The test cell will enable Air France Engineering & Maintenance to cover the entire maintenance process for engines, such as the GE90-94/115 equipping Boeing 777s, the CFM56 power plants equipping A320/A340, the GP7200 engines equipping the A380, and has been designed to adapt to the engines that will equip future generations of aircraft”. For example, the 787 and A350 XWB.
Air France CEO in the new CDG engine test facility inaguration
Rolls-Royce, the unique engine supplier for the A350 XWB, has been reluctant to grant third-party repair rights because maintenance contracts are more profitable than building the actual engines.
''Engine suppliers are loath to grant MRO rights to others. Engines are often sold at deep discounts, and in extreme cases, even given to airlines in exchange for the exclusive parts and MRO contracts. This is where the engine makers truly make their profits.''
It's worth remembering that Air France has yet to announce their engine choice for the 787 order and it could be the Rolls Royce choice to get an agreement with Europe’s biggest airline.
Based on the article “Air France Delays Airbus A350 Contract Amid Engine Upkeep Spat” published in Bloomberg and on the article “Air France invests €43 million in new CDG engine test cell facility” published in ATW