ISSUE ONE 2011

MRO GLOBAL

w w w. a v i a t i o n n e w s - o n l i n e . c o m
www.teamsai.com
TeamSAI provides consulting and technical ser vices to aviation industr y clients including
airlines, MRO’s, corporate /fractional operators, OEM’s, airpor t authorities, and investment
banks around the world with a focus on strategy, operations improvement, cost reduction,
safety, cer tification, and supply chain.
CONTENTS
4 THE MRO MARKET IN 2011
A review of the past 12 months in the MRO market and a look at what’s ahead for 2012

16 Who combines the data?

Amalgamating two or more data systems is a costly and time consuming affair Swiss Aviation Software has the solution

22 More MRO for your money

MRO Global looks into the maintenance providers market.

32 Smoke and mirrors

The PMA parts market has enormous potential for growth if it can fight back against the OEMs.
MRO GLOBAL 2011
44 Solving lessor issues EDITORIAL TEAM
Ideas about how to handle third-party maintenance contracts Victoria Tozer-Pennington
[email protected]
47 More than an afterthought Philip Tozer-Pennington
Inventory management planning from Inform
[email protected]

50 Pulled apart Kaleyesus Bekele

[email protected]
Kellstrom shares how it intends to retain its share of the fragmenting parts market.
SUBSCRIPTIONS

54 MRO Americas Annual subscription: £250 / €250 / $300

Subscription enquiries to:
[email protected]
62 MRO Americas Directory
ADVERTISING SALES

66 A320-family maintenance John Pennington

[email protected]
MRO Global surveys the best maintenance providers for A320-family aircraft
Philip Tozer

78 MRO Europe [email protected]

PRODUCTION AND ONLINE

90 MRO Europe Directory Dino D’Amore

[email protected]

94 High-tech, low maintenance Kathy Alys, subeditor

Boeing designed the 737NG with a reduced scheduled maintenance in mind DIGITAL ISSUE
Digital version production by
98 MRO Middle East Symbian Print Intelligence

PUBLISHER
105 MRO Africa Aviation News Ltd
Suite 16745, Lower Ground Floor, 145-157 St

108 MRO Middle East/Africa Directory John Street, London, EC1V 4PW
Registered in England & Wales

110 A340 maintenance Company number: 7351543

MRO Global examines the history of the A340 Copyright 2011 Aviation News Ltd
Airline economics (Print) ISSN 2045-7154

117 MRO Asia-Pacific Airline economics (Online) ISSN 2045-7162

Printed in England through Ben Chater Printing

121 MRO Asia-Pacific Directory All rights reserved. No part of this publication may be
reproduced by any means whatsoever without express
permission of the Publisher. Although great care has
been taken in the compilation of Airline Economics,
Aviation News Ltd does not take any responsibility for
the views expressed herein.

2 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 Engine Leasing
Asset Management
All Manufacturer Types
Long, Medium & Short Term
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KEEPING YOU IN THE AIR

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www.elfc.com
MRO GUIDE

MAINTENANCE REPAIR
AND OVERHAUL
M
aintenance repair and Some 30% to 50% of MRO work is in the day to day running of an airline so
overhaul (MRO) is big estimated to be completed by third par- they know what is going on at any given
business, worth some ties. While some airlines are getting out of time and recommend solutions.
$46.9 billion and rep- MRO, others believe they can find econo- MROs also need to reduce costs: This
resents 12-15% of an mies of scale by bulking up the amount of can be done by suppliers working together
airline’s cost base. work they do and keeping MRO in house. to purchase parts, but more cooperation is
Although many airlines carry out their Airlines with their own in house MRO needed than is currently taking place, at
own line maintenance, 60% of the world’s argue that it is an integral part of their least in the European market. Some major
carriers outsource heavy work in an effort overall business plan and that a third party MROs are cooperating on staffing at vari-
to lower costs, for the 40% who keep line provider would not be able to understand ous locations so that they in effect establish
maintenance in-house huge investments the complete operational environment. a joint partnership. Some major firms
in infrastructure, facilities and parts are For third party MROs to expand, in have cut jobs at certain bases because they
required it is no wonder then that many many cases they must adapt to be more are using employees from a competitor to
airlines have been unable to make it work than just a maintenance and parts supply keep contracts running. In some cases an
on a cost effective basis. partner. They must become more involved engineer will be servicing a number of air-

4 4 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MRO GUIDE

o3UHYLRXVO\DQ052ZDV either cease to fly or take a one-way trip to Source: TeamSAI Consulting

Hong Kong or Mumbai, over capacity on
MXGJHGRQWKHVHUYLFHLW major routes is at this time a real and pres- $69.0

SURYLGHGDQGLWVFOLHQWRUGHU ent danger. It can also therefore be assumed

that re-fit orders for aircraft to have re- $12.4
ERRNJRLQJIRUZDUGWKH\DUH vamped or extended premium seating, as
$56.4

QRZDOVREHLQJMXGJHGRQWKH seen in 2010, is now a thing of the past at $46.9 $9.9 CAGR
least for the next fifteen months and maybe
VWUHQJWKRIWKHLUILQDQFHVDQG 4.1%

more depending on the possibility and $8.7

CAGR $32.6
ILQDQFLDOEDFNLQJp nature of any sovereign defaults within the 3.8%
$27.1
Eurozone during the same period. Previ-
craft in a day under contracts with two or ously an MRO was judged on the service $21.6

more separate MRO providers. The shar- it provided and its client/orderbook, going
ing of staff has resulted in a large number forward they are now also being judged on $12.5
$10.1
of engineers flooding the jobs market but the strength of their finances and financial $8.6

it has subsequently drastically cut the cost backing. Any company at this point wishing $11.5
$8.0 $9.3
base of many MRO firms and relieved some to refinance will have to look to investment
pricing pressures for MROs. During 2011 which may also lead to MRO market con- 2011 2016 2021
airlines increased capacity once again and solidation, something that would indeed be
HMV&Mod Engines Compenent Line
MROs have forecast a much improved pic- welcome at this time.
ture for this year, however the latter months
of 2011 are seeing dramatic cuts to sched- What to watch out for in 2012 */2%$/052)25(&$67
ules across the globe as airlines react to yet The acquisition of TIMCO by SR Technics 727$/9$/8(%
another sharp slowdown and plot a course was, and maybe still is, on the cards. This
for winter 2011/2012 that forecasts passen- would be a good move for SRT but every- MRO in 2011
ger numbers below that of 2009. Another one is a little bit afraid of what is happening
problem for the sector has always been over in Zurich at the moment. Nobody really Fleet 2010 19,675
regulation. Audits are hurting the industry understands what direction the Mubadala
and, with the FAA trying its best to intro- group wishes to go. Heavy maintenance + Deliveries + 1,076
duce new draconian measures, it can only out of Switzerland with a cost base in Swiss
get worse before it gets better. However it francs (CHF) has been crippling for the - Retirements - 396
should be noted that the efforts of the Air MRO. Only timely and decisive Swiss gov-
Transport Association to highlight and deal ernment intervention saved the day, but the - Stored - 152
with the problems may yet bear fruit. pressure is still on. It would be a challenge
for Mubadala to look for new business Fleet 2011 20,203
The MRO sector is reactionary, fitting opportunities in the near future with SR Source: TeamSAI Consulting
services with client needs or perceived Technics under pressure. That said oppor-
needs. The problem is how do you per- tunities are bound to present themselves.
ceive the needs of a client, or potential SR Technics is not alone but simply an
QUICK VIEW FACTS:
client when the client has no clue what- example, even the mighty Lufthansa Tech- MRO in 2011
soever as to what tomorrow may bring? nic is feeling the pressure of late. Everyone
At the close of 2011 and into early 2012, the is very cautious. The smaller MROs have Global MRO spend will be up 10.8% in 2011, to
only thing that is certain is that liquidity, their market niche and they have a stable $46.9B. The drivers of the year-over-year change
especially within the European sphere, is customer base, but for the big MROs the are important to understand.
drying up, banks are laying off staff, busi- current market and 2012 outlook is a chal-
ness are having problems raising capital lenge at best. ‡ Fleet change alone drives a 3.2% increase,
and politicians seem willing to continue The MRO industry outlook currently due to fleet renewal
kicking the can down what is left of the road shows that in 2011, global MRO spend ‡ Utilization increase drives market up a small
to fiscal collapse. Although unemployment will be up 10.8% over 2010, to $46.9 bil- amount (utilization up 1.5% for the year driv-
within most geographical zones is holding lion. Global growth is expected to maintain ing 0.4% for market)
flat or even reducing, this silver lining does a 3.9% CAGR through 2021 seeing the ‡ Component increases outpace declines to
not mean that business travel is secure – it is current $46.9billion industry grow to airframe and line for a small net increase of
not. Unemployment within the all-impor- one worth some $69 billion, within these 1.0%
tant financial services sector is increasing figures the engine repair market is the seg- ‡ Engine MRO drives a significant 6.4%
rapidly throughout just about every region ment with the highest growth rate, in part increase
other than South East Asia and Australasia, this is due to new aircraft requiring less ‡ And last, labor rates have eased down ever
although even the latter has signs of weak- maintenance as per design specifications. so slightly.
ness. So as financial services executives It remains to be seen if this will be the case. Source: TeamSAI Consulting

www.airlineeconomics.co Airline Economics: MRO Global 201155

MRO GUIDE

The global business cycle has a strong MRO costs per aircraft continue to fall at the plans around the world to lower
influence on MRO activity as it does with rapidly. It is a worrying time indeed for fleet ages, lower retirement ages and
most areas of aviation and the last few the MROs. of course they have taken note of the
months of this year could change the 2011 So is the MRO sector ripe for in- amount of new aircraft on order and
outlook sharply. 2010 marked a notable vestment or is it a bit of a minefield? the lower maintenance requirements of
leveling of capacity. ASMs declined 1% Overcapacity and OEMs are marching the same and they are worried for MRO
in 2010 (mostly long-haul traffic). But into the aftermarket very heavily and and aftermarket suppliers. At the same
the 1% decline in capacity has taken a there is the ongoing war between the time many have clamoured to invest
dramatic toll on the associated MRO PMA, DER and OEM strategies. SR in new aircraft through funds such
business with 2010’s MRO market down Technics managed to pull in some very as Doric Air Nimrod 1 and 2. Aircraft
7.5%. With airlines now able to adjust heavy weight investors to help them in maintenance will always be required;
very quickly to global events and econom- the form of Mubadala Development the question is whether there will be
ic changes, it is time that MROs acted in Company. Airline Economics asked very serious overcapacity in the market
the same manner. For the remainder of Chris Doan, CEO of Team SAI, what his in the short-to-medium-term making
2011 and into 2012, a pattern mirroring experience was in trying to secure in- the investment a prolonged affair? One
that of 2009 will emerge with the world vestment into the maintenance market. large private equity investor of note told
fleet continuing to grow but with aircraft “The playing field is somewhat inter- Airline Economics under condition of
being parked; newer, less maintenance esting,” he says. “It is cautious but pri- anonymity that an MRO can only be a
intensive aircraft will show their influ- vate equity seems to have a fair amount serious prospect in the long term if it
ence, with the contribution of the older of interest in the sector. They recognise is global with strategic hubs that can
vintages in decline as retirements acceler- the potential of consolidation, the frag-
ate. Meanwhile, younger vintage aircraft mentation that exists. That is the key. o7KHJOREDOEXVLQHVVF\FOH
have significantly lower unit costs and in It is not vying to make it grow because
just under two years there has been a sig- there are a lot of minefields that have to
KDVDVWURQJLQIOXHQFHRQ
nificant shift in the share of the younger be navigated today but to bring appro- 052DFWLYLW\DVLWGRHVZLWK
vintage fleets which in turn has resulted priate businesses together into a bigger
platform that has a very purposeful end.
PRVWDUHDVRIDYLDWLRQDQGWKH
in the average MRO cost per aircraft
per year falling by some US$300,000. It is an interesting play. We are starting ODVWIHZPRQWKVRIWKLV\HDU
2010 should have been a tipping point to see a little bit of that play out.” FRXOGFKDQJHWKHRXWORRN
as fleet size and utilization increased to Investors do worry that the long-term
meet demand, but the economic health future for the MRO industry will VKDUSO\p
of the globe of late has lead to a return to require mergers but this is also one of service just about anything in the air
fleet contraction whilst at the same time the attractions. Investors are looking and has serious exposure to South East
Asia. And even then the get-in point
4,500,000 $50.0 has to be a good one as the continued
investment would need to be dramatic
$45.0
4,000,000 to secure market share. In this market-
place, the appetite for this sort of invest-
$40.0
3,500,000
ment intervention is weak, but as MRO
$35.0 providers move into leasing and other
3,000,000
new areas, barriers start to remove
$30.0 themselves.
2,500,000
Even so Chris Doan; when asked
$25.0
2,000,000
about the interest from private equity
$20.0 (PE) firms, stated: “I would say there
1,500,000 has been a serious acceleration in the
$15.0 past 12 months. In fact in the first quar-
1,000,000 ter of 2011, in terms of transactions,
$10.0
equalled the entire 2009 – four times
500,000
$5.0 the transaction volume.” Unfortunately
this very encouraging trend has been
0 $0.0 stifled by the Eurozone crisis and the
2005 2006 2007 2008 2009 2010 2011
global economic melee currently play-
ASM (M) Total MRO ($B) ing out on the world stage. When asked
Source: TeamSAI Consulting if he thought PE firms were looking at
&$3$&,7<0$1$*(0(17n6,03$&7217+(0520$5.(7 the maintenance market because they
,1$6$,5/,1(60$1$*('&$3$&,7<&$5()8//<%<5('8&,1*$606%<05263(1' were hoping for buyouts, Doan replied:
68))(5('$'(&/,1(
“Probably not in the short term. Most

6 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MRO GUIDE

PE firms are going to be buying into a business. So there is that factor of sen- engineers that will be required to man
business for three to five years before a sitivity that we have never seen before. the entire facility. Global fleet growth
turnover, but you do have a number of I think that there is more likelihood of projections show wide variations and
MROs that are owned by PE today that world events causing quick adjustments give some cause for concern.
would be interested in that play. There on airlines to maintain their own profit- While North America and West-
are a couple of PE firms that own some ability.” ern Europe have the largest fleets and
of the big MRO firms that would typi- The future for third party MRO MRO markets, the growth areas lie
cally be interested, after they have had market share lies in geography. The in emerging regions such as Eastern
the company for four or five years…” Middle East, the conduit for travel Europe, India and China. While these
Some of those PE firms that invested between the APAC region and Europe is emerging regions are growing fast, their
in MRO before the crash are now in seen as the perfect location and Turkey overall size represents just a fraction of
difficulty and wanting to get out of the seems to hold many aces for the future the total market. Nevertheless, the fleet
market but they are now, due to falling of third party MRO. Turkish Technic’s forecast clearly indicates a shift to the
values, more or less stranded. Doan new HABOM facility is built with this east, which is expected to drive a level
says: “Timing into the market is very thought in mind, however it could all of parity when combining the Americas,
critical and those that came in five, six come to grief if Turkey were ever to Europe (Western & Eastern) and Asia,
or seven years ago with the intention of join the European Union (EU) and be including China & India:
having a three to five year turnaround subjected to Emissions Trading Scheme As a result, the APAC, European and
got hit pretty dramatically in the world (ETS) charges. As it is, and with the EU the Americas MRO markets are esti-
economic downturn. Then the question preoccupied with the survival of current mated to reach parity within 10 years,
becomes where are we in the business members, it is likely that Turkey will due to the population and fleet growth
cycle – at the bottom and starting to benefit hugely from being at the centre in the APAC region. Over the next ten
grow and how stable is it? Of course of global trading routes. years, the Asian MRO market will come
the stability question is an interesting The facility is so very large and the into parity with Europe and the Ameri-
one today because we do see airlines MRO growth rate in the Gulf region cas. Today the Americas commands
and therefore the MRO business being so prolific that one wonders if Turk- 35% of the market; Europe is about 25-
quite a bit more sensitive to events in ish Technic will be able to fill it at any 6% and Asia is below that; this will level
the world. Even with the earthquake in given time. This facility is enough to out, which is a staggering statistic. The
Japan, there was a huge downturn in cause regional overcapacity in the short growth has definitely shifted East and
airline business and it is going to have term, provided that Turkish Technic is from an investment standpoint that is
an impact in due course on the MRO prepared to hire the colossal numbers of where the excitement is going to be over

AMOS
A STORY OF SUCCESS
–
“WE ASSESS AMOS AS A TOP LINE PRODUCT WHICH IS ENDEARED AND
ACCEPTED AS A FINE TOOL BY OUR USERS,” STATES AIR ASIA

READ MORE ABOUT THE WORLD-CLASS M&E SOFTWARE SYSTEM AT

SWISS-AS.COM
MRO GUIDE

the next ten years.

The airline MRO industry has been
in a state of rapid transition for many Americas Europe Asia Middle East Africa
years as airlines, seeking cost and ser-
Market ($B) $17.0 $13.7 $11.6 $3.1 $1.5
vice improvements, have shifted from
in-house to outsourced maintenance as Market Share
36% 29% 25% 7% 3%
(2011)
the dominant model. The emergence of
CAGR
MRO competitors in low-labour-cost (2011-21)
2.4% 4.7% 6.8% 5.3% 3.5%
regions has also radically changed the Market Share
competitive dynamics of the industry, (2011)
29% 30% 30% 7% 3%
forcing traditional MRO competitors
to adapt to offer more sophisticated
services in order to remain relevant. NOTE: Americas = North America and Latin America & the Caribbean
This pace of change then sped-up dra- Europe = Western and Eastern Europe
matically over the past five years as the Asia = Asia Pacific, China and India
OEMs entered the market in what could
be described as a forceful manner. This $25.0
OEM intervention lead to increasingly
sophisticated support services being
offered, bundled ‘full-service’ offerings, $20.0
global footprints and relentless effi-
ciency improvements. MROs are now
$15.0
also unlocking unrealized value through
mergers, acquisitions, alliances and
the sale of non-strategic assets. Mean- $10.0
while, turmoil in the broader aviation
industry is creating significant pressure
$5.0
as airlines seek to cut costs, and ac-
celerated retirement of old-generation
fleets is reducing forecast demand. $0.0
The rapid growth and evolution of the Americas Europe Asia Middle East Africa
MRO industry is offering smarter and
2011 2021
MRO SPEND ($M) PER AIRCRAFT
Vintage Jan-08 Jan-09 Dec-10 Source: TeamSAI Consulting

1970’s $2.9 $2.5 $2.2 *52:7+/(9(/6',))(5%<5(*,21:,7+7+(+,*+(67*52:7+352-(&7(',17+($6,$3$-

&,),&5(*,217+,65($/,7<:,//5(68/7,17+(0$-25:25/'5(*,2165($&+,1*3$5,7<
Source: TeamSAI Consulting

1980’s $3.0 $3.0 $2.8 :,7+,1<($56

1990’s $2.0 $2.1 $1.9
2000’s $0.8 $0.8 $1.1
Grand Total $2.4 $2.4 $2.1 Average MRO Cost per Aircraft

more responsive competitors seeking $0.6

significant opportunities for growth and
profitability.
Millions

$0.5
Preliminary estimates for the 2011
global MRO forecast indicate a return $0.4
to positive, albeit small, growth (2.1%)
with growth expected to increase slowly
$0.3
at 3.4% CAGR through 2015 and 4.4%
2006 2007 2008 2009 2010 2011
CAGR through 2020. That said, 2011
has seen a sharp falling away of busi- HMV Line
ness over the past six weeks to October Source: TeamSAI Consulting
20 and the preliminary growth figure
$9(5$*(+09$1'/,1(0$,17(1$1&(&2676+$9('5233('6,*1,),&$17/<
could well fall. But total global MRO ‡ 777 UPWARDS OF 50% LESS THAN 767
is just starting a new growth cycle with ‡ HMV FREQUENCIES MOVING FROM 4-6 TO 8-12 YEARS
large numbers of narrow and wide body ‡ A350 AND 787 PROMISING FURTHER IMPROVEMENT

8 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MRO GUIDE

Source: TeamSAI Consulting

20000

18000

16000

14000
Number of Aircraft

12000

10000

8000

6000

4000

2000

0
2007 2008 2009 2010 2011

Year

Africa APAC Europe Middle East North America Central/South America

:25/')/((76,=(%<5(*,21,1$1'2872)7+(),1$1&,$/&5,6,6

AMOS
A STORY OF SUCCESS
–
“IMPACTING OUR BUSINESS POSITIVELY IN TERMS
OF PROCESS OPTIMISATION AND INCREASE OF
LABOUR PRODUCTIVITY,” SAYS AUSTRIAN AIRLINES
READ MORE ABOUT THE WORLD-CLASS M&E SOFTWARE SYSTEM AT
SWISS-AS.COM
MRO GUIDE

Source: TeamSAI Consulting

Widebody Widebody
Widebody 23% 24%
23%
2.7% 3.5% Narrowbody
Regional Jets Regional Jets
17%
CAGR Narrowbody CAGR 57%
Narrowbody 17% Regional Jets
60%
60% 19%

2010 2011 2021

19,675 20,203 28,591

/21*7(50)/((7*52:7+5(0$,1662/,'

aircraft requiring heavy maintenance side investor would seem worrying as aviation forecasts across the board with
checks in the months and years to come. market pressures are so extensive in the MRO and the aftermarket being no
So taking overcapacity in the market aerospace aftermarket that MROs are exception. Fleet growth forecast at 3.5%
to one side, there should be a steady being forced to enhance their services CAGR (compound annual growth rate)
growth in the number of aircraft being while also reduce the cost to the client to 28,591 in 10 years with ASM growth
maintained during this decade. MROs on what seems to be an ongoing basis. set to increase at 5.3% CAGR over the
find themselves having to re-design The MROs are in effect doing more for same period with aircraft utilization
the way they do business, from how less with less and thus many have been rates going into October 2011 remaining
they handle and agree a contract with a cutting their cost base and redesigning high. As of August 2011, fleet growth
client to how they maintain aircraft, en- their facilities to cut turnaround times. was on pace for the year with the global
gines and parts and flow them through Most long-term forecasts, be they fleet standing at 20,617, up 2.0% for
on a shop visit – All in the name of OEM, MRO or consultant forecasts, the year thus far from a 2011-21 CAGR
cutting turnaround times while also are all relying on one thing: Population forecast of 3.0% in Jan 2011, this in part
cutting cost to the operator at the same growth and the growing middle class. is due to the continued expansion of the
time. This is something that to an out- It is these factors which drive long term North American fleet.

2011-2021 Regional CAGRs Historic MRO Market and Fleet Size

$50.0 25,000

$45.7
1.0% $45.1
North America $45.0
$42.2 $42.3
$41.0
3.2% $40.0 $38.8 20,000
Western Europe $38.3
$37.8 $37.0
19,675
19,330

$36.1
18,816

3.5%
17,903

$35.0
Africa
17,627
17,206
MRO Market ($USB)

16,030

4.4% $30.0 15,000

Asia Pacific
Fleet Size

$25.0
4.9%
Middle East

Latin America $20.0 10,000

5.7%
& Caribbean
$15.0
8.4%
Eastern Europe
$10.0 5,000

China 9.1%

$5.0

India 9.6%
$0.0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

MRO Market Fleet

Source: TeamSAI Consulting

%879$5,(6&216,'(5$%/<5(*,21%<5(*,21

10 Airline Economics: MRO Global 2011 www.airlineeconomics.co

the height of excellence since 1967
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providing first class service to major airlines around the world. Today,
we continue to provide valued solutions to the aviation industry.

Heavy, Light & Line Maintenance

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MRO GUIDE

The bottom line for the MRO sector

The operator will continue to: aftermarket remaining independent of these services
 manage core operations (flying) the OEMs and this will lead to lack of
 outsource maintenance as it choos- data and choice for the operators on a THE BENEFITS
es, basing outsourcing decision on scale not imaginable just ten years ago.  Provides total cost advantage
key guidelines Once the OEMs control the data then  Offers more flexibility to operators
there is no going back. This is why there  Shift risks and costs away from
MROs therefore must: has been a scramble for maintenance airline
 identify new market needs and providers to be a part of the OEM pro-  Gives independent MROs opportu-
value added services that support grams, which has served to accelerate nity to form credible network with
airline requirements the whole process. extensive capabilities
 reinvent the business model to Airlines are going to ask in ten years’  Regulation could temper outsourc-
position itself to meet needs time just how this has happened, just ing growth somewhat, but large
 develop business processes to opti- as the lessors are today asking many players will adapt
mize service questions about their future handling
of aircraft and maintenance reserves The most successful MROs will be
Key decisions guidelines for choosing on the same. The key for the future will those able to offer a full array of services
maintenance services/outsourcing be the control of price escalation, but across all aircraft types offering total
 Labour without viable alternatives to the OEM maintenance through a long term
 Material programs, the airlines will not be in a partnership. This is the key for MROs
 Terntime position to do a great deal other than independent from OEMs. The real
 Performance pay. benefit of opting for an independent
 Quality third-party or in-house provider is data
TECHNICAL SUPPORT SERVICES share. If an MRO is able to service a
The mainstay for MROs remains  Includes all “back office” functions mixed fleet at any time in any zone
the global narrowbody fleet, this will such as engineering, planning and with one service provider, that will be a
continue to expand for the foreseeable supply chain significant benefit as the provider will
future providing increasing amounts of  Early stages of the emergence of share data at all times over all types that
business over the long term: Or at least Tech Services outsourcing will also embrace the latest cost saving
that is the overriding message from the  Lately, larger carriers are recogniz- technologies be they PMA, DER or
MROs. The truth of the matter is that ing the leverage of outsourcing whatever is needed. This provides a cost
MRO business will not increase over the
next five to ten years on anything other Source: TeamSAI Consulting
than the current expanding narrowbody 100%
fleet. 90%
Aircraft age ranges and the effect on
the maintenance market over the next 80%
five to 10 years, in the US especially
70%
where there are many MD and 757 air-
craft, is going to be monumental. Once 60%
they are removed from the market and
the new aircraft come online the MRO 50%
will lose business. The phenomenon of 40%
new aircraft taking less maintenance re-
quirement leads to a very black market 30%
for the Americas especially over the next
20%
ten years with very low growth.
What can be said for global MRO as 10%
a whole is that new airframes in produc-
tion will require less maintenance while 0%
the new engines, which will cost more HMV (Check) Engines Components Line Tech Support

to maintain, are on the whole being Note: Outsourced MRO includes work outsourced to independent MROs or to OEMs but
captured by the OEMs by design with not work done by operator-affiliated MROs
the same scenario applying to compo-
nents also. Thus it is hard to see the */2%$/2876285&,1*

12 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MRO GUIDE

Comparison of popular Narrowbody and Widebody aircraft order books

Manufacturer Aircraft type Model Aircraft in Backlog No. of airline No. of aircraft Production
service operators on operating years (to date)
lease (approx)
Boeing 737NG -700 1138 501 78 380 14
-800 2037 1445 130 957 14
777 300ER 247 198 23 114 8
Airbus A320 A319-100 1217 254 103 520 16
A320-200 2302 1756 210 1193 23
A321-200 528 214 64 214 15
A330 -200 377 256 65 191 13

efficient service that an operator will hedge against a labor shortage  Expand geographical reach
be at pains to refuse. This is the blunt  Pursue full-service capabilities
truth of MRO moving into 2012 and VALUE CREATION  Create strategic OEM alignments
it is a truth that for many will require  Implement cost reductions and  Balance portfolio with counter-
either expansion, acquisition or invest- new efficiencies cyclical businesses
ment. There is no middle ground and  Adopt supply chain innovations
although an MRO may inform you that  Focus on reliability & dependability MERGER AND ACQUISITION
they are secure in their sphere of influ-  Embrace new, smart aircraft sys-  Identify value-oriented innovations
ence, if they do not meet the aforemen- tems that contribute to airline customer’s
tioned criteria, then they are operating  Manage and showcase efforts with cost focus
on borrowed time as globalisation of the appropriate metrics  Focus on the supply chain & distri-
aviation aftermarket speeds. An MRO bution channels for components &
provider must be global particularly DIVERSIFICATION material
with carbon taxes arriving in many  Expand market offerings  Leverage JVs and alliances
corners of the globe and fuel prices con-
tinuing to rise on a long term basis. An
operator cannot afford to fly an aircraft
across the globe for maintenance checks Relationship Based Performance Based
in the future, this is the silver lining for
the independent MROs. The operators
and OEMs alike will in the end need
them. As Chris Doan states: “It is more Inventory Tolerant Inventory Tolerant
about firms setting up partnerships
within existing MROs in the growth
regions. You are not seeing opportunity Asset Utilization Not a Focus Turn-Around Time Prioritized
for a LHT or SRT to go in and set up,
but there is an interest in joining forces
in joint venture with MRO shops in the
Middle East, including India and China. Little Accountability Accountability for Results
That is the way it is heading as it really
brings experience in with local inter-
est and creates a very robust business Limited Competitive Threat Global Competition
model for the MRO.

Four basic strategies for MRO growth

Metal & Mechanical Composites & Electronic
LABOUR
 Capitalize on outsourcing needs of
airlines Western Focused Eastern Focused
 Develop expertise in core activ-
ity areas and outsource non-core
Source: TeamSAI Consulting
activity
 With upward wage pressures, focus 7+()8785(287/22.
on efficiency and productivity +2:7+(35,25,7,(6$5(&+$1*,1*)25$,5/,1(6r7+()8785(287/22.
 Actively develop new talent as a %86,1(66(;3(&7$7,216$5(&+$1*,1*5$3,'/<

www.airlineeconomics.co Airline Economics: MRO Global 2011 13

MRO GUIDE

At this point, the question needs to be

asked: What will happen to operators
who are currently ordering mixed fleets
of aircraft virtually free of charge on the
back of signing aftermarket contracts?
For now, it seems that unless there is
a change of policy at the OEMs, the
operator will not be able to compare
aircraft data at all and will not have the
in-house skills to deal with aftermarket
problems in a cost effective manner.
Thus the operators have in effect helped
speed the process of the OEMs control-
ling their fleets.
One business on the frontline with a
headache on the subject of OEM incur-
sion is Swiss Aviation Software. When
asked about the effect on his business
of OEM additional services, Ronald
Schaeuffele, CEO of Swiss Aviation
Software, which owns industry leading
IT product AMOS, stated: “The OEMs delivered with the aircraft type, which using so many systems. They are now
produce aircraft and that is their core for mixed fleet airlines, however, loses adding 787s to their fleet with all the
business. Apart from that, they provide all the benefits of having an integrated loadable software components and with
additional services, such as systems for system. It would be much easier if the all of the headaches that new genera-
point solutions. The problem for us as OEMs concentrated on building hi-tech tion aircraft can have. The two airlines
a software vendor is that some of these aircraft and provided hi-tech structured which merged, would need to merge the
solutions are open to connectivity while information, and would not be engaged acquiring airline’s data into the other
others are not. I have just come back in entering the market of providing IT airline’s older systems or vice versa even
from a customer that was asking me if systems.” before they can even think about an
Amos could connect to a particular sys- The American Airlines order of integrated approach for future cost sav-
tem from Airbus, but Amos cannot and September 2011, which consisted of ings. In fact it is reasonable to assume
it is obvious that this is not an Amos- huge numbers of Boeing 737 Max and that such a large airline would not be
unique problem. Airbus A320neo aircraft, begs the ques- in a position to move forward with an
The Boeing toolbox is open to grab tions what the future will be like for the integrated fleet management approach
information from and can be linked airline when it comes to maintaining for at least a decade. That said, Luf-
with Amos to some extent. If you are a and tracking the needs of these aircraft thansa too operates different systems
customer with the right market power, when comparable data between the two and is actually running with SAP/
you can go to Boeing and ask for all the fleet types will not be easy to come by. point solution, but it has everything
manuals out of the toolbox and load it If the two systems don’t look exactly the under control and information flows
into Amos. For smaller customers with same, maintaining these fleets will be a between MRO shops freely. But this is a
mixed fleets the financial implications challenge. system that requires a huge amount of
might be too tough to choose this way.” When Airline Economics looked investment both in time and resources
He adds: “When Airbus delivers a new into the fleet management systems of with many people staffing the same.
aircraft, the documents delivered with a large US airline, which subsequently Lufthansa is an example to American
the aircraft – including the component merged, it became clear that there Airlines but if AA in the future wants to
list of the aircraft – are completely dif- might be a need to become increasingly be able to manage its mixed fleet more
ferent from those Boeing delivers. The nervous about their future maintenance efficiently, then it will have to invest
two manufacturers don’t seem to com- abilities. The US is one of the largest very heavily in bespoke systems that can
municate on this issue; they don’t seem potential markets for fleet manage- create an in-house crossover of data all
to be preoccupied with the data format ment systems but many still use Maxi running on one platform. This cost over
of information they provide. They pro- Merlin’s outdated legacy systems. One the medium-to-long term will erase all
duce hi-tech aircraft and do not focus side of the airline was using one legacy gains made through reduced aircraft/
too much on data format standards. system and the other side was using engine prices at point of sale.
Sometimes they provide IT systems a different system; the shop floor was Our heartfelt thanks goes to Team
bundled with a new aircraft. Airlines using another system, and for compo- SAI for the provision of data and intel-
with 787s on order, for example, might nent control they were using Oracle and ligence used within this feature and
profit from an IT management system so on. Just imagine the implications of throughout this publication.

14 Airline Economics: MRO Guide 2011 www.airlineeconomics.co

 Knowledge
KPMG is a leading provider of
cross-border advisory services
to the international aviation
finance and leasing sector.

www.kpmg.ie/aviation

© 2011 KPMG, an Irish partnership and

a member firm of the KPMG network of
independent member firms affiliated
with KPMG International Cooperative To find out more about how we can help you, please contact
(“KPMG International”), a Swiss entity.
All rights reserved. Tom Woods on +353 1 410 2589 or [email protected]
DATA SYSTEMS

Who combines
the data?
Amalgamating two or more data systems is a costly
and time consuming affair – even though a company
may save time and effort in the long run. So how have
Swiss Aviation Software got round this thorny problem?

M
any airlines and main- that are based upon best practice built
tenance companies up over a number of years and with cli-
within the aviation ents on a case-by-case basis.
sector know all too Swiss-AS chief executive Ronald
well from past mergers Schäuffele says the business of providing
and acquisitions and/or internal revamps data management products is one that
that data migration is a huge task and one goes well beyond the initial agreement,
that cannot be undertaken lightly. The task installation and training processes. “We
of data migration can be high in both cost are open for any additional fine tuning
and labour hours, and can provide mixed and reshaping of functionality and have
results in the first instance until staff train- a real relationship with our customers –
ing and troubleshooting processes start to it is not just a black box, it’s a community,
take hold. One company that has been able we speak to each other,” he says.
to get around this is Swiss Aviation Soft- “We optimise and adapt to new tech-
ware (Swiss-AS) which uses an innovative nologies to help move the customer’s
and advanced migration tool that eases business forward. This often results in
the data transfer from the legacy systems reducing manpower because we can
to their system. prove that use of our system will be of
Swiss-AS has gained substantial benefit for new customers. They see the
knowledge over a number of years in per- value that the integration of the systems
fecting the best possible data migration brings, such as the ability to have infor-
procedure and the firm uses that same mation at your fingertips – for example
knowledge to assist customers in mak- when users see with one right click what
ing the right decisions when it comes to logistics is doing and thereby prevent
planning a data-transfer project. Many that something in the planning is going
mainstream Enterprise Resource Plan- wrong. There are also minor functional-
ning (ERP) system providers have not ities where customers can send messages
entered the aviation maintenance and within the company – much like an inte-
engineering sector primarily because the grated email system – where you can look
system optimises all the processes in an at one document to see all queries every-
engineering environment, which means body has raised over a set period. It brings
it has to be highly bespoke due to the the departments closer to each other.”
complex nature of the business. It is also The decision driver for system inte-
not a high volume market, which is prob- gration for an airline, operator and/
ably why ERP system providers have not or maintenance company is never the
successfully expanded into it. This leaves same. Some companies will concentrate
the market open for targeted operators on necessity while others will be look-
such as Swiss Aviation Software, Trax ing to increase margins. When asked
and Lufthansa Systems. Each of these the question of how a system provider is
companies has a reputation for products able to measure the benefit to a customer

16 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 DATA SYSTEMS

www.airlineeconomics.co Airline Economics: MRO Global 2011 17

DATA SYSTEMS

in time and money only, Schäuffele is

unable to give an accurate response in
terms of figures. “It is very difficult to
quantify the benefit,” he says. “We have
benchmarking figures from various
business cases of customers who have
been reviewing what they have achieved
due to implementing a new system, but
we are in such a dynamic environment
that it is not always possible to compare
what firms can save after two or three
years with what they initially formulated
in their business case. Because the envi-
ronment will have changed so much over
the years. But of course our customers
are doing more business with less cost.”
Schäuffele added that it is very hard
to quantify the benefits in a general way
because a customer’s increase of efficiency
heavily depends on the its productivity
prior to the software implementation
project. The final comment reflects the
reality of the situation for maintenance
and engineering firms – it is a matter of
doing more business at less cost.

UNDER PRESSURE
The maintenance sector is under terri-
ble pressure today to lower turnaround
times, reduce costs and at the same time
provide an enhanced level of all-round
service to the customer. This against
a backdrop of airlines parking aircraft
again as passenger numbers fall and
increased competition from Original
Equipment Manufacturer (OEM) after-
market services. OEM’s incursion in the
aftermarket has been highly successful
in the extreme with most agreements
coming at the point of sale for an air-
frame or engine.
For data management firms, OEM
agreements are providing a headache
because of the lack of data share that
the OEMs will allow. Under a usual data
management and integration agree-
ment, customers are provided with a
wide spectrum of generic interfaces
which promote an easy integration of
the system into the customers’ existing
system environments. However, this
is not always possible with some OEM
aftermarket agreements.
When asked if the OEM incursion has
had an effect on his business, Schäuffele
said: “Yes, I have a headache. The OEMs
produce aircraft and that is their core
business. Apart from that, they provide

18 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 DATA SYSTEMS

additional services, such as systems for of modern, cost-saving systems, which in changed: “In the past, we mainly focused
point solutions. The problem for us as turn affects the long-term bottom line. on Europe, some parts of Africa and the
a software vendor is that some of these This factor is however a very serious mat- Middle East and previously we were not
solutions are open to connectivity while ter when one considers airline mergers really prepared to go beyond in markets
others are not. I have just come back from and acquisitions and the lack of cash that like Asia or Asia-Pacific or in the US. If
a customer that was asking me if Amos carriers have to complete a merger. you want to expand your business into
could connect to a particular system from the US, you need to have a separate legal
Airbus, but Amos cannot and it is obvious CONFUSON IN THE RANKS entity over there and you need to have
that this is not an Amos-unique problem. “The US is one of our biggest poten- people working there that speak and
The Boeing toolbox is open to grab infor- tial markets but they still use outdated think like they do.
mation from and can be linked with Amos legacy systems,” says Schäuffele. “I was “So we spread our wings to the US in
to some extent. If you are a customer speaking to the technical staff from a September/October last year [2010] and
with the right market power, you can go big airline, where one side of the airline have immediately generated a number of
to Boeing and ask for all the manuals out was using one legacy system and the leads. We have signed a deal with South-
of the toolbox and load it into Amos. For other side was using a different solu- ern Air and we hope to sign in a couple
smaller customers with mixed fleets the tion; the shop floors were using a third of weeks with a second one and a third
financial implications might be too tough system, and for component control they is in the pipeline. We want to have this
to choose this way.” were using an ERP system and so on. project finished in such a way that we can
He adds: “When Airbus delivers a new Just imagine the implications of using send a prospective customer to Southern
aircraft, the documents delivered with so many systems. Imagine they are now Air to see what we have achieved there.
the aircraft – including the component adding 787s to their fleet with all the We want to make sure that Southern Air
list of the aircraft – are completely dif- loadable software components and with is happy with the system and exploits the
ferent from those Boeing delivers. The all of the headaches that a new generation full potential of Amos and can therefore
two manufacturers don’t seem to com- aircraft will produce. This will be a real be used as a good reference site.”
municate on this issue; they don’t seem challenge for them. Let’s further develop Getting into the US market is no easy
to care about the data format of informa- this worst case scenario: The airline then task however, which is why Swiss-AS has
tion they provide. They produce hi-tech taken the decision to launch a joint ven-
aircraft and do not focus too much on o7KHSRWHQWLDORIWKH86 ture with Lufthansa Systems Americas.
data format standards. Sometimes they Swiss-AS is now represented in Miami,
provide IT systems bundled with a new PDUNHWLVZHOONQRZQWRWKH Florida, as a business unit within Luf-
aircraft. Airlines with 787s on order, 052VRIWZDUHLQGXVWU\ thansa Systems Americas.
for example, might profit from an IT Schäuffele says: “Swiss-AS found in
management system delivered with the
0DQ\DLUOLQHVLQWKH86 Lufthansa Systems Americas the ideal
aircraft type, which for mixed fleet air- FXUUHQWO\XVHRXWGDWHG052 partner for its strategic expansion plans
lines, however, loses all the benefits of to market Amos in the Americas. While
VRIWZDUHDQGZLOOVRRQHURU
having an integrated system. It would be being the market leader in Europe and
much easier if the OEMs concentrated ODWHUVFUHHQWKHPDUNHWIRU having a substantial market share in
on building hi-tech aircraft and pro- EHVWRIEUHHGIXOO\LQWHJUDWHG other parts of the world, Swiss-AS now
vided hi-tech structured information, intends to intensify its presence in the
and would not be engaged in entering 052VRIWZDUHVROXWLRQVp US market. The potential of the US mar-
the market of providing IT systems.” ket is well-known to the MRO software
The problem of OEM data share will needs to merge with another airline with industry. Many airlines in the US cur-
be compounded where an airline orders a a similar scattered system landscape and rently use outdated MRO software and
mixed fleet with aftermarket agreements the acquiring airline’s data needs to be will sooner or later screen the market
attached; the competition between the transferred into the other airline’s older for best-of-breed, fully integrated MRO
Airbus Neo and the Boeing Max – for air- systems or vice versa. It is difficult to software solutions.
lines such as American Airlines that have believe in an integrated approach in such “Miami seems an excellent choice
ordered a large mix of Boeing and Airbus an environment.” to Swiss-AS since the city is the link
aircraft – may have trouble in five or six- In the past data management com- between South and North America and
years when they need to have comparable panies have concentrated on their own at the same time a gateway destina-
data between the two fleet types. “If the regional sphere of influence; Swiss-AS tion to the rest of the world. Swiss-AS
two systems to maintain these fleets don’t has had particular focus on Europe, was looking for a partner and found in
look exactly the same, it presents a prob- while Trax concentrated on the Ameri- Lufthansa Systems Americas the ideal
lem,” says Schäuffele. cas, with the two fiercely competing in the set-up for its strategic expansion plans.
Another factor suppressing the growth Middle East and the Asia Pacific regions. The American subsidiary of Lufthansa
of the data management sector currently is However, Swiss-AS is moving in on the Systems has been based in the US for
the lack of cash at many airlines across the American market in a big way. Airline more than 15 years and has long-stand-
globe which prevents the implementation Economics asked Schäuffele what has ing relationships and experience with

www.airlineeconomics.co Airline Economics: MRO Global 2011 19

DATA SYSTEMS

o:HKDYHJURZQRYHUWKHSDVW have been adding functions to the main- orders. In future, all Amos users can define
tenance planning module, while adding at whatever place in the system which kind
FRXSOHRI\HDUVZLWKDJURZWK complexity and diversity. Now we go one of approval workflow they want to imple-
UDWHRIrEXWZHGRQRW step back and consolidate the existing ment. Since approval workflows are so
business functions prior to adding new different between countries and cultures,
ZDQWWREHFRPHWKHELJJHVW ones. The same logic rules shall be applied we have agreed that the approval workflow
6ZLVV$6MXVWZDQWVWRNHHS to all functions of the maintenance plan- system needs to be completely generic and
ning module,” says Schäuffele. that it must be adjustable to the customers’
WKHRSWLPXPEDODQFHEHWZHHQ He adds: “Another big step forward needs. All of this will be released between
DFTXLULQJQHZFXVWRPHUV will be the introduction of a rule engine in now and the end of next year.”
YHUVXVPDLQWDLQLQJZKDWZH Amos, which is a graphical way to define
complex behaviours of programmes in UP FOR THE FIGHT
KDYHDOUHDG\DFKLHYHGp the system, such as the hierarchy of con- As companies such as Swiss-AS concen-
tractual terms in the program Contract trate more on pure MRO and compete
airlines in North and South America. Management. Thanks to this new feature, more heavily against one another, they
Amos has been positioned within Luf- clients will be able to do visual program- involve themselves more heavily in a
thansa Systems Americas as a business ming in Amos via drag and drop. They market under great pressures. It would
unit that will be fully dedicated to Amos- will have a tool at hand that allows them be folly for the aviation data manage-
related activities. This approach enabled to visualise contractual rules. Swiss-AS ment system providers such as Trax and
the US Amos team to start its business is in the process of introducing this rule Swiss-AS to devalue what is currently
right away while profiting from the engine in all areas where the system deals a highly investable arena that looks set
infrastructure, sales distribution chan- with very complex behaviours.” for strong and rapid growth. Schäuffele
nels and good reputation of Lufthansa sums up his thoughts in a manner that
Systems Americas. Lufthansa Systems IN THE PIPELINE would impress any investor.
Americas has many years of experience “We have a huge amount of develop- “We have grown over the past couple of
in implementing software solutions in ment in the pipeline for pure MROs. One years with a growth rate of 20–25%, but
the aviation business. By co-operating of these developments is devoted to the we do not want to become the biggest.
with Swiss-AS, the aviation IT pro- subject ‘material flow tracking’. Currently Swiss-AS just wants to keep the optimum
vider complemented its portfolio for the material is properly tracked when it is balance between acquiring new custom-
American market. The Amos business inside the customer’s store or installed/ ers versus maintaining what we have
unit will focus not only on sales but also removed from an aircraft. The move- already achieved. At the same time, we
on project management and consulting.” ments between store and aircraft are not are committed to continuously investing
really monitored. In future you can define in the product in terms of technology and
THE BIG SQUEEZE per part number tracking points, which functionality. We think it can turn sour if
The business in the pipeline for Swiss-AS indicate in the system where the part we start selling more aggressively and sell
is impressive and is telling. In such uncer- number is moving through your organi- at too high a premium. This is not good
tain times, airlines and MROs alike are sation. The client will have the possibility for the customers and it is also not good
desperate to reduce costs and gain what to define an unlimited number of flows for the supplier. The only disadvantage
business is out there. “We have signed a per component that they want to control. is our connection to the Swiss franc. Our
considerable number of contracts this We are developing this workflow together cost base is mainly in francs. Fortunately,
year,” says Schäuffele. “We went through with our latest customer. You see, Swiss- most of our income is still in Swiss francs.
a period where we were pushing ahead AS is definitely pushing Amos into the Since the very beginning we were very
with 30 potential customers. Nine have MRO arena – being a high-yield market. cautious not to have the currency risk on
signed so far, that is to say we are closing Also for MROs have we introduced the our shoulders and customers were more
the deals now, which we have worked on possibility that third-party maintenance than happy to have Swiss franc contracts
for months, sometimes even years.” providers can work with mixed author- because they expected this currency to be
But this is only one side of the coin, ity/certification set-ups while the system more stable with lower inflation rate risk.
the other is the needs of customers to will always produce the right type of cer- Many airlines were really pushing to sign
drill even more out of existing contracts tificate dependent on the ownership of franc contracts. Currently we have more
with Swiss-AS. “At the same time we have the component/aircraft. This need arose than 100 customers and we still sign
large-scale developments in process. because we have environments in our Swiss franc contracts. The ones we sign
Times have changed and we always have community where MRO providers work in US dollars at the moment don’t have a
to invest in keeping the system state-of- for different companies under different real big negative impact on us, as we try
the-art. We continuously screen trends certification rules. to have the cost basis of those contracts
in the industry and add/enhance the “Many more projects could be men- in US dollars. We would like to charge
functional scope. We are now optimising tioned here. I just want to refer to one everyone in Swiss francs, but we had to
and reorganising the planning of main- other project in this context. Currently we recognise that some customers want to
tenance events in Amos. Over years we have an approval rule system in place for sign US dollar or euro contracts only.”

20 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 DATA SYSTEMS

Swiss Aviation Software and its Amos product

For over 20 years Swiss Aviation Soft- Combining 20
ware (Swiss-AS) has been providing years of innova-
a range of bespoke management sup- tion and excellence
port services to the aviation sector. In in the area of IT/
order to be able to give customers the MRO, Swiss-AS has
most benefit from the implementa- become a fixture in
tion of Amos, Swiss-AS offers a full the MRO software
package of services covering the whole market and the
range of services and thereby guaran- industry-leading
tee a successful and reliable product maintenance man-
performance. Ranging from initial agement system in
requirement studies to system instal- Europe and beyond.
lation, from user training to consulting Since the late
and continuous support. Amos Opera- 1980s the mainte-
tion Services (AOS), a service offered nance and engineering system Amos o&RPELQLQJ\HDUVRI
by Swiss-AS, covers a predefined set of has been setting the standards in a
tasks related to the administration of highly specialised market segment LQQRYDWLRQDQGH[FHOOHQFHLQ
the application Amos and the underly- and has attracted more than 100 cus- WKHDUHDRI,70526ZLVV$6
ing database. tomers from all over the world. Its
Swiss-AS provides strong leader- solid customer base ranges from pure
KDVEHFRPHDIL[WXUHLQ
ship throughout the project to ensure operators of all sizes, major low-cost, WKH052VRIWZDUHPDUNHW
the implementation stays on time and regional and flag carriers to large
airline groups and MRO providers.
DQGWKHLQGXVWU\OHDGLQJ
on budget, while fulfilling the custom-
ers’ expectations. Swiss-AS helps its Ryanair has been a customer since PDLQWHQDQFHPDQDJHPHQW
customers to get the most out of their 1997/98. Lauda-air being one opera- V\VWHPLQ(XURSHDQG
Amos investment by providing reliable tor of the Austrian Airlines group
consultancy services not only during joined the AMOS community in 1994 EH\RQGp
the implementation project, but also while the entire Austrian Airlines
for the complete life cycle of Amos, group came on board in 2002. software package Amos delivers all the
including management consulting, Alitalia is a big customer, with 130 required tools to meet the demanding
process analysis and system audits. aircraft. Swiss is also becoming one requirements in the fields of mainte-
This process includes a comprehen- of the biggest customers because it is nance, engineering and logistics.
sive support package through an Amos migrating its data into Amos for its Today, more than 100 customers in
Online Support tool and Amos Online entire fleet. Amos lists GOL in Brazil, four continents run Amos applications
Documentation. and AirAsia in Kuala Lumpur, and it has – and as customers actively participate
Over the past years, Swiss-AS has just signed with South African Airways. in the further development of soft-
gained a high reputation around the Swiss-AS helps customers to ware, the scope of functions in Amos
world, which is the biggest difference successfully manage the complex is increased with every new customer.
from five or 10 years ago; there are fewer requirements of a modern aircraft Needless to say, Amos completely ful-
names left in the market today acting on fleet whether in the context of air- fils the airworthiness standards of
a global level. Growth is being driven by lines, MRO providers, pure operators EASA and FAA and is continuously
reputation and word of mouth. or flight schools. In its fully integrated updated accordingly.

www.airlineeconomics.co Airline Economics: MRO Global 2011 21

ENGINES

More MRO for

your money
MRO Global looks
into the maintenance
providers market and
outlines some of the
options available certain
engine types.

E
ngine original equipment life. These include regular engine washes decade to some 16,000 in 2020 – that’s an
manufacturers (OEMs) to ensure the working parts inside the additional 6,000 engines to support and
and maintenance repair engine are as clean and contamination- maintain. This is said to be larger than
and overhaul firms (MROs) free as possible, as well as asking pilots not the absolute engine fleet growth in North
are together responsible for to use full throttle unless strictly necessary America and Europe combined during
the performance of an asset, which is a due to load, airfield altitude or atmo- the same period. Engine MRO suppli-
prerequisite to airline reliability, aircraft spheric conditions. According to engine ers and others in the related supply chain
availability and fuel burn – the bulk of an manufacturer CFM International (CFMI) who have not already developed cor-
airline’s cost base. It also represents the all these techniques can increase time on- porate, capacity, customer support and
largest share of maintenance spend. It has wing by 10% to 20%. logistics strategies for the Asia region now
often been said that the only real low-cost Growth rates in Asia (especially China risk losing out on global market share by
shop visit is the one you don’t have. But air- and India) will be high over this decade. some margin. Asia-Pacific accounts for
lines are getting smarter at stretching time The active jet engine fleet in Asia-Pacific almost 50% of the absolute growth in
on-wing by investing in a variety of tech- (including China and India) will grow engine MRO spend and the region will be
niques and activities to enhance engine from under 10,000 at the start of this a larger engine MRO market than North

22 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ENGINES

o&KDQJHVLQDLUOLQHEHKDYLRXU availability from OEMs. So it is expected

adoption of PMA will recover and increase,
KDYHPHDQWHQJLQHRYHUKDXO especially in the airframe components and
VXSSOLHUVGHSHQGLQJRQWKHLU interior parts of the aircraft.

HQJLQHDQGFXVWRPHUSRUWIROLR ENGINE OEMS LEAD THE AFTERMARKET

KDYHVHHQUHYHQXHVGHFOLQHRQ In the mid-1990s, engine OEMs
embarked on a strategy to capture the
DYHUDJHE\rp total maintenance value as part of their
product lifecycle.
MRO. Between 2007 and 2009 airlines The OEM approach was simple:
parked many old maintenance-intensive  <hgmkhefZm^kbZeikb\^l%pab\aZk^Z
aircraft, such as the 737 Classic and MD significant portion of maintenance
aircraft, and reduced overall aircraft use costs.
to better match capacity with demand. In  <hgmkhebgm^ee^\mnZeikhi^kmr'
2010 aircraft were moved back into service
at pace, but now in the latter half of 2011 The proposition they made to the air-
schedules are being cut once more and the lines was logical:
general global market slowdown will once  Ikhob]^ik^]b\mZ[e^\hlml!ihp^k&[r&
again see less aircraft in the air for the next the-hour deals).
six to 12 months. Red ink is again flowing  K^fho^Zll^mhpg^klabi\hlmh_liZk^
across the balance sheets of airlines across parts.
the globe and so cost reductions are at the  Hû^k^qi^kmbl^maZmhi^kZmhkl\Zgghm
vanguard of thinking, and airlines have easily maintain on their own.
sought many ways to reduce their engine  Ikhob]^lbg`e^lhnk\^_hkZeefZbgm^-
MRO spend. Examples include: a reduc- nance needs.
tion in work scope for shop visits; where  Lik^Z]ma^bgo^lmf^gmbg^qhmb\mhhe-
possible, more repairs and less replace- ing over a larger base.
ment of expensive parts; deferment of the  FZgZ`^ma^\hfie^qbmr'
replacement of expensive life-limited parts
and use of short-stub engines; greater The effect on third-party/airline
leverage of spare or surplus engines in MROs:
lieu of an overhaul; and, of course, seeking  <hfihg^gmZg]Zbk_kZf^H>FlaZo^
renegotiation of MRO contracts. All these adopted similar models
changes in behaviour have meant engine  <hfihg^gmZg]Zbk_kZf^H>FlaZo^
overhaul suppliers, depending on their developed less maintenance-intensive
engine and customer portfolio, have seen equipment, which they control closely
revenues decline on average by 10–15%.  EZ[hnkZk[bmkZ`^Ziieb^lik^llnk^mh
Ironically, the recession has seen the third-party/airline MROs
use of PMA parts decline by 17% since the
2007 peak. There are many reasons for The result:
mabl%bg\en]bg`3Zbkebg^nl^h_[nû^klmh\d If you aren’t an OEM MRO, you need
rather than buying inventory; more repairs a strategy to align yourself to deliver
America and Europe by 2020. This is rather than replacement of parts; parking maximum value and stable costs to the
driven not just by the fleet growth, but and cannibalisation of the mature aircraft customer over the long term.
also by the age demographics of the fleet fleets where PMA had a higher penetra- On newer engine models, engine
already in operation. tion of material content; reduced airline OEMs have a competitive advantage
 >g`bg^ \hlm i^k ahnk \hgmbgn^l mh resources available to the PMA approval over other third-party suppliers. OEMs
climb with each passing year. process; and, last but not least, OEM are able to sell long-term MRO support
 ?e^^m kZmbhgZeblZmbhg !+))1Ç+)*)" defensive measures. This latter point can deals at the point of aircraft purchase
helped to curtail average total spend be illustrated by GE/CFMI’s agreements and they control access to technical data,
per engine. with potential adopters/users of PMA, the documentation and many parts. They
 Ahp^o^k% mhmZe hi^kZmbg` \hlml Zk^ independent suppliers such as Aveos and can also be more flexible on material
coming down when considering the ST Aerospace. This has successfully given ikb\bg`pbmabgma^bkFKHhû^kl%lahne]
improvement in fuel consumption on GE/CFMI greater influence over the parts/ they choose to do so. As evidence of the
newer engine types. material supply chain. Despite this, PMA market strength of OEMs, one just has
The recent recession and global slowdown remains a strategic tool for airlines to use to observe the market penetration of
]nkbg`+)**aZlZû^\m^]li^g]hg^g`bg^ in the face of increasing prices or poor parts ma^ Kheel&Khr\^ MhmZe<Zk^ hû^k hg bml

www.airlineeconomics.co Airline Economics: MRO Global 2011 23

ENGINES

own engine models, especially the Trent all the wash effluent while eliminat- ments due immediately, some of the
family, and the aftermarket agreements ing overspray and dripping. As well as fZchkl h__^k I[A pbma iZrf^gm i^k
fZ]^[r@>(<?FB_hkma^E^ZiQh_eZm^' addressing environmental, health and event (PPE). Under a PPE agreement
As the OEMs take greater control of worker safety concerns, the arrange- the customer pays the rate per engine
the aftermarket, airlines need to remem- ment means engines can be washed in hour flown only when the shop visit is
ber to develop strategies that enhance many more locations within airports or being performed. This model allows
competition and/or help protect/reduce maintenance facilities. the operator to conserve cash until the
costs, especially on the larger, newer At the Paris Air Show 2011, flydubai, visit is due and could be favourable in
engines where OEMs tend to have a the world’s fastest-growing start-up air- times of limited cashflow, and this is an
stronger market position. The ability of line, signed a contract with GE Aviation option many operators have taken up in
the engine OEMs to raise/escalate their for the maintenance, repair and overhaul the current climate. Additional services
prices even in the middle of the current of 109 engines over the next decade. The provided by those such as MTU include
recession remains an open and regular OnPoint solution agreement represents spare engine support, dedicated spare
complaint of many airlines. This concern an investment of $2 million per CFM5- engine services, e.pool, engine condition
will grow as we move towards 2020. 6-7B engine, which power flydubai’s monitoring, engineering support such
Since 1995, OEMs have increased _e^^m h_ ;h^bg` 0,0&1))G@ Zbk\kZ_m' as fleet management, line replaceable
their share of the market by 30 percent- Some engines will have more than one ngbm!EKN"lniihkm%hg&lbm^lniihkmZg]
age points, primarily by taking work from shop visit, putting the total value of the customer training. Indeed, MTU’s Total
in-house supply, the proportion of which contract at more than $300 million. Engine Care package can include several
has dropped by 31 percentage points. Ghaith Al Ghaith, chief executive of Fly- MRO services besides core engine MRO.
Interestingly, the combined share held dubai, stated at the time: “Flydubai is A good MRO provider, no matter
by airline third parties and independents its background, will operate on a phi-
remains almost unchanged at 33–34%. losophy to repair engine parts wherever
As a result of this change in purchas- o$WWKH3DULV$LU6KRZ possible. Component repair capabilities
ing behaviour by airlines, the ‘available’ IO\GXEDLWKHZRUOGnVIDVWHVW should in this day and age range from
or outsourced market has grown at just standard manual repairs and OEM
over 10% per annum over this period, to
JURZLQJVWDUWXSDLUOLQH licensed repairs to the company’s inde-
more than $12 billion in 2011. This out- VLJQHGDFRQWUDFWZLWK*( pendent bespoke repair solutions.
sourcing trend will probably continue,
$YLDWLRQIRUWKHPDLQWHQDQFH
albeit not at such a fast rate. There are Advice to operators who have yet to
three reasons for this. First, as airlines UHSDLUDQGRYHUKDXORI select an engine MRO provider:
receive new aircraft, the associated new HQJLQHVRYHUWKHQH[WGHFDGHp Rely on a strong engine MRO provider
engines are becoming increasingly reli- with significant experience, one that can
able and the cost to establish overhaul best assess the optimum time for a cost-
capability is getting higher. This makea constantly looking for the best services ^û^\mbo^lahioblbmZg]Zohb]bg\nkkbg`
the business case for in-house capability and partners to ensure our fleet remains any risks.
difficult to justify. Second, airlines today in the best condition to safeguard our @^mhû^kl_khfoZkbhnlikhob]^klZg]
are focusing more on their core business operational obligations and safety of our compare cost carefully, so as not to fall
of flying passengers, and engine main- passengers and crew. We have one of the for the expensive ‘quick fix’. In general,
tenance to most airlines is non-core. newest fleets in the industry and signing it might be worthwhile sending engines
Third, a viable supply base exists for this agreement will ensure our engines to a few providers on a time and material
many engine types, so airlines can and continue to perform at peak levels.” basis to get a feeling for which provider
should leverage this opportunity. This agreement is just one recent hû^kl ma^ [^lm oZen^&_hk&fhg^r FKH
GE Aviation’s OnPoint long-term example of prolific OEM incursion into and turnaround time.
maintenance and material solutions the engine aftermarket. Their success Especially for the newer engines, it
include overhaul, on-wing support, new can be attributed to agreements made at might be better not to sign a long-term
and used serviceable parts, component the time of selling an engine and pricing fly-by-hour contract now as component
repair, technology upgrades, engine benefits at that time that erase much of repair options continue to increase, and
leasing, and integrated systems with the aftermarket cost or the initial pur- operators might find out later they have
support and diagnostics. The OnPoint chase cost, whichever way you look at it. been overpaying.
portfolio includes the ClearCore engine Many independent MROs benefit Generally speaking, operators should
wash and effluent-collection system. from a strong customer focus, reflected pay careful attention to contractual
Engine washing is an established in their flexible solutions such as power- inclusions/exclusions to avoid cost sur-
technique for helping reduce fuel con- [r&ma^&ahnk !I[A" ]^Zel _hk lfZee^k prises down the road.
sumption and carbon footprint. GE has fleets and customised work-scoping. As Arrange for shop-visit staggering and/
stated that ClearCore is distinguished p^eeZlmkZ]bmbhgZeI[A\hgmkZ\ml%ng]^k or spare engine solutions a long time
by its effluent-collection system, with a which the customer pays a monthly flat ahead or select an MRO provider that
positive connection to capture almost rate per engine hour flown, with pay- hû^klmhmZd^h_liZk^^g`bg^lniihkm'

24 Airline Economics: MRO Global 2011 www.airlineeconomics.co

www.airlineeconomics.co Airline Economics: MRO Global 2011 25
ENGINES

CFM56-7B engine support

CFM International’s parent companies OEM parts repair solutions, designated used to service the engine must be con-
GE and Snecma used digital product tools, engineering representative repairs devel- sistent with CFM requirements for that
specifically Catia, to develop the CFM5- oped by the company and approved and engine model. In addition, all mainte-
6-7B engine, making it the first engine to certified by the airworthiness authorities, nance must comply with CFM-issued
be developed using a full digital mock-up and a strong customer focus. MTU is the engine manuals and other maintenance
at all engine and installation levels. Targets largest independent provider of commer- recommendations. The qualification data
included maintenance costs lower than cial engine MRO services both overall is obtained through a combination of fleet
those for the CFM56-3, which powers and for the CFM56 product range, and operational and maintenance records.
the 737 Classics, along with higher thrust more specifically the CFM56-7. In recent Commercial jet engines typically are in
and improved efficiency. The result of years its market share on the CFM56-7 service for more than 25 years and change
optimising accessibility and removal and has fluctuated around 10%, depending on ownership at least once in their opera-
installation envelopes is a claimed reduc- customer demand. The company added tional life. The engine’s configuration,
mbhgh_nimh1)bgEKNk^fhoZeZg] the CFM56 to its MRO portfolio in 1999 material content, maintenance history
replacement times, and an online engine and has accumulated extensive experi- and supportability impact overall value
replacement time of less than four hours. ence, particularly on the CFM56-3 and as it changes ownership.
The CFM56’s massive global popular- -7, and has several CFM56-7 customers The TRUEngine designation also
ity has fostered a correspondingly large with mature fleets under exclusive agree- facilitates CFM’s ability to provide tech-
number of maintenance facilities and a ments. Overhauls of the -7 are carried out nical support. CFM’s engine support is
highly competitive market. There are 21 at MTU Maintenance Zhuhai in China as built upon technical expertise for genu-
providers serving the market with as many p^eeZlZmFMNFZbgm^gZg\^AZggho^k% ine CFM56 parts and configurations, as
as 34 MRO shops, and at the same time and the company has sufficient capacity well as data gained from the vast opera-
there is a limited number of large airlines to absorb short-term demand for engine tional history of the global CFM56 engine
and a plethora of small- to medium-sized MRO as well as increased demand for population. The original manufacturers
operators with no dedicated engine MRO CFM56-7 in the years to come. Both facil- argue that by changing one or more parts
provider. There is also only a handful of bmb^lZk^_neer^jnbii^]Zg]AZggho^kaZl manufacturer approval (PMA) parts in the
providers with significant experience on a flow-line for inducting engines, mean- engine for cheaper versions – at least when
the CFM56-7, and only such providers ing any engine type can be inducted at initially purchased – might result in reli-
can guarantee no surprises in terms of any time, no matter which type. And new ability issues, not to mention the possibility
slot availability, turnaround time, qual- additional test cells have become opera- the asset might realise considerably less
ity and final cost. Further, there are not as tional over the past few years. financial return when it is eventually sold.
many CFM56-7 spare engines available CFM’s TRUEngine programme, They are also concerned that the modifi-
as there were in the past for other engine eZng\a^] bg fb]&+))1% aZl [^^g p^ee cation of engines they design and build,
types, and it is critical operators without received by customers worldwide. CFM beyond the type-certified configuration,
their own spares find an adequate source launched the programme to help the reduces their ability to provide technical
for spares during their shop visits, either industry more accurately appraise used support. These concerns resulted in the
directly with the MRO shop or from an CFM56 engines and to enhance the resale FAA’s Aircraft Certification Service issu-
engine lease company. This has been an value of the same. To date, more than ing a Special Airworthiness Information
area of intense competition lately. 5,000 CFM56 engines in service with ;nee^mbg bg :n`nlm +))1 Ze^kmbg` hpg-
Support for the CFM56 is a major more than 40 operators around the globe ers, operators, and certificated repair and
contributor to revenues at GE Aviation have been granted TRUEngine status. maintenance providers of the responsi-
Services. Moreover, the company points CFM says it developed the TRUEngine bilities of type and production certificate
out, only 40% of the combined GE and programme in response to industry holders, supplemental type certificate
CFM installed fleet have had their first demand for better ways to determine the holders and the PMA holders to support
shop visit, and the revenue generated from value of engines as they are redistributed the continued operational safety of their
servicing them through their 30+year in aircraft fleets. The programme allows product or part design.
operating life can approach seven times companies to more easily evaluate used When CFM was designing the -7B
the revenue from the original engine sale. CFM56 engines by serial number, based engine, now used exclusively on 737NGs,
Service activity on CFM56-7B engines is on data not widely accessible. The TRU- future maintenance was one of the major
growing at an annual rate of about 15%, Engine designation is available to all contributing factors considered by the
so it is not surprising that all quarters are CFM56 engines meeting the criteria, and engineers. Use of the latest digital product
fighting hard for this business. several fleets of engines are being evalu- definition tools at all stages of the engine’s
Of the independent engine service ated. To qualify for TRUEngine status, design helped to reduce definition cycle
providers perhaps the best known is MTU the engine configuration, engine over- time and the first -7B engines came to pro-
Maintenance. Its expertise covers non- haul practices, spare parts and repairs duction faster than had been done in the

26 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ENGINES

o,WVKLJKWHFK&DWLDDLGHG
GHVLJQUHVXOWHGLQLPSURYHG
DFFHVVLELOLW\DVZHOODV
RSWLPLVHGUHPRYDODQG
LQVWDOODWLRQHQYHORSHVrZLWK
UHPDUNDEOHUHVXOWVp
industry before. Its high-tech Catia-aided
design resulted in improved accessibility
as well as optimised removal and installa-
tion envelopes – with remarkable results.
Ma^ k^ieZ\^f^gm mbf^l _hk EKNl aZo^
[^^gk^]n\^][rnimh1)!\hfiZk^]
with the CFM56-3 engine) while an entire
engine replacement can now be achieved
within four hours. CFM56 Tech Insertion,
which is the production configuration for
CFM56-7B and CFM56-5B engines, had
a highly successful entry into service in
2007 on both the 737NG and A320 fami-
lies. Over the engine’s lifecycle, CFM56
Tech Insertion could provide operators
with up to 1% better specific fuel con-
sumption, which translates to better
fuel burn, and with longer time on-wing
through an equivalent 15–20°C additional
exhaust gas temperature (EGT) margin. It
also gives 5–15% lower maintenance costs performance. In addition, it is improving is a more widely available product gener-
(depending on the thrust rating) through engine cooling techniques and reducing ally running over a longer term of three+
enhanced durability. The engine meets the parts count to achieve lower maintenance years. There is an agreed delivery and
International Civil Aviation Organisation costs. In 2010, the engine completed an redelivery condition and the lease term
(ICAO) Committee of Aviation Environ- extensive ground test programme, which is fixed. The airline pays for the engine
mental Protection’s standards (CAEP 6) included a gruelling 150-hour block test regardless of whether it is installed and
maZmmhhd^û^\mbg+))1'Ma^l^[^g^Õml and an almost 60-hour flight test pro- typically takes maintenance responsibil-
are achieved through improvements to gramme on GE Aviation’s modified flying ity during the lease term. Operating leases
the high-pressure compressor, the com- testbed. Zk^Zg^û^\mbo^lhenmbhgpa^k^^qi^\m^]
bustor, and the high- and low-pressure When an airline needs a replacement utilisation is high over a given period and
turbines. In addition to the compressor kit, engine fast CFM-subsidiary SES and the where an airline is not in a position to buy
<?FZelhhû^klZ_neeM^\aBgl^kmbhg\hk^ engine lessors come into the frame. SES is its own spares. Engine sales and exchange
upgrade, as well as high- and low-pres- the world’s largest CFM56 engine lessor. ZlZghma^kl^kob\^\Zghû^kbml\nlmhf^kl
sure turbine hardware, for the more than With a portfolio of more than 250 CFM56 a wide range of CFM56 assets for sale at
7,250 CFM56-5B and CFM56-7B engines engines and with offices and pool locations Zgr`bo^gmbf^'L>L%Zfhg`hma^kl%hû^kl
that were delivered before the production eh\Zm^] bg *, ]bû^k^gm \hngmkb^l phke]- an engine exchange programme whereby
shift in 2007. In April 2009, Boeing and wide - SES is positioned to deliver flexible an asset owner/operator may elect to swap
CFM together launched the new CFM56- Zg] \hlm ^û^\mbo^ <?F./ liZk^ ^g`bg^ out its unserviceable or older generation
7BE engine enhancement programme, solutions to CFM56 operators around the CFM56 engines with similar asset types
which will provide up to 4% lower main- globe. As the CFM56 in-service fleet con- that have greater on-wing life remaining
tenance costs, depending on the thrust tinues to grow, SES continues to adapt the with packages to suit specific customer
rating. This lower cost is achieved through size and mix of its engine pool to ensure requirements. Guaranteed availability is
a combination of longer time on-wing, that its customers have access to a com- another service: this service is unique to
improved durability, and a lower overall prehensive range of CFM56 spare engine SES and more commonly known as ‘GAF’.
parts count in the high- and low-pressure lhenmbhgl'Bm\nkk^gmerhû^klZgnf[^kh_ It is an insurance type product devised
turbines. CFM used advanced computer CFM56 engine lease options including: to protect airlines against the risk of
codes and three-dimensional design tech- Short-term lease where customers pay for an aircraft on ground. Engines are
niques to improve airfoils in the high- and the number of days they need and rede- made available for lease within 24 hours
low-pressure turbines to improve engine liver when finished. Operating lease: This of request.

www.airlineeconomics.co Airline Economics: MRO Global 2011 27

ENGINES

Rolls Royce TotalCare

The Rolls-Royce Total Care package is at the vanguard of OEMs’ march into
the aftermarket.

Rolls Royce remains at the vanguard flown. Against an agreed cost per flying Asset management delivers:
of original equipment manufacturer ahnk%MhmZe<Zk^hû^klma^hiihkmngbmrmh  Z \\^llhkr mkZglihkmZmbhg mh o^g]hk
aftermarket programmes. It has been remove uncertainties from engine man- repair station from line station and/or
prolific in its aftermarket agreements to agement and provides greater financial overhaul base;
such an extent that it almost completely confidence from managing predictable  k^mnkgmkZglihkmZmbhgh_k^iZbk^]hk
controls the aftermarket for its engines. \hlml'Ma^ikh`kZff^hû^klZlnbm^h_ new unit;
This programme has been highly suc- engine-support services including: pro-  mkZglihkmZmbhgh_^g`bg^[^mp^^gZbk-
cessful for airlines but at the same time active in-service engine management, line main base and engine overhaul
has been a burden for lessors. overhaul shop maintenance, and the facility for scheduled and unsched-
TotalCare is a flexible approach to collection and management of engine uled shop visits;
achieving an engine support service that data. Tailored to the customer’s individ-  ikhoblbhgh_liZk^^g`bg^lmh\ho^kZbk-
has the correct fit and scope of services ual needs, asset management optimises lines requirement: in case of aircraft
to meet the operator’s specific needs. It inventory requirements. Rolls-Royce on ground (AOG) due to engine reli-
provides a single-source solution for the can provide and manage all required ability; and for standard spare engine
lifetime of the engine, from the time the engine support equipment, including provision; and
engine is delivered to the customer until spare engines, engine accessories, line  ikhoblbhgh_iZkmlZg]k^\hff^g]Z-
it goes out of service. TotalCare is a total maintenance parts and tooling, remov- tion of stock levels.
support programme aligned to each cus- ing the supply chain management The line-support service provides special-
tomer’s operation and paid against hours burden from the airline. ist, non-routine engine line maintenance

28 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ENGINES

limited parts requiring repair/replace-

ment when the initial life prediction is not
met within the agreed term.
The planned shop visit service pro-
vides all restorative/refurbishment
(planned) shop visits throughout the
TotalCare term, enabling minimum
operational disruption and maximum
time on-wing. More specifically, this ser-
vice includes:
 ^g`bg^ho^kaZneieZggbg`%phkdl\hi-
ing and overhaul work;
 Zee^g`bg^lmkbieZ[hnk4
 fh]ne^k^phkdeZ[hnk4
 k^[nbe]Zg]m^lmeZ[hnk4
 k^ieZ\^f^gmfZm^kbZe4Zg]
 bg\hkihkZmbhg h_ Zee Ze^km Zg] k^\-
ommended service bulletins and
airworthiness directives throughout
the term.
L^kob\^lhû^k^]Zelhbg\en]^ngieZgg^]
hû&pbg` fZbgm^gZg\^% pab\a bg\en]^l
engine overhaul scheduling, work-
scoping and overhaul work in the case
of unscheduled engine-caused events.
Also included are the non-insurable costs
associated with shop visits caused by non-
negligent foreign object damage (FOD).
Accessory repair and overhaul service
is about the repair of specific accesso-
ries both in the shop and on-wing, and
management of the repair loop. Replen-
ishment material is supplied in the case
of no available repair.
>g`bg^ a^Zema fhgbmhkbg` !>AF"
helps to optimise operating costs and
ik^o^gml^kob\^]blknimbhg'Ab`a&jnZebmr
predictive support can highlight a main-
tenance requirement before a potential
o5ROOV5R\FHKDVEHHQSUROLILF operations centre, the unexpected is cen- event and can assist with maintenance
trally managed, providing a fast response shop load planning and spares scheduling.
LQLWVDIWHUPDUNHWDJUHHPHQWV with optimised solutions. At present, Optimised System & Solutions (OSyS)
WRVXFKDQH[WHQWWKDWLWDOPRVW this fully operational service is available blma^ikhob]^kh_ma^Kheel&Khr\^>AF
ZmAhg`Dhg`Zg]A^Zmakhp'BgAhg` service, providing trend monitoring of
FRPSOHWHO\FRQWUROVWKH Dhg`%Kheel&Khr\^aZlchbg^]_hk\^lpbma hg&pbg` ^g`bg^ i^k_hkfZg\^' >AF bl
DIWHUPDUNHWIRULWVHQJLQHVp bml^qblmbg`chbgmo^gmnk^iZkmg^kAZ^\h a state-of-the-art predictive health ser-
mhlniihkmmablbgbmbZmbo^Zg]ZmA^Zmakhp vice designed to minimise operational
activities, including: 24/7 coverage by the service is provided by an established disruptions and simplify data reporting
on-wing care airport service including Rolls-Royce line maintenance support practices translating data into valuable
service bulletin/airworthiness directive _Z\bebmr [Zl^] Zm AZmmhg <khll' Kheel& information, including: advance failure
incorporation resulting in reduced engine Royce is looking to enhance its on-wing prediction to avoid the cost of opera-
turnaround time. Qualified and equipped care global locations and will soon have tional disruption and engine repair;
maintenance engineers available at key Frankfurt, Singapore, Dallas and Newark b]^gmbÕ\Zmbhg h_ ^û^\mbo^ ebg^ fZbgm^-
airports for operators to use in the field fully operational. nance to increase time on-wing; and
(that is, fly-away teams to support in the Maintenance is controlled through engine margin forecasting to maximise
event of an AOG situation). Access to line jointly derived engine management plans on-wing life. This is over and above the
maintenance facilities (hospital shops) at and component management plans. A data handling and interpretation of ser-
key airports. Co-ordinated through the TotalCare agreement also covers any life vice to help save time.

www.airlineeconomics.co Airline Economics: MRO Global 2011 29

ENGINES

A promising start

Maurick Groeneveld, director of aircraft management at Doric Asset Finance, takes a look
at the Engine Alliance engine developed for the Airbus A380.

I
n 1996, Pratt & Whitney and Gen- 100 engines. Emirates continues to be the lb rated GP7200 engine is identified
eral Electric officially announced biggest GP7200 operator, followed by as GP7270 or the GP7270E (‘E’ stands
their joint venture, Engine Alli- :bk ?kZg\^ Zg] Dhk^Zg :bk% pab\a aZo^ for extended) and the 76,500 lb rated
ance, to produce and sell large smaller fleets. As with any growing fleet, GP7200 is identified as GP7277. The
engines for Boeing’s proposed flight hours and flight cycles are accru- GP7277 was aimed at the freighter ver-
0-0&.))Q(/))Q' Mabl ikh`kZff^ pZl ing rapidly – in June this year the fleet of lbhgh_ma^:,1)%pab\apZl\Zg\^ee^]'
cancelled, but Engine Alliance was then GP7200 engines passed 500,000 flight Another thrust rating to be added soon
selected to design and develop an engine hours and 70,000 flight cycles. It can be mhma^:,1)himbhg\ZmZeh`n^%mhZeehp
mhihp^k:bk[nlÌlikhihl^]:,QQ%pab\a estimated that the milestone of 1 million a slightly higher MTOW of the passen-
eZm^k[^\Zf^ma^:,1)'Ma^]^lb`gh_ma^ flight hours will be reached in the second `^ko^klbhgh_ma^:,1)%blma^@I0+0+%
engine is built around the designs of the half of 2012. The average flight duration with 72,000 lb thrust. All versions have
core of the GE90 and the fan and low- for the GP7200 engines is about seven ma^lZf^aZk]pZk^Zg]ma^]bû^k^g\^
pressure system of the PW4000: GP7200. flight hours. The average flight duration of bgmaknlmblZ\ab^o^]makhn`aZ]bû^k^gm
The first run of the GP7200 was in April the GP7200 engines is shorter than for the thrust rating plug. The GP7270 and the
2004 and the first flight with a GP7200- Rolls Royce Trent 900 engines, which are GP7270E have exactly the same thrust
ihp^k^] :,1) pZl bg :n`nlm +))/' Zelhihp^kbg`ZiZkmh_ma^:,1)Ö^^m'Mabl rating of 70,000 lb, but the GP7270E
Although the GP7200 is certified for up to is the result of Emirates using a number of has a higher flat rating temperature at
77,000 lb thrust, only the 70,000 lb thrust bml:,1)lhgÖb`amlmaZmZk^ghmlhehg`' mZd^&hû ihp^k !BL: $ ++'+ ™< _hk ma^
o^klbhgblbgnl^[rma^]bû^k^gmZbkebg^l' The ‘high-time’ engines have about 1,500 GP7277E versus ISA + 15°C for the
flight cycles and about 12,000 flight hours. GP7270), which means the aircraft has
FLEET increased thrust available in hot day
With a growing fleet of presently about THRUST RATINGS conditions and the GP7270E provides
+. @I0+))&ihp^k^] :,1)l bg l^kob\^% There are three thrust versions for the ma^ mZd^&hû i^k_hkfZg\^ \ZiZ[bebmr h_
the number of installed GP7200s is about GP7200 engines available. The 70,000 the GP7277. On the aircraft side, the

30 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ENGINES

GP7270E requires the thrust enhance- GP7200 ENGINE CHARACTERISTICS

ment kit modification to be embodied.
Fan Single stage with 24 swept wide-chord hollow
titanium blades
OPERATIONAL EXPERIENCE
Based on information available to Doric, Low-pressure compressor Five stages
the GP7200’s performance retention (up High-pressure compressor Nine stages
to now) looks very satisfactory and the
exhaust gas temperature (EGT) deterio- Combustor Annular combustion chamber
ration is presently not a contributor to
engine removals. As the EGT margin of High-pressure turbine Two stages (cooled)
new GP7200 engines is significant and Low-pressure turbine Six stages (uncooled)
the deterioration not very high, it can be Fan diameter (inches) 116.7
expected that removals for EGT margin
– if being a removal reason – will only Length (inches) 187.1
start to occur around 2,500 to 3,000 Dry weight (lb) 14,800
Öb`am\r\e^l_hkÕklm&kng^g`bg^l'Ahp-
ever, due to the lower EGT margins of for around 3,000 engine cycles (for hi^kZmbhgbg:n`nlm+))1'Ma^lahioblbml
the GP7270E engines compared with the first-run engines). The engine’s first typically involved repairs and modifica-
‘standard’ GP7270 engines, the GP7270E refurbishment is likely to feature light tions, and the extent of the work was light.
engines will reach their removals for EGT maintenance of all modules, except for Based on the number of GP7200-powered
margin slightly earlier. the combustor and the high-pressure :,1)lbgl^kob\^Zg]hghk]^k%ma^ZggnZe
turbine, which will undergo heavy number of GP7200 shop visits is expected
TECHNICAL ISSUES maintenance. Thereafter, a second run to increase significantly from about 10 a
There have not been any Airworthiness of about 2,000 to 2,500 engine cycles year now to about 100 a year towards the
Directives issued against the GP7200 is likely to follow. The engine’s second end of this decade. At the moment, all
engines. It is somewhat difficult, due to refurbishment would be more exten- GP7200 engine shop visits are performed
the youth of the GP7200 engines, to make sive than the first and also feature heavy in GE Wales, which is the only MRO shop
general remarks and draw conclusions, fZbgm^gZg\^ h_ ma^ AI<% ma^ mnk[bg^ _hk ma^ @I0+))' Ahp^o^k% :bk ?kZg\^
but in managing the GP7200 engines, centre frame, the low-pressure turbine Industries is gearing up its extensive
Doric has come across the following more and the turbine exit case. engine maintenance facilities to perform
significant issues: Ebd^ma^@>2)%ma^@I0+))\Zg[^liebm GP7200 shop visits. It expects to perform
 Ab`a hbe \hglnfimbhg3 ma^k^ aZo^ in the propulsor and the fan module to ease the first GP7200 shop visit during winter
been some premature engine remov- transportation for shop visits. Obviously, 2013/2014 and have full overhaul and
als due to excessive oil consumption. from an engine management perspective, repair capability for the GP7200 by winter
The root cause seems to be linked with this requires additional tracking of the fan +)*.(+)*/%Zg]bmblhû^kbg`bmll^kob\^lmh
premature and increased wear of the modules and propulsors. Air France and other operators. Emirates
#5 carbon seal, which results in a loss Engineering is also gearing up its engine
of oil through the seal. A product LIFE-LIMITED PARTS MANAGEMENT maintenance facilities from changing
improvement plan is in place. The life-limited parts in the GP7200 modules on the GP7200s as of today and it
 Ab`a&ik^llnk^\hfik^llhk!AI<"+&. engines have a target life of 15,000 cycles. plans to perform GP7200 shop visits from
spool upgrade: engines with a par- Ahp^o^k%Zmik^l^gm%ZeZk`^ihkmbhgh_ma^ late 2014. Another MRO shop prepar-
mb\neZkiZkmgnf[^k_hkma^AI<+&. life-limited parts has certified life limits ing for GP7200 shop visits is Abu Dhabi
lihheaZo^[^^gZû^\m^][rik^fZmnk^ p^ee[^ehp*.%)))\r\e^l'Ma^AI<+&. Aircraft Technologies, which plans to be
removals as, due to higher-than- spool has the lowest life limit (4,200 able to handle GP7200s by 2013. All the
normal seal rub (as a result of the cycles) and other life-limited parts have MROs are part of the Engine Alliance
manufacturing process), the life limit limits at various levels in between. This MRO network.
of these parts was reduced to 2,100 eb_^ebfbmh_ma^AI<+&.lihhef^Zglma^
cycles. As a result, Engine Alliance engine’s first refurbishment is not caus- SMOOTH ENTRY
initiated a replacement programme ing a premature first refurbishment of the Although the experience with the
_hkAI<+&.lihhelpbmaZg^p]^lb`g engine. Simultaneously, Engine Alliance GP7200 is limited, the GP7200 engines
part that has a life limit of 4,200 is working on extending the life limits of have shown a smooth entry into service
cycles. This replacement and upgrade those parts that have a lower limit. pbmama^]bû^k^gmhi^kZmhkllh_Zk'Ebd^
programme has been completed on any other engine, it features some issues,
ma^Zû^\m^]^g`bg^l' SUPPORT but Engine Alliance either has a solution
Up to now, the number of GP7200 shop in place or is working on it. The perfor-
SHOP VISITS visits has been limited and only 20 shop mance demonstrated by the GP7200
It seems possible the GP7200 engines visits have occurred since the GP7200 engine also suggests this engine will live
would be able to remain on-wing engines commenced their commercial up to its promise.

www.airlineeconomics.co Airline Economics: MRO Global 2011 31

SMOKE AND MIRRORS

Smoke & Mirrors

A bitter feud, a possible future legal battle, misleading quotes and credit barriers – the PMA debate has it all. The PMA market
has a small slice of the overall parts market but enormous potential for growth yet doors are closing. 3KLOLS7R]HU3HQQLQJWRQ
explores the current state of the PMA market and the threats to its survival.

A
s owners and operators erosion of public confidence. o7KHUHLVILHUFHFRPSHWLWLRQ
of commercial aircraft The parts market is split into three
struggle to stay com- main sections: OEM, FAA Parts Manu- EHWZHHQWKH2(0V LQFOXGLQJ
petitive in today’s global facturer Approval (PMA) parts and WKHLUUHYHQXHULVNVKDULQJ
economic environment, approved repairs, or DER. [DER stands
using cheaper, yet safe, for parts that are approved by a US
VXSSOLHUV DQGWKHLQGHSHQGHQW
aircraft parts, and contracting out main- Federal Aviation Administration (FAA) DIWHUPDUNHWSDUWVSURYLGHUVRI
tenance to both domestic and overseas Designated Engineering Representa-
providers, can make all the difference. tive but for the purpose of this article
UHSDLUVp
But there are consequences to such a “DER” repairs also relates to Euro-
strategy: significantly the doubt that pean Aviation Safety Agency (EASA) holders and PMA holders need to have
has been cast on the integrity of parts approved repairs. their parts, repairs, and alterations to
and services no provider by the original Owners and operators of commercial be accepted globally because they are
equipment manufacturer (OEM). Those aircraft need PMA developed parts and marketing their products and services
consequences include higher insurance DER repairs accepted globally as read- to a global customer base.
costs, lost warranties, liability concerns, ily as OEM parts and repairs. Similarly However, there is fierce competition
lower aircraft resale values, and an DER repair and alteration approval between the OEMs (including their

32 Airline Economics: MRO Global 2011 www.airlineeconomics.com

 SMOKE AND MIRRORS

For example, a major OEM that guidelines are particularly relevant for
owns over 25 repair stations worldwide dominant firms or firms with market
is repairing and fabricating parts and power. When Airline Economics looked
applying for supplemental type certifi- at the guidelines it was clear that the
cates (STCs) and PMAs. GE for example OEMs are sailing very close to the wind
owns an estimated 20 repair stations and, as they expand so too they increase
worldwide and also owns a major air- the risk of catching the eye of the regula-
craft leasing company (GECAS). Some tors. On current form it is only a matter
engine OEMs also lease engines on a of time.
power-by-the-hour basis. Consequently, PMA parts offer savings of up to 40%
the OEMs are increasingly gaining full
control over what parts, repairs and o7KH2(0VKDYHEHHQILJKWLQJ
alterations go into either aircraft they
own, or for which they offer warranties WRFXUEWKHJURZWKRIWKH30$
and maintenance services. PDUNHWKRZHYHU$QGKDYH
It has been reported that OEMs are
cutting back or eliminating customer EHHQEDFNHGLQWKHLUFDPSDLJQ
product support if the owner/opera- E\WKHYDULRXVQDWLRQDO([SRUW
tor incorporates non-OEM developed
repairs, alterations or replacement
&UHGLW$JHQFLHVp
parts in their aircraft. OEMs have also
acquired independent companies that against parts from OEMs. The market
held PMAs or had developed their own for PMA showed a 7% growth rate in
repairs and alterations. Once an OEM 2010 and is expected to top that in 2011
acquires an aftermarket company, the as airlines scramble to cut costs. The
repairs and parts which they had pre- PMA market has continued to grow
viously complained about suddenly even though the aircraft lessors, that
became acceptable. don’t accept non-OEM parts for the
As a consequence of all of these most part on their aircraft, account
factors, the OEMs and the leasing for over 40% of all commercial aircraft
companies and repair stations they in operation, which is set to increase
own, are putting pressure on owners/ above 50% at any time. Given such dom-
operators not to use non-OEM parts inance, one would expect the market for
or unapproved repairs through plac- PMA to be shrinking but it has not. That
ing restrictions on customer support said, although PMA penetration in the
services, warranties, the use of Instruc- Americas is prolific, in Europe, with the
tions for Continued Airworthiness, etc. exception of Lufthansa and British Air-
The OEMs have formed a loop around ways, the market is more restrained.
the aftermarket and are cornering the The OEMs have been fighting to curb
same at alarming speed. the growth of the PMA market, however.
revenue/risk-sharing suppliers) and When Airline Economics spoke to And have been backed in their campaign
the independent aftermarket parts the Directorate General for Compe- by the various national Export Credit
providers of repairs, alterations and tition at the European Commission, Agencies (ECAs) that support the
fabricated replacement parts and concern was expressed over the poten- OEMs in their respective countries.
other maintenance services. Also many tial stifling of competition. However, Just a few years ago the OEMs con-
owners and operators that provide because the OEMs are not proven to be trolled 15% of the aftermarket but they
maintenance services, or have entered acting in collaboration, the issue is not now control around 45%. If current
into partnerships with non-Type certifi- at this time seen as a problem. Never- trends continue, the OEM s will control
cate/production certificate holders to theless, owners and operators do have more than 60% by the end of this decade
develop repairs and fabricate replace- the power to force an investigation in and around 75% of the engine specific
ment parts, are further crowding the the state of the aviaition aftermarket. aftermarket, mirroring the automobile
market. As the major OEMs diversify The Directorate General for Com- market in many ways. This represents
into maintenance, aftermarket parts petition, after some consideration, did both the success of the OEMs growth
supply, and leasing, they are also vying point to new vertical restraints rules strategies in a tough market but also
for a share of the very market that they and guidelines that were adopted and an erosion of choice for the airlines and
are criticizing, while at the same time published in Spring 2010 that cover all aircraft and engine lessors in the longer
lobbying for policy changes in their kinds of supply, purchase or distribu- term. Once that choice has gone, for
favour. tion agreements in all sectors. The some areas of the aircraft and engine

www.airlineeconomics.com Airline Economics: MRO Global 2011 33

SMOKE AND MIRRORS

market, it will be gone forever. slow to see the benefits of aftermarket cheap copy of their original parts. They
Now is the time to sit up and take sales, until the 1980s there was little say their OEM made parts are superior
notice of how the OEMs are extending competition for their aircraft/engines because they have gone through a rig-
their market share and examine the and parts so they had no need to get orous R&D and testing processes. This
impact this will have on the aftermar- involved with maintenance or did not has led to the generally-held percep-
ket landscape. need to lock in customers at the point tion that PMA or DER parts devalue
It is the very success of PMA parts of sale. Today, however, there are many the value of an aircraft or engine. But
manufacturers and approved repaired aircraft and engine manufacturers in the real clincher for putting airlines off
parts (DER) that has led to the OEMs the market and as purchase prices fall the use of non-OEM parts is the repu-
adopting such aggressive strategies to through increased competition on one tational risk impact should one of their
protect and increase their share of the side, PMA parts manufacturers have aircraft or engines to fail and cause
aftermarket. entered the market on the other forc- fatalities, and that failure were traced
ing the OEMs to react to the erosion back to non-OEM parts.
o$OORIWKLVLVJRRGFRPSHWLWLRQ of their now essential aftermarket rev- “The reason many airlines don’t
enue stream. use PMA or DER parts is not because
%XWLI30$SDUWVDUHDVJRRG In 2011 an aircraft or engine manu- they are seen as inherently unsafe or
DVLIQRWEHWWHUWKDQWKH facturer cannot make a return on an unreliable, but for the concern over
aircraft program without aftermar- reputational risk,” says Sharp. “One
RULJLQDO2(0SDUWWKDQNVWR ket sales/agreements; in fact in some well-known airline CEO said to me: “If
UHYHUVHHQJLQHHULQJZKLOH recent cases all of the profit is tied-up one of my airplanes crashed and people
in the aftermarket. The problem for died and the cause of the accident was
DOVREHLQJPXFKFKHDSHU
the OEMs was that they did not have traced back to PMA or DER, can you
ZK\KDVWKH30$VHFWRU the expertise to maintain aircraft. Dur- imagine what sport the tabloids would
QRWDFKLHYHGWRWDOPDUNHW ing the 1990s and the last decade the have? ‘Airline X uses dodgy parts’ - peo-
OEMs moved to change this by copy- ple would stop flying with us tomorrow.
GRPLQDQFHp ing the automobile market template of And for that reason I will not accept
approved repair shops. The benefit for PMA/DER.”
“It is because of the growth of PMA the maintenance shop was guaranteed Fear of any potential reputational
and DER that the OEMs have adopted business, while the OEMs benefited damage has never stopped British
strategies to try to exclude PMA and from up-selling these extra services at Airways, who is under the spotlight of
DER,” says Jon Sharp, president and the point of sale as standard. the most vicious domestic press on the
chief executive of engine lessor ELFC. What the OEMs did not expect was planet, from using PMA parts. BA, as
“The OEMs spend a huge amount of the infiltration of the PMA market into well as Lufthansa, United and ANA,
money on developing new engines, essential areas of the aircraft/engine. to name but a few, use PMA parts and
which they then sell at a loss and only The OEMs believed that there was approved repairs on the aircraft they
make money from spare parts sales over always a line that would not be crossed own, which has directly improved their
the years. The intervention of PMA and and also believed they could get away bottom line with no adverse affects
DER impacts their aftermarket profit with 5% per annum price increases. whatsoever. In fact some senior airline
opportunities so they are developing However, the monopoly was broken board members spoken to by Airline
ways to curtail this including develop- by engineering companies in the 1980s Economics have expressed dismay
ing strategies to attract MRO business that answered the need for airlines to that more airlines, especially within the
to their own workshops. They have been save money, leading to rapid PMA infil- EU and Asia-Pacific regions, are not
spectacularly successful at doing so. In tration into most areas of an aircraft making more use of PMA and approved
1999 around 15% of the engine MRO and/or engine. repairs. British Airways has been using
market went to the OEMs, by 2009 that All of this is good competition. But if PMA parts as standard since 2006
had grown to 45%. For some of the new PMA parts are as good as, if not better, when a total of 28 new PMA parts were
engines types, 100% of the fleets are than the original OEM part thanks to approved. In 2007, when BA entered into
on OEM care packages. That situation reverse engineering, while also being a deal with HEICO after watching Luf-
presents a lot of problems for those of us much cheaper: why has the PMA sector thansa take the lead, a spokesperson
in the leasing business.” not achieved total market dominance for the airline stated: “We will no longer
There is an argument, often used by over the past three decades? be the cash machine for OEMs… These
financiers, that the aviation aftermarket The answer lies in a clever smoke and are not bogus parts but approved by the
is running at least a decade behind the mirrors campaign waged by the OEMs very same regulatory authorities that
automobile market, therefore it is often in the way PMA and repaired parts are approve OEM aircraft parts. BA reviews
used as a means to predict the future of perceived by the market. The engine all applicable PMA parts and approves
the aviation aftermarket. This is not the OEMs have, from the beginning of the each one on a case-by-case basis. Once
whole story however. It is not that air- PMA threat to aftermarket sales, been installed, the parts are monitored for
craft and engine manufacturers were talking up the fact that a PMA part is a any defect trends and we note failure

34 Airline Economics: MRO Global 2011 www.airlineeconomics.com

SMOKE AND MIRRORS

agreement and every lessor I have ever

heard of excludes PMA and DER in their
leases. That does not mean to say that
on return of an aircraft or engine, there
will be no PMA or DER parts in there,
indeed it is often the case, the airline
will simply ask the lessor to be excused.
In the case of an aircraft, if the PMA or
DER parts concerns things like seats or
cabin interiors, it probably doesn’t mat-
ter because those are likely going to
get ripped out and reconfigured for the
next airline lessee. Does having certain
non-critical components exterior to the
engine, certainly within the gas path,
[being fitted with PMA or DER parts]
really matter? Probably not. However,
and herein lies the rub, it is not the les-
sor who originally says they are not
having PMA or DER, it is their custom-
ers, which in turn causes the lessor to
say they cannot accept PMA or DER.”
He adds: “We have between 50 and 60
remarketing events a year and if 50% of
those potential customers won’t accept
PMA or DER that reduces my market
by 50%, which I cannot accept.”
modes of PMA parts to check that they does PMAs for replacing GE parts and The reaction of the OEMs to the use of
are similar, if not the same, as their GE returns the favour. The fundamen- PMA/DER parts has been to shockingly
OEM equivalent”. tal argument is that if dually authorised abuse their dominant market position.
It should be noted, however, that BA and approved, a PMA part is considered It has been widely reported that OEMs
only uses non-critical PMA parts. Even to be equally as airworthy as the OEM tell operators they are on their own
so, the UK flag carrier still achieved part. They are supposed to be.” when they call in with a problem on
between 30-40% savings over OEM list Moreover of all the airworthiness an engine that has any PMA/approved
prices after focusing on high-cost items. directives (ADs) issued since the early repairs parts. This action has been open
United and ANA use PMA parts to their 1990s, out of 290 directives, only three and widely publicised so it is a wonder
fullest extent and achieve significant have included PMA parts, parts that at that no one has been in court over this
bottom line benefits without downside. the time so closely matched the OEM issue to date. The view from the OEMs
The argument that OEM parts are original that they carried over the same is that if a failed part was a PMA part,
somehow better has long since been problems that caused the ADs. then they shouldn’t be held responsible.
defunct and the majority of the market “Back in the days when I was con- When an OEM part fails they will take
realises that many PMA parts, although fronted with the argument that a PMA responsibility for those parts and would
cheaper, benefit from improvements part or an independently developed investigate but if a PMA part has been
on the original OEM design through repair that was not the OEMs was an fitted anywhere they shouldn’t have to
reverse engineering. This argument inferior part, I have to say that in fact spend time and resource dealing with
was helped along eventually by the it is equally as authorised,” says Aldo the issue.
OEMs themselves. Prario. “As a matter of fact there is a his- In one particular engine failure that
“The parts that are approved under tory of parts that have been AD’d that is being investigated by the National
PMA are considered by the FAA to be are OEM parts and I don’t know of any Transport Safety Board (NTSB), the
equally as airworthy as those that are PMA parts that have been deemed to OEM concerned is claiming that it
made by the OEM,” says Aldo Prario, be independently identified as a non-air shouldn’t be held responsible and that
an FAA registered DER representa- worthy part.” the authorities should be speaking to
tive. “There has strong objection by the Alas the “what if ” argument remains the PMA manufacturer. The OEM takes
OEM for obvious reason to consider a primary reason for airlines refusing it even further to say that even if it was
PMA parts to be inferior. But since then, to use PMA parts. Ultimately though, an OEM part that failed, if there were
driven by economic considerations I airlines blame lessors for holding them any PMA parts in the engine, because
am sure, both Pratt & Whitney and GE back from using PMA more freely. those PMA parts are not tested within a
make one another’s PMA parts. P&W ELFC’s Sharp says: “Every lease whole engine, it could have had a mate-

36 Airline Economics: MRO Global 2011 www.airlineeconomics.com

 SMOKE AND MIRRORS

The FAA on liability concerns and the OEM argument

The type certificate holders and the production certificate holders [classified here together as the OEMs for ease] and owners/operators are concerned
about the liability that a failure of an aftermarket part may affect their credibility and incur substantial costs. The OEMs are claiming that with non-TC/
PC holder approved parts (PMAs) and repairs (DERs) in the product that their ability to fulfil their Continued Operational Safety (COS) responsibility is
compromised. OEMs continue to call the product, “their product” and cite the fact the data plate required by 14 CFR 45, Identification and Registration
Marking, identifies them as the manufacturer when in fact there are replacement parts in the product that were produced by other entities. That has been
the situation for decades but now OEMs are contesting that long standing reality. The OEMs forget that the product is not “their product.” It belongs to the
owner/operator who is ultimately responsible for the airworthiness of the aircraft. The OEM is only responsible for the parts they design and manufacture
just as any aftermarket maintenance or replacement part provider is responsible only for the work they perform (including repairs) and the design and
fabrication of parts they provide. The fact that there are aftermarket parts, repairs and owner produced parts in an aircraft only means, as has always been
the case, that any accident/incident investigations must be a cooperative effort of all the affected design, production, operations, and maintenance provider
stakeholders.

Another aspect to this argument is that the OEMs want parts that are fabricated during maintenance and parts with extensive repairs and alterations
to not be marked [or re-marked] with the original OEM part numbers. They also noted that the traceability of PMA parts is often questionable because
aftermarket companies do not have tracking systems that are as comprehensive as theirs. The FAA concluded this is likely to be true in most cases. There
is no regulatory basis that requires marking of any parts other than parts subject to an Airworthiness Limitation (14 CFR 45.14), PMA parts (14 CFR 45.15)
and TSO parts or articles (14 CFR 21 Subpart O). Also, there is no requirement for manufacturers and fabricators of parts to track them or to have a tracking
system. The owner/operator is responsible for their aircraft configuration management, conformity, airworthiness, and records management to ensure
that airworthiness limitations are adhered to, ADs are accomplished, maintenance records are kept per the CFR, and the aircraft configuration conforms to
its approved design. The fact that the OEMs support the owners/operators in fulfilling some of those responsibilities is often misrepresented as the OEM
being responsible. The FAA says that they are aware of and are sensitive to the OEM’s liability concerns.

In today’s highly litigious world, anyone associated with an aircraft involved in an accident/incident regardless of their culpability could be forced to
share in a legal settlement. As a result some OEMs have recommended that the product data plate listing them as the manufacturer should be removed
from aircraft and engines that include a substantial number of non-TC/PC holder repairs, alterations and replacement parts because they claim that the
product no longer conforms to their type certificate design. The FAA disagrees with that proposal for both practical and regulatory reasons. There is a
subtle point to remember that the OEM owns the original type “design” but not the “product” once it is produced and leaves their quality control system.
Once in service, aircraft configurations very quickly diverge from the pure OEM/Type Certificate holder’s type design configuration due to maintenance
and alterations that are performed. Thus it is currently the case that if an engine fails and the failure is traced to a single part, then it is that part which is to
blame and therefore the burden of responsibility will fall upon that particular manufacturer. It is in the process in getting to the point of knowing which part
is to blame that is currently a grey area and might just end in court action at some point if a resolution is not found.

It is also noteworthy to point out that in most investigations, the owner/operator, who is ultimately responsible for ensuring the aircraft’s airworthiness, is
rarely involved except for major accidents. In the past owners/operators and the FAA have expected the OEMs to investigate service events and accidents.
In today’s environment when owners/operators are using a higher percentage of repairs, alterations and replacement parts that were not developed by the
OEM, the owners/operators need to become more active in leading investigations and engaging the responsible PMA companies (non-TC/PC holders)
/ repair shops when aftermarket repairs and parts are involved. It could be argued that the OEMs are in some cases being deliberately belligerent and
are scaring operators away from PMA parts through non cooperation in the event of a problem. This is of course a very poor show on the part of some
OEMs.

At this point it should be mentioned that some OEMs such as Boeing have been actively partnering with PMA companies to deliver safe and effective
replacement parts to market. Boeing issues technical assistance letters and enters into license agreements with PMA companies to support acquisition
of PMAs. Under the licensing agreements Boeing is at an arms-length relationship in which Boeing licenses approved data, but the PMA holder remains
responsible for their own manufacturing quality, and Boeing will not provide production oversight to a licensee except to the extent that the licensee is also
a supplier subject to Boeing’s normal supplier oversight protocols. Boeing has issued many licensing agreements, although an ongoing internal debate
has temporarily halted the issue of new license agreements.

rial affect on the OEM parts and cause to pay a sum of money to the MRO shop repairing any collateral damage not
a failure. If an airline has any PMA parts to repair their engines. It states that if covered in most cases, but the MRO
in the critical areas of the engine, they one of the parts it repaired fails, it will he agency wants the airline to indemnify it
are on their own in the view of OEMs. liability language in MRO contracts is against claims from third parties.
The liability language in MRO con- also a big obstacle for the acceptability “This is something else in the indus-
tracts is also a big obstacle for the of PMA and DER parts. In a standard try which is plain wrong and I think it
expansion of the use of PMA and DER MRO contract, it states that if one of the has to be changed,” says Sharp. “Until
parts. In a standard MRO contract, in parts fails, the MRO agencywill replace such time that changes are made to that
the liability section, the airline agrees it, and that’s it. Not only is the cost of contractual language and the stance

www.airlineeconomics.com Airline Economics: MRO Global 2011 37

SMOKE AND MIRRORS

regarding exclusion of liability, and

indemnity, then airlines are not going to
accept PMA or DER. And the insurance
companies behind them aren’t either.
There has to be a change to make these
parts more acceptable and I think that
change needs to be in the liability lan-
guage.”
It has been widely put out into the
market that insurance on parts and
engines that are fitted in is compro-
mised by the use of PMA parts. Airline
Economics has not been able to find any
evidence of this at the time of going to
press. But the FAA approval process
for PMA equipment and approved DER
repairs requires rigorous development,
reporting and test processes. PMA
equipment and DER repairs developed
by authorized manufacturers are FAA-
certified and perform equal to or better
than original equipment. Installed PMA
parts and repairs are fully insured to
cover operator equipment.
o:HGRQnWOLNH30$SDUWVDQGZHGRQnWOLNH'(5SDUWVEHFDXVH
IMPACT ON VALUES WKH\WHQGWRKDYHDQHIIHFWRQWKHYDOXDWLRQRIWKHDVVHW:HWU\
Another reason for airlines and lessors
to dislike PMA and DER is because of WRGRHYHU\WKLQJZHFDQWRSUHYHQW30$RU'(5SDUWVIURPJRLQJ
the widely held perception that their LQWRRXUDLUSODQHp
presence will devalue the aircraft or
engine. theoretical view and assume there are ing with lessors and negotiating lease
Stephen Hannahs, CEO and group no PMA parts or DER repairs on the contracts, that we are fairly comfort-
managing director of Aviation Capital aircraft or the engines. However, that able with PMA parts being fitted to
Group, says: “We don’t like PMA parts is not a very practical stance to take the aircraft so long as they are not
and we don’t like DER parts because because it is more likely that many air- engine parts. A DER modification can
they tend to have an effect on the valua- craft have PMA parts and DER parts be something relatively minor such as
tion of the asset. We try to do everything in them. When it comes down to the the installation of a soap dispenser in
we can to prevent PMA or DER parts specific inspection of an aircraft and a toilet cubicle. They are not all engine
from going into our airplane. I think the redeliver of it to a lessor… the rea- related or critical parts, they can be
though unfortunately they are a thing of son we have to make assumptions is very minor. Those do not mean the air-
the future. I think more and more that because people just want a quick and craft cannot be transferred to another
will get traction as time goes on but at dirty valuation and they don’t want to operator. The simple rule there is that
this juncture we prefer not to have them pay much for it. When we are providing is it could affect the airworthiness then
in our aircraft for valuation reasons.” our aircraft values book and our lease it is a critical part.”
However the appraisers have a dif- rate digest, we have to make a whole But appraisers can see both sides to
ferent view. load of assumptions. It is only when we the argument. “I can see why the mar-
Phil Seynour, president and chief are asked to do a more detailed valua- ket developed because there is a lack
operating officer of IBA Group, says: tion and inspection of the aircraft; the of response from the OEMs in terms of
“As appraisers we like to think that in chances are that the aircraft will have pricing parts – engine parts in particu-
the perfect world everything in an air- those parts on it. If a lessor comes to us lar were always increased by 5-6% per
craft is approved by the manufacturer. with an aircraft that has been used by annum,” says Seymour. “The expensive
PMA parts and DER repairs are not United for the past 20 years and they parts within the engine that had fairly
approved by the manufacturer even want to operate it in Europe, is it going minor discrepancies, airlines wanted to
though they have been approved by the to be ok. The chances are the aircraft repair them and get a DER sign off. If an
regulatory authority. But a key issue would have DER approved repairs on OEM was to say to an airline it did not
for us given the movement of aircraft it so might not be allowed to be used in want it to use PMA parts, the airline will
around the world and the market and Europe. ask them to reduce their prices. There
supply and demand, we take a very “We take the view when we are deal- is a bit of that going on, some airlines

38 Airline Economics: MRO Global 2011 www.airlineeconomics.com

 SMOKE AND MIRRORS

do get big discounts from the list price. port.” o%XWDORWRIDLUOLQHSXUFKDVLQJ

But a lot of airline purchasing people The ECA angle is now very important
are very sceptical – they just don’t like and should be noted by all in the PMA SHRSOHDUHYHU\VFHSWLFDOr
monopolies and even if the prices were argument. ECAs have been literally WKH\MXVWGRQnWOLNHPRQRSROLHV
reduced say they just want to have a propping-up the aviation finance sector
choice. We can see both sides of the now since the start of the credit crisis DQGHYHQLIWKHSULFHVZHUH
story; we just have to be very careful and this is likely to continue for the near UHGXFHGVD\WKH\MXVWZDQWWR
in the appraisals as we can’t say PMA future as banks continue recover and
parts are fine.” build reserves. This does not bode well
KDYHDFKRLFHp
for continued PMA proliferation as the
MORE PROBLEMS FOR PMA IN ITS bulk of aircraft coming into service will needs to come close to breaking even.
CORE MARKET either be financed by and ECA backed Some have gone on record stating
PMA proliferation in the USA is due to loan or on an OEM aftermarket agree- that the Airbus programs are more
the fact that the fleet there is older. The ment to cut the original purchase cost in expensive compared to other options in
aircraft have no need to be financed; the first instance. the market today, but we have learned
they are owned and used by the airlines that Airbus is surprisingly flexible and
to fulfil a role right up to the end of the OEM CARE PROGRAMS does indeed tailor contracts to a point
aircraft’s useful life. This usage and OEMs offer care programs to airlines to save airlines money over five year
ownership cycle represents the core at the point of sale alongside joint ven- periods.
market for PMA parts but what happens ture agreements with the MRO market. At Boeing the GoldCare program has
when these old US fleets are renewed OEMs have shown themselves to be been growing rapidly, extending to most
under OEM aftermarket agreements? adept at putting together repair net- aircraft types in service. The clincher
The aircraft owner will still have the bal- works that work for an airline’s entire for Boeing came when they extended
ance of power but in the future this will fleet. In the past OEMs have been the program to cover the 737 Next Gen-
not be the airline, it will be the financ- thought of as having critical design eration product line. The company is
ers – either banks or ECAs – and the knowledge and strong cash reserves currently in advanced discussions with
OEMs and it is this which should worry but a distinct lack of on the ground spe- multiple customers regarding the tai-
the PMA market and investors in the cialist engineers able to perform and loring of GoldCare solutions for their
same. adapt. This is here where the specialist 737 fleets.
One non ECA example of where MROs come in. The engine manufactur- GoldCare is available to 787
financing is all important to the use ers have been controlling much of the Dreamliner operators and Boeing is
of PMAS was highlighted by a senior aftermarket through JV agreements for expanding the service in response
MRO figure recently when he stated to quite some time but the speed at which to airline customer demand. “We’ve
Airline Economics: “I have had many the airframe manufacturers are rolling designed GoldCare to bring value to
meetings with leasing companies and out networks is astonishing. our Next-Generation 737 customers
found just one that said ‘we don’t care, Manufacturers of airframes are by boosting airplane reliability, which
you can put in whatever you want’ offering support for all non-engine parts will reduce cost and improve efficiency
and this is with the airline’s support,”. and repairs, these deals are extremely throughout the airplane’s lifecycle,”
“Everyone else they said no. In one case ambitious. Airbus in particular has said Jay Maloney, vice president, fleet
this was because their aircraft were become a very active player. Its cost- management for Boeing Commercial
mostly owned by Special Purpose Com- per-hour support program has matured Airplanes. “The airline will be able to
panies (SPC) through various financing substantially over the past two years as focus on what it does best – flying its air-
structures. Although the SPC was an new aircraft have been delivered. Sin- planes and serving its passengers.”
Airbus company, the financing was gapore Airlines, for example, has signed Under GoldCare, Boeing leads and
done by Gecas – I think you know what up to cover all support for its A380 and integrates a global team to deliver
the answer was after asking Gecas to A330 aircraft. The recent spat of A330 maintenance engineering, planning and
put a PMA part into a GE engine.” orders has been a catalyst. As Airbus execution and material services with
Aircraft bought using ECA-guaran- sought to save the A330 program and a predictable cost based on airplane
tees are also often contain restrictions with it a great many A350 orders that flight hours. Simplified maintenance
on the use of PMA parts. The ECAs are were delayed, it decided to sell the A330 operations and logistics allow GoldCare
there to support OEM sales; therefore stop gap aircraft at rock bottom prices customers to focus on their passengers
they cannot back any sale that involves with the proviso that customers bought while their airplanes are maintained to
an asset riddled with competing parts. into aftermarket service programs. the highest standards of excellence by
A spokesperson from the UK Export This strategy has proved both a success Boeing, supported by GoldCare part-
Credits Guarantee Department says: and highly popular to the extent that ners.
“The European ECAs have a stated Airbus is now able to up-sell onto other The publicity states that Boeing pro-
policy not to allow the use of PMA parts aircraft as they are delivered, giving the vides GoldCare customers with 24/7
on aircraft which benefit from their sup- A350 program the commercial boost it operations support using the latest

www.airlineeconomics.com Airline Economics: MRO Global 2011 39

SMOKE AND MIRRORS

technology to turn airplane operating P&W states that all four aftermar- engine and use that money for its
data into diagnostic information that ket segments are growing well. Fleet repair or overhaul. “Most importantly,
enhances efficiency and maximizes management can cover non-P&W the lessor loses the security that it (and
aircraft availability. engines, and the company has opened where applicable, its lender) desires
For lessors the programs are a bit of two CFM56 shops in the past 18 months from holding maintenance reserves
a game changer. A new operator, when alone. Overhauls of this engine doubled which under a care package are paid
receiving a leased aircraft covered by for P&W in 2010 and P&W hopes to post to the OEM rather than the lessor. That
GoldCare, is assured that the aircraft’s another doubling during 2011. Pratt also means that some airline credits simply
maintenance adheres to the require- has invested in repair of CFM56 compo- become unacceptable without reserves
ments established by the manufacturer. nents to control the supply chain. P&W and so a lease cannot be concluded.
This is turn means that maintenance is of the mind that airlines will increas- Care packages therefore reduce com-
reserves will slowly become a thing of ingly rely on third-party maintenance petition and the airlines’ options.”

Strategic Airlines signed an exclusive five-year maintenance services and expanded engine management program
agreements with Pratt & Whitney in 2010

the past if current take-up continues. even for line maintenance. Moreover, the fund OEMs collect in
But during the transitional period, les- A side effect to this OEM incursion respect to certain engines may not be
sors will have a number of headaches into the aftermarket has been the fully transferable at the end of a lease.
to deal with not least when clients unbalancing of maintenance reserves Sharp explains: “So the OEM has all this
come to them wanting to add the air- for lessors on both existing contracts money from airline A. When airline A
craft or indeed engine onto their own and potential new business. All leasing returns the engine to us, which we then
care program. This echoes Jon Sharp’s companies – engine and aircraft lessors lease out to airline B, they will be in say
concerns over the non-transferability of – collect maintenance reserves in what a half-life condition. When we ask for
care package reserves and the fact that is universally thought of as being the the fund money for the hours and cycles
even though they may be transferable fairest system possible. All lessees dur- burned off to be returned to us, the
there is often a shortfall. ing the course of an aircraft/engine’s OEMs refuse. That is the first problem.
Of the engine OEMs, it is perhaps life will pay the same per-hour costs Secondly even if the fund is transfer-
Pratt & Whitney that has focused even levelling the maintenance costs across able, it is often insufficient given that
more intently on the aftermarket than the life of the product so that no one les- the deal was probably struck at the time
most. It has seven engine-overhaul see, or indeed the lessor, has to foot the of selection of the engine where the
shops and 15 component-repair shops bills while others enjoy maintenance manufacturer may have granted a con-
and offers material solutions for its own free periods. In addition, and maybe cessionary rate. For example they could
and CFM56 engines as well as line ser- more importantly, the reserves are held have asked for $100 per flying hour to be
vice, including the much publicised and as security, so in the event of a default, paid into the fund even though the real
highly successful “Ecopower”. the lessor can repossess the aircraft/ cost of maintaining the engine is $150

40 Airline Economics: MRO Global 2011 www.airlineeconomics.com

 SMOKE AND MIRRORS

an hour, somebody will have to stump Aldo Prario says: “If a GE is devel- is no technical reason why we cannot
up the difference for the next overhaul. oping a new engine programme and do a repair. What is the OEM going to
And that is not something we should they have limited resources they are say? If they don’t say yes now, we say we
be doing, or something the next airline going to put those scarce resources on are going to be back tomorrow with the
should be doing.” the new engine program; maintaining operator, although we say it much more
As more and more airlines ask les- or supporting the needs and desires politely that that.”
sors to include aircraft under their of an airline with a mature engine is Dr Robert Furlan, VP part repair,
OEM aftermarket programs so there less likely to be at the forefront. If I am engine maintenance at SR Technics
begins a problem for the lessors. They developing a new engine, all of my tal- in Zurich, agrees that partnership
must either double-up the cost to the ent and most resources are portioned with OEMs for repairs is important.
airline per hour and risk losing the to the people doing the new product. This is understandable given the com-
business or work out some other way to Consequently, but not intentionally, the pany is part owned by GE - but he also
move forward through agreement with product support of a mature engine highlights the importance for them to
the OEM, lessor and lessee. takes a back seat. I have seen circum- remain independent from the OEMs
stances where airlines under their own and focus on keeping costs low for the
DER REPAIRS - 121 authority develop a repair because customer.
THE FUTURE SOLUTION? the OEM hasn’t reacted quickly enough He says: “You can develop repairs
Amid all of this OEM expansion, it is for them. However the repair on the on your own like DER and PMA. Then
important to note the growth in DER aircraft has been documented in hours you make claims that your technical
repairs. The approved repair market is and cycles, and the MRO shop then solution is equal or in many cases bet-
growing rapidly and the OEMs are fully ter than the OEM. You can the approach
aware of the significance that this could the OEM and present a business case
o:KDWLVLPSRUWDQWIRUXVLV
have. But in most cases today, MROs for the repairs. It could be that if the
upon arriving at a solution or improve- WKDWZHKDYHWKHDELOLW\LQRXU OEM already has some pressure to
ment for a repair will revert back to RUJDQLVDWLRQWRGHVLJQDUHSDLU come up with a repair in the area or if
the OEM to arrange a joint venture on they realise that this repair is not fixing
specific repair going forward. This is LQSDUWQHUVKLSZLWKWKH2(0V the problem, they will decide they need
fast becoming the norm and for some DQGJHWWKHLUDSSURYDOp your idea and will include the repair in
independent MROs this is a core part of their manual. In some cases the OEM
their business going forward. goes back to the OEM and said ‘ok you puts themselves as the source but you
Daniel Adamski of HEICO says: “In didn’t have the time to do it for me, we share the market.”
today’s competitive market, owners and did on our own authority, now put it in However this approach doesn’t
operators are continuously searching your book. We have done all of the work always work, says Furlan, as the repair
for ways to reduce costs while maintain- for you but we would like you to put it councils of the OEMs make purely
ing safety. There are a variety of means in your manual so the world can use commercial decisions on whether it is
permitted under the CFRs for owners/ it’. There are things that happen in worthwhile coming up with a repair or
operators to maintain their aircraft and the mature aircraft world that are not not. “That’s my experience,” he says. “A
restore or replace parts and compo- very responsive to the operators needs topic is raised and has a good idea, and
nents. The proper implementation of but they are understood to be so, not the aftermarket could have a demand,
DER repairs is one method permitted because the OEM doesn’t care about a but the OEM could say no that they are
under the CFRs. DER repairs to parts mature engine any more, just that their not going to come up with this specific
of any extent, short of 100% fabrication, priorities are different.” repair because sales of their new part
that restore them to an airworthy condi- For independent MRO shops, form- are down and they would rather make
tion, when the applicant has determined ing these kinds of partnership on the more money on that than devise a repair
that repair is more economical than DER side is essential to their near-term service. This is just the way the OEMs
purchasing or fabricating a complete survival. One senior engine MRO figure make money – selling new parts.”
new part, are permitted, provided they who declined to be named stated: “What Although partnerships and joint
are in strict compliance with all appli- is important for us is that we have the ventures in the DER market provide
cable regulatory and airworthiness ability in our organisation to design a a way for independent MRO shops to
requirements.” repair in partnership with the OEMs remain competitive, technology is being
DER repairs make sound financial and get their approval. If you can do that developed that will result in the OEMs
sense for aircraft operators and they and work with the OEM and develop a controlling even more of the aftermar-
often improve on flaws in the original good relationship, then you can get the ket. Furlan explains:
parts. With most OEMs expending OEM to approve the repair unless it “The old world was about getting
much of their time and resources in the would be a major hit to their bottom line. licences and negotiation with the OEMs.
development of brand new engines, they Occasionally we tie in the customer. We In the future and the next generation of
have limited ability to work on develop- often present a case to the OEM with all engines there will be major changes in
ing repairs for more mature engines. of the facts for a repair and that there the game. Engines will be sold from the

www.airlineeconomics.com Airline Economics: MRO Global 2011 41

SMOKE AND MIRRORS

very first day with long-term mainte- with the OEMs through aftermarket
nance contracts and there will be many supply agreements and other joint-
innovations in the new equipment that venture contracts to such an extent
the OEMs will keep proprietary.” that they themselves have become an
The next generation of engines con- integral part of the OEM web, even
tain composite fan blades; composites though they repeatedly maintain there
require a great deal of knowledge and are independent. Conversely it is this
experience to repair and also require interaction with the independent MRO
new and expensive machinery. Another market that has protected the OEMs
example Wolfgang cites is bladed disc from anti-trust investigations but has
technology, which have to pass a spin- attracted the attention of the European
ning test to show it is safe. “This is Commission and Capitol Hill regulatory
difficult for a non-OEM,” he says. “I commissions. A source at the European
do not see the free market developing Commission confirmed to Airline Eco-
in the next generation of engines that nomics that they were “looking into the
there was in the more mature engines. situation”. In the meantime however the
The OEMs are taking care that the concept of an independent MRO is being
whole lifecycle of the product is in their completely eroded and the decision
hands, including the aftermarket.” power of the independent and airline/
He adds: “In the old world, I would operator with it. When MRO shops are
have said we would have to get more and woven into the OEM structure to such
more technology to be a bigger player an extent that they are worried to upset
in that market, but in the new world them by commented on the record,
with our ownership we are pretty well then the term independent has largely
in the market and still we are introduc- become redundant.
ing technology we have to be attractive In conclusion, it is clear that as the
to the OEMs. The climate is very good MRO market consolidates, the very
between us and the OEMs and we have to best option for the PMA firms is to be
be an attractive partner. Our technology bought by an OEM or MRO, or buy up
is not to put the OEM under pressure; it maintenance companies themselves.
is more to be an attractive partner. We If they are not large enough to do this,
want to deliver best performance so we then PMA market consolidation and
will be a partner to the OEM but we will refinancing will need to take place to
also challenge them. We will build up facilitate the next phase of prolifera-
our technology to provide the best ser- tion. The PMAs have spent hundreds
vice for our customers…. The change in of thousands of dollars fighting their
the industry in selling engines, requires collective corner and appealing to the
a totally new strategy. We are preparing airlines and lessors to look again and
for composite repair, which requires a again at the correct facts. This has got
lot of new technology. The good thing is very little traction to date. Now as the
that we are not only an engine MRO, we OEMs increase their grip on the after-
have a lot of know-how on the aircraft market, it is logical that the PMA firms
side of composites and we have to build should seek to secure their position at
it up right away.” the front end in the maintenance shops
In a world where the OEM con- through merger and or acquisition
trols everything from conception right and then extend to offer PMA included
through to D-check is one where there is aftermarket care through base and line
little room for competition. The aviation maintenance and power by the hour
sector is quietly moving towards huge agreements. By controlling a section of
OEM control and this, coupled with the front-end market, the PMAs will be
MRO consolidation, will mean higher able to guarantee continued parts and
prices for airlines before the end of the repair supply to the market no matter
decade. If the fact that higher prices and the aircraft age. It is the only way to
an increased monopoly of the OEMs is secure a solid footing for PMA in the
forthcoming, why has no one stepped commercial aviation sector for the next
up to the plate to argue against such a decade and beyond. The only question
situation? The very same independent remaining is when will the PMA firms
MROs are themselves intertwined stop talking and start acting?

42 Airline Economics: MRO Global 2011 www.airlineeconomics.com

 SMOKE AND MIRRORS

PMA LIMITATIONS
Organisation Allow PMA Limitations
Ex-Im NO It goes against our stated policy to allow
PMA on aircraft which benefit from our sup-
port

ECGD NO The European ECAs have a stated policy not

to allow the use of PMA parts on aircraft
which benefit from their support.

Coface NO
Hermes NO
Lessor Allow PMA Limitations If on care program or PBH agreement
does the lessee still have to pay towards
maintenance reserves

Jackson Square YES in non critical ECA funding exclusions It depends on the airline. Sometimes if we
Aviation areas on a case by can do a three party agreement with the
case basis OEM we will forego MRs.

ELFC NO Limits the ability to lease or sell Sometimes, yes but most often, 75% of the
time no.
Willis Lease NO Operator either has to pay reserves or
agree along with maintenance provider to
a tripartite agreement

ILFC YES on a case by ILFC’s approach to the issue of PMA parts

case basis is that we allow our customers to make the
decisions as long as all certifications and
aviation authorities regulations are met.

Aviation Capital NO We do everything we can to avoid PMA/DER

Group but we accept that it is the future.
AerCap No Comment Airline Economics is aware of several clients
that have been allowed PMA in non critical
areas

FLY Leasing / BBAM NO We preclude the use of PMA at all times "Typically a lessee will not pay reserves to
both the OEM care program and to the
lessor for the same maintenance event.
In the scenario where the lessee pays the
reserves to the OEM, we have structures
in our agreements with the parties that
returns the lessor to the same position at
lease expiry had the lessor received the
reserve payments during the term."

GECAS NO

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FINANCE

Solving issues with third-party

maintenance contracts

John Karesh at Vedder Price sets out the issues arising from maintenance contracts
where, instead of paying engine reserves to the lessor, the lessee pays a maintenance
provider based on the hours or cycles of operation in exchange for engine overhauls.

he main issue for a les- last overhaul and before lease expiry or The above two solutions do not

T
sor is that, when the termination. Lessees often resist these involve much negotiation with the main-
lease expires, it holds no solutions as duplicate maintenance tenance provider. Discussed below are
reserves to apply towards payments and as depriving them of the other solutions that seek more middle
the next engine overhaul, benefit of advantageous pricing under the ground, but that do require the mainte-
presumably when the air- maintenance contract. nance provider’s agreement.
craft will be operated by a new lessee
whose lease will require the lessor to pay 2. LEAVE IT FOR RETURN 3. REFUND
the portion of the cost of the next over- In support of this solution, lessees argue The lessor’s key objective should be
haul attributable to engine use before the the engines will be maintained and over- to avoid a forfeiture of the unexpended
new lease began. There are a number of hauled under the maintenance contract maintenance payments paid under the
ways to address this issue. None of them in a manner consistent with the corre- maintenance contract. To accomplish
satisfies all the parties all the time, and sponding lease requirements and that this, the maintenance provider and les-
each raises its own issues. any deficiency can be addressed upon see can agree that if the maintenance
return of the aircraft at lease termina- contract is terminated with regards to
1. LEASE RESERVE PAYMENTS tion or earlier expiry under the return the lessor’s engines for any reason,
One solution is to require the lessee to pay condition clauses of the lease. A finan- including expiration or termination of
reserves under the lease without regard cial adjustment, for example, would the lease, the maintenance provider will
to the maintenance contract. Another is compensate for an engine with greater- refund to the lessor all (or an agreed
to require the lessee to pay lease reserves than-allowed accumulated hours or portion) of the unexpended payments it
only to the extent they exceed the monthly cycles or that otherwise does not com- holds on the basis that the maintenance
payments under the maintenance con- ply with all return conditions. But lessors provider will have been paid for an over-
tract. These solutions typically require the often encounter difficulty recovering haul it no longer has to perform. If the
lessor to pay the lessee an amount equal return condition payments, especially in refund is less than the reserves that
to the paid-in reserves upon the success- cases of airline bankruptcies. Top credit would have been paid under the lease,
ful completion of an overhaul under the airlines that would not pay reserves any- the lessee can pay the difference.
maintenance contract, but enable the way argue the maintenance contract is The maintenance provider might
lessor to retain the reserves paid after the not even relevant to the lessor. resist this approach because it might

44 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 FINANCE

occur after further operation of the engine the maintenance contract to secure its
by a new lessee, the maintenance pro- performance under the lease, so if the
vider might resist contributing to the cost lessee defaults under the lease, the
of the next overhaul if differences in the lessor could seek to enforce the mainte-
use profile or maintenance practices of nance contract for its benefit. However,
the new lessee could increase its obliga- as a general rule, absent agreement
tion. A financial adjustment could solve from the maintenance provider, it would
this problem. not have to perform for the benefit of the
lessor if the maintenance contract con-
5. CURE OF LESSEE DEFAULTS tains a provision generally that it is not
Curing lessee defaults under the mainte- assignable, and in any event, the main-
nance contract to avoid termination might tenance provider’s obligation to perform
not adequately address the concerns of an overhaul or refund payments would
the lessor or the maintenance provider. be limited to what is required under the
A cure can be expensive and would only maintenance contract. Moreover, the
make sense if the maintenance provider lessor could be stayed from enforcing
has agreed to overhaul the engines for its security interest if the lessee were to
the lessor or a new lessee and otherwise file a petition under Chapter 11 of the
to continue performing under the contract Bankruptcy Code.
as long as the lessor makes the cure pay-
ments notwithstanding any other default 8. WHOLE NEW AGREEMENT
by the lessee under the maintenance The best option. The best way to address
contract. If the lessor elects not to cure, the concerns of each party is a sepa-
or if the maintenance provider refuses to rate, three-party agreement among the
accept a cure, the maintenance contract maintenance provider, lessor and lessee
should require the maintenance provider providing that, following a lessee default
to refund to the lessor all unexpended under the maintenance contract or the
maintenance payments in its possession lease, the lessor can elect to require the
attributable to the lessor’s engines. maintenance provider either to make a
refund, or to overhaul the engine with
view maintenance payments as its prop- 6. ASSIGNMENT costs shared, or to permit the lessor or
erty or as security for lessee obligations. A right to assign the maintenance con- next operator or purchaser of the engines
It could claim that the maintenance tract to a new lessee is often contentious to step into the lessee’s shoes under the
payments form part of a pool to pay for and might be of limited use to the lessor. maintenance contract.
overhauls on a fleet of engines, that it will Offering an assignment of the mainte- The three-party agreement should also
be damaged by the premature termina- nance contract to a new lessee could, provide that the maintenance provider
tion of the contract because it anticipated in certain circumstances, enhance the will: (a) notify the lessor immediately upon
a certain workflow, or that it ‘over-built’ lessor’s efforts to re-market the aircraft. a material breach by the lessee under the
the engine at the last overhaul to reduce But the new lessee might not want the maintenance contract; (b) following such
its projected cost under the contract. contract if it is too expensive or burden- breach or a default under the lease, follow
some, or if it has its own maintenance the direction of the lessor to the exclusion
4. OVERHAUL COST SHARE programme. of the lessee in relation to the lessor’s
The maintenance provider might agree The maintenance provider might engines; (c) give copies to the lessor of
to contribute to the cost of the next object to an assignment on the basis any notice it gives or receives under the
overhaul the amount of unexpended that the monthly maintenance fees and maintenance contract; (d) not modify
maintenance payments attributable to workscope were agreed with the exist- the maintenance contract including
the lessor’s engine held at the time of ing lessee based on factors, such as by means of a private letter ruling, DER
contract termination. The contribution its use profile and assumed quantity of repair or other exemption, exclusion or
may be limited to overhauls performed in work, that do not apply to the new les- alternative means of compliance, without
its shop and/or within a limited period of see. However, these factors should only the lessor’s consent; and (e) not pledge,
time, or to the payment of a percentage affect pricing, not the agreement to assign or encumber its rights (including
of the cost of the next overhaul based on assign. Some assignees might simply its right to payment) under the mainte-
the ratio of the number of hours or cycles be unacceptable to the maintenance nance contract.
for which the maintenance provider is provider, such as a competitor. The lessor should agree to notify the
holding payment and the total number maintenance provider upon the occur-
of hours or cycles accumulated by the 7. SECURITY INTEREST rence of a lease event of default.
next overhaul. The lessee could grant the lessor a secu- The lease should include provisions
Since the next overhaul will usually rity interest in the lessee’s rights under that: (a) prohibit the lessee from (i)

www.airlineeconomics.co Airline Economics: MRO Global 2011 45

FINANCE

(or supplemented) to cover the lessee’s under the lease), then upon withdrawal:
obligations described in (a)–(d) above. (a) the maintenance provider should
pay to the lessor all unexpended main-
OTHER LESSOR ISSUES tenance reserves attributable to such
A number of other clauses in mainte- engines; and (b) the lessee either should
nance contracts can also create issues be required to (i) induct the engines
for lessors: into another acceptable maintenance
Confidentiality: The lessor needs to programme or (ii) commence paying
know the provisions of the maintenance reserves under the lease and make any
contract to determine if any them (includ- catch-up payment described above, and
ing those discussed below) affect the pay any termination fee due under the
lease, and should be willing to maintain maintenance contract.
such confidentiality. Even pricing of the Artisans’ liens: Such liens (some-
maintenance contract can be important times known as mechanics’ liens) are
for the lessor to determine if it risks being generally limited to the agreed price and
‘under-reserved’ or if the amount of a reasonable value of the labour and parts
refund becomes relevant. furnished by the maintenance provider for
Conditions precedent: Most mainte- the improvement of the particular engine.
nance contracts will excuse performance Sometimes, the maintenance provider will
by the maintenance provider or permit it waive its artisan lien rights on the theory it
John Karesh at Vedder Price represents lenders to terminate the maintenance contract has already been paid for the cost of the
and lessors in a variety of domestic and cross- if the lessee fails to make payment or overhaul by the lessee’s periodic mainte-
border aircraft finance transactions, including perform other obligations. This is par- nance payments. But some maintenance
mortgage financing and operating leases, and ticularly troublesome if the maintenance contracts purport to give the maintenance
investors and operators in domestic and cross- contract contains a cross-default clause provider a consensual lien on the lessor’s
border purchases, sales and financing of aircraft. to other agreements with the mainte- engine to secure all obligations under the
nance provider or an affiliate. maintenance contract, including for unre-
Workscope: The lessee might argue lated engines. The lessor should seek a
assigning, pledging or encumbering its the workscope is not relevant to the les- waiver of these liens.
rights under the maintenance contract sor’s interests because the lessee will
and (ii) modifying or waiving any provi- remain obligated at its expense and risk WHERE AND BY WHOM CAN THE
sion of the maintenance contract without to perform all maintenance and meet OVERHAUL BE PERFORMED?
the lessor’s consent; (b) make a lessee all return conditions required under the The lessor should verify that the main-
default under the maintenance contract lease, and the lessor will have a claim for tenance provider remains liable for the
a default under the lease; (c) require the damages in case the lessee fails to do so. work performed by its subcontractors or
lessee (i) to hold the lessor harmless if Replacement engines: The mainte- designees and that any subcontracted
the refund or credit of maintenance pay- nance contract should permit the lessee work is covered by the maintenance pro-
ments or contribution to the cost of the to induct a replacement engine into the vider’s indemnity and warranty.
next overhaul from the maintenance pro- maintenance programme if a leased Warranty: All warranties of the main-
vider is less than the amount the lessor engine is replaced, for example, due to an tenance provider should be assignable
would have been holding had traditional event of loss. The lease should obligate to the lessor or new lessee.
maintenance reserves been paid under the lessee to pay any required induc- PMA parts: Any lease restriction on
the lease, and (ii) to indemnify the les- tion charge. If the replacement engine is the use of PMA parts should be consis-
sor for any loss resulting from a lessee not inducted, the maintenance contract tent with the maintenance contract.
default under the maintenance contract, should require the maintenance provider Replacement parts: The mainte-
including any cure payment made by to refund the amount of unexpended nance contract should provide that title
the lessor; and (d) require the lessee to maintenance payments attributable to replacement parts will vest in the les-
pay as additional rent (i) any amount by to the replaced engine, and the lease sor, subject to the lease and the lien of a
which traditional maintenance reserves should obligate the lessee to make any lender, if any.
payable under the lease exceed the necessary ‘catch-up’ payment in case the
maintenance payments payable under refund is less than the reserves that would CONCLUSION
the maintenance contract or (ii) full, tradi- have been paid by the lessee under the Third-party maintenance contracts are
tional maintenance reserves at any time lease in respect of the replaced engine here to stay, and are growing in impor-
when the maintenance contract is not in absent the maintenance contract. tance. They can be of great benefit to the
effect together with a ‘catch-up’ payment Engine withdrawals: If the lessee has lessee, and in many instances to the les-
if full maintenance reserves become the right to withdraw the lessor’s engines sor as well. But they raise issues that the
required under the lease. The lease from the maintenance programme parties can effectively resolve if they co-
security deposit should be adequate (especially in contemplation of return operate reasonably in the process.

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 AFTERMARKET

More than an afterthought

In this climate it is vital that aviation aftermarket businesses optimise their aftermarket
supply chain. Inform’s Cathy Humphreys explains how to boost the efficiency of this
process with inventory management planning without making big changes to systems.

he economic climate and costs, negative effects on service levels, demand volatility increases, the effect

T
change in market require- or significant firefighting. on the amount of inventory required can
ments has seen supply While a strong understanding of the have a major impact on cashflow and
chain management move efficiency of a standard supply chain bottom-line profit.
up the business agenda. operation is commendable, many have The effects of the recent economic
This has led to many man- forgotten the aftermarket. Product life- climate have disrupted the normal pat-
ufacturers improving process efficiency, times are lengthening, and companies terns of demand for a lot of industries,
smartening up performance metrics, are seeing changes in demand pat- and throughout the whole supply chain.
and investing heavily in technology to terns. Now is the time for the aftermarket What will be the effect on the required
increase the efficiency and cost-effec- supply chain to be at an optimum, parts to service the aftermarket? Do we
tiveness of their supply chain. rather than being treated as an ‘also- know the knock-on effect of this yet, or
In recent years supply chain man- ran’ division. do we have to wait for the natural time
agement teams have begun to look at lag to affect the demand profile for
risk evaluation alongside their process DEMAND VOLATILITY spares?
optimisation strategy. This has helped One of the main characteristics of an Companies that have greater visibil-
to position organisations to better man- aftermarket business is the large range ity of future demand and can anticipate
age risks such as failure to supply, higher of parts that have to be stocked. If the volatility will stand a better chance

www.airlineeconomics.co Airline Economics: MRO Global 2011 47

AFTERMARKET

product, and to efficiently source and versions of spare part are available.
stock these items. Issues such as backward compatibility
Although it is common practice for and obsolescence have to be managed
companies to use sophisticated soft- carefully to ensure the right parts are
ware for the new-build market, many available in the right strategic location
still use spreadsheets for the manage- for rapid delivery to the right customers.
ment of spare parts. With the pressures Offering superior customer service
of high service-level requirements and is more important than ever before as
high demand volatility, isn’t it the latter it encourages repeat business. Manu-
part of the business that needs the sup- facturers now need to review what parts
port of sophisticated software and not they will need to keep in stock to ensure a
the other way around? smooth aftermarket service for products
being kept for longer periods of time.
IMPROVED DEMAND ACCURACY Ultimately, this greater instability in
Improving demand accuracy is the the demand of new products, as people
single most effective action that will hold on to products for longer, affects
cascade through all other supply chain the supply chain dramatically, as it
metrics, improving revenue and profit, becomes far more difficult to manage
and reducing costs. If aftermarket parts the all important aftermarket.
are inherently difficult to forecast, then
this is where businesses should look at EFFECTIVE PLANNING IS THE KEY
getting help. Supply chain management is constantly
Cathy Humphreys is UK country manager at Advanced planning and execution evolving, and organisations should
Inform, which specialises in planning and software, catering specifically to after- recognise the role that decision-support
decision-making software to improve busi- market products, can have a big impact systems can play. These systems can
ness productivity. She has been at Inform for on demand accuracy. By applying the assist not only in supporting best practice
four years and was previously a director in the appropriate algorithms (automatically) for strategic decision-making processes,
aftermarket services division of rolling stock to the historical consumption of each but also in the operational, transaction-
manufacturer Bombardier Transportation. and every item, as well as combining oriented decisions that typically get the
known demand such as scheduled focus from supporting technology.
maintenance or predicted failure rates, Businesses prepared for future
of supplying customers in the most accuracy will increase. changes in demand of spare parts will
optimised way. That said, some people argue that strengthen their market position. Predict-
By improving the performance of forecasting based on historical con- ing future requirements, and planning
the spare parts division of a business, sumption is not right for their business. proactively, will create greater visibility
profit can be driven into the company But it is a good place to start. It pro- and the opportunity to enable a more
through increased revenue in the vides a demand shape or pattern for efficient (and profitable) supply chain.
aftermarket and reduced wasted cost. the profile of an item, which can then be The business benefits will be evident
This can potentially increase revenue adjusted with known information about if it can better manage the aftermarket
in the mainstream business through the future demand. supply chain and achieve optimal stock
increased customer loyalty. The length It is also essential businesses under- levels to satisfy service-level agree-
of time a company spends doing busi- stand potential changes in the product ments. Benefits include a release of
ness in the aftermarket is often far mix as well as overall volumes, so the cash tied up from excessive stock,
greater than the initial sale. This creates right parts can be stocked. The cost improved process efficiency and less
an opportune time to sell more – if the of having the wrong parts could be a emergency costs from firefighting, as
customer is happy. breaking point. A lack of product avail- well as the potential for increased rev-
The key is continuous improvement. ability will lose customers and increase enue from happy customers.
A few years ago it was fine to have a the cost of expensive emergency ship- Aftermarket supply chain manage-
spare parts division whose focus was to ments. Excess stock ties up capital, ment is complex, but the rewards are
identify those existing production parts incurs unnecessary storage costs and big for getting it right. The key is not
that might be required in the aftermarket affects cashflow. to use systems created for the main-
and to keep a few to one side for later. Many businesses are now aiming stream business by trying to shoehorn
Then, when required, the appropriate for 100% availability of spare parts, yet them into a completely different envi-
part is sourced at a higher price. their portfolio is set to increase, espe- ronment. Instead, it is paramount to
This is no longer the case, and the cially with the number of revision levels have the right tools for the job and to
requirement now is to dynamically and required to support a larger base of use sophisticated systems to manage
accurately predict what parts might be older products. The longer a product is the complexity, helping managers make
required during the lifecycle of each supported in the aftermarket, the more the right decisions.

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THE PARTS MARKET

Pulled apart
The parts industry is fragmenting, as more and more players enter the market. And
they’re all competing for the same slice of business. MRO Global talks to Kellstrom’s
Dennis Zalupski about how his firm intends to retain its share

T
he global movement in ing for the same slice of market share. also been a deluge of investment dollars
the aviation industry This view is backed by Dennis Zalupski, coming into the used airplane market that
towards younger aircraft chief executive officer of Kellstrom Indus- has resulted in financial investors and a
has had an effect on all tries. “The competitive landscape of the few aviation companies taking large posi-
maintenance repair and aviation aftermarket has changed consid- tions in asset classes that are approaching
overhaul firms, and the erably over the past decade. Not only are their end of life. All of these factors have
parts market is no different. Although it there many more large competitors, there contributed to a flood of material into the
is of course far more targeted, it remains is also a proliferation of small companies aftermarket over the past few years.”
at the very front line of cost pressures and that work out of other people’s invento- The growing acceptance and availabil-
demand. The parts market, from the point ries, using a computer and the internet to ity of used parts is helping to drive down
of view of an investor, looks proliferated at sell parts around the world,” he says. “Per- overhaul costs across the globe. Mainte-
the moment, with many players compet- haps even more importantly, there has nance specialists have an entire spectrum

50 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 THE PARTS MARKET

of options to choose from to suit their receptive to the concept of used, recondi- advantage we offer them is we already
clients, from new original equipment tioned and PMA parts, due to concerns have the infrastructure in place and the
manufacturers’ parts through to PMA, over asset values. However this view relationships with the airline custom-
approved repairs and reconditioned used appears too be subsiding as new les- ers and MRO facilities around the world
parts. The great number of options open sors enter the market with a more open to effectively market their products for
to airlines has had an effect on the mar- mind regarding their use. But on the them – often better than they could do on
ket Zalupski of Kellstrom Industries is other hand, the OEMs are gradually their own. We also assume the inventory
on the front line in the parts market and taking control of the market through and credit risk for the OEM, something
he is seeing the movements in the global increased aftermarket agreements at that has always been somewhat of a
market first-hand. “On the commercial point of order, which in turn is leading barrier to success for OEMs in the after-
aviation side of the business, we are see- to parts specialists having to join forces market. This type of relationship works
ing continued price pressure on both with the OEMs in much the same way as especially well for us, with manufacturers
surplus airframe and engine parts. This the MROs. “There is no question that the such as Ametek Aerospace, which is an
is really a direct result of the number of big OEMs, whether they are airframers, important partner of ours in the Com-
older aircraft that have been removed engine companies or systems providers, mercial channel, and Honeywell, who we
from service and disassembled over the have woken up and are trying to protect are very strong with on the military side
past few years. Generally, it has been the their very profitable new parts stream of our business.”
older Boeing and Airbus models along into the aftermarket,” says Zalupski. “In “Where we don’t have an aftermarket
with the associated engine types. Pricing some cases, we join forces with them by distribution relationship with an impor-
on newer generation equipment, if you using our ongoing access to the global tant OEM, we still make every effort to
can find it, continues to be quite strong.” customer base to sell and distribute their work with and support it when we can. For
The leasing sector is generally less new products into the aftermarket. The example, when we have surplus material

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THE PARTS MARKET

that needs to be repaired or overhauled,

we will make a concerted effort to send it
to the OEM, assuming it is competitive in
price and turn time. This in turn helps us
sell the products to our customers, most
of whom are as quality-conscious as we
are,” says Zalupski.
Parts demand, both from a quantity as
well as platform type, changes on a daily
basis. Longer-term trends in demand
follow the fleets. Today, almost any part
from the new-generation airframes and
associated engine types, such as the
newer versions of the A320 along with
platforms such as the 737NG, 777 and
A330, always have more demand than
supply. As these fleets continue to grow
and the OEMs continue to raise prices
for new parts, that demand is set to
become even greater.
The industry has changed greatly
over the past decade and as it contin-
ues to evolve, so too will companies
such as Kellstrom. The lifecycle of an
aircraft is getting shorter, from 25–30
years to something more in the 20-year
range. Based on the number of new air-
craft Boeing, Airbus and the others are
projecting to build over the next two
decades, it seems there will be a race to
see if the industry can grow fast enough
on a global basis to absorb all of the new
and used aircraft. If the global economic
situation were to cause a Japan-style
decade-long recession, then we could be
faced with massive aircraft retirements,
which will be parted out.
The future focus of the industry will
be on Asia in general, and China in par-
ticular, which is clearly a growth market.
A combination of routes is driving
growth – long haul between continents,
long haul within Asia and short haul
within the regions and/or within China.
“When you combine this with the young,
vibrant and growing population, as well
as lower wage scales, it is little wonder
Asia and China have quickly become a
force in the global MRO business. Back
in the mid-2000s, we anticipated this
would happen and opened our Asian
regional office in Singapore,” says Zal-
upski. “Today, in addition to the office in
Singapore, we have an operation in Aus-
tralia, as well as a network of exclusive
agents who help us service the region.
This is clearly our fastest growing region
on the commercial side.”

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 THE PARTS MARKET

Kellstrom Industries
Kellstrom Commercial Aerospace between Kellstrom’s order backlog of opportunities to take our strengths
is one of the largest and most reli- previously won business as well as a and use them to grow into associated
able suppliers of aircraft parts and is new contract recently won supporting businesses. For example, we are using
a full-service provider of logistics and the US Air Force, it has been able to a combination of Kellstrom’s heritage
material management solutions. Kell- continue to grow the business.” in providing surplus engine parts to the
strom has established itself as a global Currently, Kellstrom is able to aviation market along with our exper-
supplier of inventory solutions with fund all of its business needs through tise in new parts distribution to build a
specific focus on: its existing credit lines and cash new business for ourselves focusing on
 EZk`^g^p&`^g^kZmbhgbgo^gmhkr generation. The company doesn’t ground-based power. While still small,
 :lmkhg`%\nlmhf^k&_h\nl^] anticipate needing additional fund- we believe this business can grow into a
management team ing in the near future, but is confident very profitable niche for us soon.”
 LmZm^&h_&ma^&ZkmBM\ZiZ[bebmb^l that if it did, it could raise a reason- Kellstom’s growth today is primarily
and solutions able amount of funds relative to its focused on three areas. The first is the
size and profitability. new OEM parts distribution into the
COMMITMENT TO THE HIGHEST LEVEL One area that any exporter needs global commercial and defence avia-
OF QUALITY STANDARDS to consider is currency fluctuations, tion aftermarkets. Another strong area
Kellstrom Commercial Aerospace has but generally Kellstrom finds it has of growth has been the defence parts
achieved success through the establish- been helped by the weaker US dollar. and logistics business, which provides
ment of various value-added material “We are a US-headquartered company support to aviation MRO companies
management and distribution pro- that does more than 50% of our busi- around the world, such as Northrop
grammes and has existing agreements ness outside of the US, and the global Grumman in the US, Marshall Aero-
in place with companies such as: aviation industry is still primarily dol- liZ\^bgma^NDZg]JZgmZl=^_^g\^
 Ghkmakhi@knffZg lar based,” says Zalupski. “Because of Services in Australia, all of whom ser-
 FZklaZee:^khliZ\^ this, most of our costs are in US dollars vice US military platforms such as the
 JZgmZl=^_^g\^L^kob\^l and when we sell outside of the US, the C130, P3, F16 and B707. Lastly, Kell-
 :f^m^d:^khliZ\^=^_^gl^ weaker dollar allows us to offer more strom continues to see strong growth
 Ahg^rp^ee competitive products and services in the traditional commercial aviation
 IZ\bÕ\L\b^gmbÕ\ to our customers. On the negative surplus parts business, including the
 :kkhpa^Z]Ikh]n\ml side, the weaker dollar has driven up power segment.
It currently offers supply chain man- our cost structure and salaries in the “We are very proud of a very large
agement, inventory pool programmes, other markets where we have a pres- logistics support contract we recently
exchange programmes and surplus ence, primarily Europe, Singapore won supporting Northrop Grumman
management. and Australia.” and the operational fleet of the US Air
Dennis Zalupski of Kellstrom The focus at Kellstrom over the past Force AWACS airplanes. The contract,
Industries was recently interviewed few years has been to continuously which is for five years, is currently tran-
by MRO Global and was asked: What improve performance in every facet of sitioning over to Kellstrom and will be
have the past 12 months been like for day-to-day business. Today’s Kellstrom 100% under our control by November
his company and has he had noticed a is a company with a great infrastruc- 1,” says Zalupski. “We are fortunate to
slowdown of late? ture, whether it is facilities, IT systems, be in a great industry at an exciting
He said: “The past 12 months have quality systems or its most important time. Kellstrom might be a relatively
been strong from a business standpoint asset – its people. “Our goal is to lever- small player in a huge global industry,
for Kellstrom. With its defence and age these strengths into every segment but we like where we are positioned in
commercial parts and logistics busi- of the business we compete in, not nec- the space we concentrate on and we are
nesses, along with its FAA145 repair essarily to be the biggest, but to be as bullish on the future of the company.”
business, Kellstrom finds itself pretty efficient a business as possible and to
well diversified. All three segments deliver high-quality products and ser-
have performed well. Kellstrom has vices to our customers at the lowest You can contact Kellstom at:
seen some softening in Europe, espe- possible cost,” says Zalupski. Kellstrom Industries
cially in the military MRO business, “At this time, we are looking for 3701 Flamingo Road
which it believes is a direct result of better ways to compete every day in a Miramar, FL 33027
the pressures on EU budgets due to market that gets tougher all the time. Tel: (954) 538-2000
the deficit issues there. Fortunately, At the same time, we keep looking for Fax: (954) 538-6626

www.airlineeconomics.co Airline Economics: MRO Global 2011 53

AMERICAS

M
id-term growth in number of MD and 757 fleets flying. lific. In the US especially there are many
North America will During 2010 and the first half of 2011 MD and 757 aircraft still flying – once
be slow, with limited economic recovery gave airlines confi- these are removed from the market and
fleet growth expected dence to make longer term plans, which the new aircraft begin service the MROs
for North Ameri- in turn led to the supply of hangar and will lose business.
can operators. The narrowbody fleet is engine slots tightening. During the sec- MRO Global asked Chris Doan, chair
expected to grow in the next five years ond half of calendar 2011 the positive and chief executive of Team SAI, what he
while the widebody and regional jet fleet impact of capacity discipline has been thinks is in store for the US market over
contracts over the same period. Team more than offset by economic woes, caus- the next five to 10 years. “We definitely
SAI estimates a negative 0.3% com- ing a fresh slowing of passenger demand see the phenomenon of new aircraft
pound annual growth rate from (CAGR) that might yet lead to additional parked taking less maintenance requirement,”
2011 to 2016 overall followed by a posi- aircraft in the near term during winter he says. “We see a very black market for
tive 1.4% CAGR from 2016–2021. The 2011/12. the Americas for the next 10 years, with
current environment means operators Aircraft age ranges and the effect on very low growth. And no growth in the
are unlikely to bring back most parked the North American maintenance market fleet; maybe a small loss in the fleet size
aircraft into service, greatly reducing the over the next five to 10 years will be pro- as consolidation continues in the US air-

54 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AMERICAS

the way airplanes are managed.”

AMERICAS MRO
Delta TechOps seem to be weather-
ing the storm well. Tim Bolt, marketing
manager of Delta TechOps told MRO
Global: “This has been a solid year for our
MRO business. We’ve experienced strong
current-year and long-term growth. Ear-
lier this year, we announced two unique
partnerships. In February, Delta TechOps
announced it was entering into an exclu-
sive MRO partnership with GOL. As part
of the five-year deal, Delta TechOps will
provide engine overhauls for a minimum
of 50% of GOL’s CFM56-7 engines and
maintenance services for various parts
and components on GOL’s fleet of Boe-
ing 737NG aircraft. In addition, Delta
TechOps is providing consulting services
related to maintenance workflow plan-
ning, materials and facility optimisation,
and tooling support, and will assist GOL
with its efforts to secure FAA Part 145
Repair Station Certification. In August,
we announced we are forming a main-
tenance joint venture with Aeroméxico,
which will help us expand our global
footprint into the Mexican and Latin
American markets. It will enable us to
provide our customers in these regions
with a maintenance facility that is near
by, provide cost savings to Delta, and at
that same time allow us to explore fur-
ther leveraging the high-quality airframe
maintenance work that Aeroméxico
provides Delta today. Both of these part-
nerships are great examples of how we are
looking at creative opportunities to grow
our MRO business going forward. We can
no longer rely solely on organic growth.
This partnership with Aeromexico will
help us to grow our global presence in
Latin America and Mexico while also
line industry. When you look at the order over the past – if we roll the clock back forging ahead toward our goal to achieve
books and what the US carriers have 20–30 years – many of the major carri- $1 billion in annual sales.”
ordered, there is not a very clear picture ers did their own maintenance and also When asked if the past few calendar
at the moment. Most of the new engine customised their MRO programmemes months of 2011 have seen a downturn
aftermarket business is being captured significantly. Now, when the predomi- in business, Bolt stated that “many air-
by the original equipment manufacturers nance is towards outsourcing, the lines are reducing capacity and parking
(OEMs) by design, so that is not an easy differences actually create a problem. The aircraft. This ultimately means reduced
play for an independent engine shop. The lessors feel this more acutely because they maintenance demand and greater com-
newer engines, unlike the airframes, are deal with multiple carriers and even more petition for the remaining opportunities.
going to cost a little more to maintain and now that airplanes are being moved more We are monitoring demand very closely,
the components are also being captured often between carriers. One of the bene- however; at this time we have not seen
by the OEMs.” fits of the dominance in the lessor market a downturn.” Maybe this is the calm
When asked about aircraft lessors’ is going to be a drive back to standardisa- before the storm for Delta Tech Ops; the
affect in the US MRO market, Doan says: tion. That is a win-win for everybody and picture will become more clear over the
“One of the things the industry is hav- it should even help bring maintenance next few months. What is certain is that
ing difficulty with today is the fact that costs down and create more efficiency in Delta TechOps has had a successful 2011,

www.airlineeconomics.co Airline Economics: MRO Global 2011 55

AMERICAS

airlines is directly leading to an expan-

sion in maintenance facilities across the
US. Following the United/Continental
merger announcement in May 2010, the
two carriers established an integration
management department that quickly
realised there were substantial differ-
ences in terms of their capabilities specific
to maintenance and engineering. Conti-
nental had always maintained a deeper
infrastructure to support line mainte-
nance and airframe overhaul at Houston
and Orlando, whereas United had a very
large maintenance and engineering infra-
structure for component and engine
overhaul. That maintenance infrastruc-
ture is now being strengthened through
40 line support stations for the merged
company. There are now calls for new han-
gar space by 2013 at United’s Washington
Dulles hub, and at Continental’s Newark-
Liberty International Airport hub. Both
will perform widebody aircraft mainte-
nance checks. The combined company is
CHRIS DOAN, TEAM SAI also set to make significant investments
at the San Francisco, Chicago O’Hare and
bringing into play a significant foothold maintenance mainly in-house while the Denver facilities. Along with new han-
in Central and South America that will in AirTran fleet has outsourced mainte- gars, the airlines’ information technology
the event of a downturn pay dividends as nance. In the future, AirTran plans to infrastructure for maintenance and engi-
Delta will be able to be at the very fore- perform more comprehensive, interme- neering will be merged, but with the idea
front of competitiveness. diate type checks on the 717s at AirTran’s that the groundwork will be laid for a new,
The US airline merger rounds over the Atlanta facility, which now handles light, state-of-the-art system to be procured
past two years have not had a huge impact routine overnight (RON) maintenance from the commercial market. That process
on the MRO sector as yet as there have with an aim to Atlanta becoming a cen- is currently being planned on a two-phase
been few route cuts. The most dramatic tre of excellence for the 717, to include basis, which will take a few years to com-
of the mergers in terms of fleet differences engineering and planning functions to plete. At the moment United is using the
has to be the Southwest-AirTran merger. support its maintenance requirements. Amis (aircraft maintenance information
Southwest, running an all-737 fleet, has The merged airlines will continue to use system) platform while Continental is
to absorb AirTran’s 88 717-200s. South- AirTran’s Orlando hangar for RON with using Sceptre. It is the plan of the merged
west therefore has to acquire the tooling, a view to extending this site to be a 737 airline to migrate all maintenance and
and expand technician training, to pro- C-check station. Southwest is moving engineering information to Sceptre during
vide the required level of support for the all maintenance-related IT into a single phase one, building in some of the Amis
717 fleet throughout the entire combined enterprise networking system and has capabilities. The second phase will involve
airline network. This means developing awarded TRAX the contract to merge the going to market to upgrade the system for
a broader intermediate level program- data sets of the two airlines, due mainly to the future, which will no doubt lead to the
meme for 717 maintenance, which will the fact TRAX is currently the data pro- door of Swiss Aviation Software and its
include more mechanical type work such vider for AirTran. Under a three-phase Amos system or indeed Trax.
as elective modifications and component programme, Southwest will move all The other more obvious fallout from
changes dictated by time requirements. maintenance-related data from Wizard the merger is that the maintenance and
Southwest’s total maintenance network to TRAX starting in the first quarter of engineering divisions have been working
will expand from 16 to 23 locations, 2012. The first phase will cover the 737- flat out on re-spraying aircraft and refit-
which includes seven AirTran facilities 800, while the second phase, scheduled ting the interiors to match the new livery
where overnight checks are performed. for the third quarter of 2012, will cover and layout for a common image. In 2012,
Southwest’s 16 locations include four the 717 and the 737-700. The 737 Classics the Continental fleet will be retrofitted
that perform major inspections. A big will be covered under the TRAX system with an Economy Plus section, while
difference between the two airlines’ main- by the third quarter of 2013. United’s 14 Boeing 767-300s will undergo
tenance organisations concerns heavy United/Continental is a different interior modifications for international
airframe inspections. Southwest handles matter. The merger of these two huge flights. Those interiors will be similar to

56 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AMERICAS

those on Continental’s international fleet.

The market is unpredictable at this
AMERICAS’ FLEET FORECASTS
time and preparation for 2012 is difficult 12,000 North America
for a third party MRO, with many not
Latin America and Caribbean
wishing to comment on how they plan to
Total
confront what 2012 might have to offer. 10,000 9,532
Delta TechOps, however, is confident it
8,508 8,590
has the global reach to weather any mar-
ket contraction. “Our plan is to continue 8,000 7,529
7,130 7,028
to expand on our partnerships in China,
Latin America and South America, and
continue to look for creative ways to 6,000
grow our MRO to achieve long-term
sales goals,” says Bolt. “We expect capac-
4,000
ity cuts will ultimately lead to increased
market pressure. We are well positioned
to provide maintenance solutions to our 2,003
2,000 1,378 1,562
airline customers that are looking for
maintenance CASM optimisation and
a more holistic maintenance approach. 0
For example, through our Complete 2011 2016 2021
Fleet Services (CFS) offerings, we are
able to provide truly nose-to-tail support
for our customers, leveraging our econo- AMERICAS’ MRO FORECASTS (US$MILLION)
mies of scale and operational excellence.
25 North America
Complete Fleet Services helps clients to
consolidate maintenance as well as plan Latin America and Caribbean
for future maintenance expenses and Total $20.3
reduce maintenance CASM spend.” 20
$18.2
Of course, as airlines come under $17.2 $16.7
increasing pressure, they will try to delay $15.5
$15.0
maintenance checks by parking aircraft 15
due for D-checks and replacing them
with new equipment. Delta is seeing evi-
dence of this, and when asked about the
10
phenomenon Bolt stated: “This has been
going on over the past few years. Many
assets are at a point where the mainte-
nance has to be completed or the aircraft 5 $3.7
have to be parked. This is both a chal- $2.7
$2.1
lenge and opportunity.” So, bearing this
in mind, are some airlines parking air- 0
craft that are due a D-check and simply 2011 2016 2021
using new deliveries to cover for them?
Bolt says: “Yes, as an airline MRO we are
very familiar with this strategy. Delta, for COMPOUND ANNUAL GROWTH RATES
example, recently announced it will be
acquiring Boeing 737-900s to replace our Fleet NA LA&C Total
older, narrowbody fleet (DC9s).” 2011 –0.3% 2.5% 0.2%
The options for airlines in the US are
2016 1.4% 5.1% 2.1%
numerous – they can simply park aircraft
before a D-check and lease an aircraft or 2021 0.5% 3.8% 1.1%
have one delivered new. This is a worrying Total MRO NA LA&C Total
trend for the MROs, and one that should
be watched in 2012. There is likely to be 2011 0.6% 5.0% 1.2%
a marked increase in this type of action 2016 1.5% 6.3% 2.3%
by airlines as they move to cut costs on
2021 1.0% 5.7% 1.7%
maintenance and fuel.

www.airlineeconomics.co Airline Economics: MRO Global 2011 57

AMERICAS

AAR
AAR is a leading provider of products,
services and innovative solutions for
commercial passenger airlines, cargo car-
riers, tier-two suppliers and aircraft and
engine OEMs. AAR leverages its diverse
MRO, engineering, logistics and fabri-
cation capabilities to offer customised,
integrated solutions that lower costs,
increase asset availability and ensure
high levels of quality, safety and service.
Services are performed by highly expe-
rienced, customer-focused engineers,
technicians and experts that leverage
world-class training, technologies and
techniques. AAR products are designed
to meet customers’ exacting specifica-
tions and offer lasting performance.

MAINTENANCE, REPAIR AND OVERHAUL

AAR provides aircraft overhaul and modi-
fications, landing gear services, wheel and
brake services and component repair for
the world’s major, regional and cargo
airlines, as well as for aircraft leasing com-
panies and government/defence agencies.
With facilities located throughout the US, inventory management, on-site ware- meet changing economic models, route
AAR is the second largest independent house management, consignment and systems and passenger preferences.
MRO provider in North America and lease-back programmes, repair manage-
ranks among the top 10 in the world. ment, repairs and exchanges, as well as AEROSTRUCTURES & MANUFACTURING
AAR offers a full array of component PMA parts development, parts provi- SERVICES
repair, overhaul, exchange and replace- sioning and parts trading. Additionally, AAR designs and manufactures cargo
ment options tailored to meet individual AAR maintains one of the industry’s systems used on commercial cargo and
customer requirements and designed largest and most complete inventories military transport aircraft around the
to improve efficiency and reduce over- of airframe parts, stocking new and ser- world. AAR holds 95 Supplemental Type
all costs. AAR’s expert technicians test, viceable components for virtually every Certificates (STCs) with the FAA for the
diagnose, repair, overhaul and perform commercial aircraft type. A300, A310, A330, B747, B767 and MD-11
scheduled maintenance on avionics, AAR is the leading independent commercial aircraft with systems for the
instruments, pneumatics, hydraulics, supplier of engine components and B737, B757 and A320 in development.
electronics, fuel controls and electrical inventory management services, supply- AAR is a single-source provider of
accessories. ing parts for virtually every commercial composites engineering and manufactur-
AAR offers high-value engineering power plant including General Electric, ing services to defence, commercial and
support services to supplement custom- IAE, Pratt & Whitney and Rolls-Royce. business aircraft markets. AAR designs
ers’ internal capabilities. Experienced AAR provides aircraft engines for sale or and fabricates advanced interior and
Designated Engineering Representatives lease to lower customers’ operating costs exterior composite structures as well as
(DERs) and Designated Airworthi- and keep aircraft in service during engine specialised molded components.
ness Representatives (DARs) plan and maintenance cycles. AAR performs precision machining,
execute a wide range of projects, from AAR sells and leases aircraft and has fabrication, welding and engineering for
engineering new solutions to designing an experienced team of professionals a wide range of high-end sub-systems
and executing modifications and attain- that provide start-to-finish guidance and components for aircraft and indus-
ing airworthiness approvals. in aircraft sourcing, purchasing and trial applications. AAR manufactures
remarketing. AAR also offers techni- hundreds of structural components for
LOGISTICS AND PARTS SUPPLY cal advisory services and innovative business jets including aircraft wing fit-
AAR provides high-value parts-related financing solutions to assist customers tings, crank assemblies, upper rails and
services that include supply chain and with adjusting their fleet composition to engine mounts.

58 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AMERICAS

Delta TechOps
Delta TechOps has a unique competi-
tive advantage as an airline MRO to
provide something most other MROs
can’t – operational improvement con-
sultation based upon Delta’s 80-plus
years’ experience as an operator. Delta
TechOps currently operates and main-
tains a fleet of nearly 800 airplanes for
Delta Air Lines and supports the air-
craft and engines of over 150 customers
worldwide. This has allowed the MRO
to develop unparalleled operational
and process knowledge and intellectual

Photo: Boeing Corp

property on a real-world basis.
It takes unsurpassed technical know-
how, a global network of experts and an
unwavering commitment to excellence to
maintain the world’s largest airline. And
that’s just what Delta TechOps delivers –
to airline operators all over the world. make up the Delta Air Lines fleet. Backed Technical Operations Centre, the 2.7 mil-
With more than 8,500 technical oper- by the proficiency and attention to detail lion square foot (about 250,830 square
ations employees system-wide, Delta found in Six Sigma and Lean processes, meters or the size of 47 football fields)
TechOps provides full-service mainte- Delta TechOps delivers industry-lead- base of operation.
nance to the more than 750 aircraft that ing operational efficiency, quality and
responsiveness to more than 150 other CERTIFIED PERFORMANCE
Delta TechOps is the largest airline MRO operators around the globe. Delta TechOps is a certified repair station
in North America and the third largest Delta TechOps’ Complete Fleet™ in the US (FAA) and the European Union
worldwide. Delta TechOps serves more Services include engine/APU, compo- (EASA), as well as in several countries in
than 150 aviation and airline customers nent, airframe and line maintenance, South America and Asia.
from around the world, specialising in full Airbus services, and extended engine  NL:3?::&*+*<^kmbÕ\Zm^]:bk
high-skill work such as engines, compo-
capabilities that include the CFM56-5 Carrier No. DALA026A
nents, airframe and line maintenance.
Additional Delta TechOps services and CF34-8C. Delta TechOps also pro-  NL:3?::&*+*<^kmbÕ^]K^iZbk
include compliance and quality assur- vides outside operators with technical Station No. DALR026A
ance, engineering, NDT, on-wing, AOG, training, engineering support and inven-  NL:3?::&*-.<^kmbÕ^]K^iZbk
test cell, engine leasing, MBK, training, tory management. Station No. DALR026A
inventory and exchange services. Delta TechOps’ instructors keep their  >N3>:L:&*-.<^kmbÕ^]K^iZbk
expertise on the cutting edge by pursu- Station No. EASA.145.4380
AIRFRAMES SERVICED ing continued education, training and  BLH2))*3=^emZM^\aHil
Airbus: A318 A319, A320, A321, A330 advanced computer knowledge. The aver- Component Maintenance,
Boeing: B737 (Classic, NG), B747, B757,
age length of service for a Delta TechOps No. CERT-0025376
B767, B777, MD-11, MD-80,
MD-90 aviation maintenance technician (AMT)
with an Airframe and Power Plant (A&P) SERVICES
ENGINES SERVICED certificate is 14 years. Delta TechOps is the largest airline MRO
Turbofan: CF34-3A/B, CF34-8C, CF6-80A/ To ensure prompt service and flex- in North America and the third largest
A2, CF6-80C2, CFM56-3, CFM56-5 CFM56- ibility, including technical dispatch worldwide. Delta TechOps serves more
7, JT8D-219, PW2000, PW4000-94 reliability greater than 97% fleet-wide, than 150 aviation and airline customers
Delta TechOps operates maintenance from around the world, specialising in
APUS SERVICED
facilities in multiple locations. Each of high-skill work such as engines, compo-
GTCP 131-9B, GTCP 331-200
these facilities offers light maintenance nents, airframe and line maintenance.
CERTIFYING AGENCIES for both narrowbody and widebody air- Additional Delta TechOps services
FAA, EASA, Argentina, Bermuda, Brazil, craft. Should emergency maintenance be include compliance and quality assur-
Canada, China , Chile, Indonesia, Korea, needed Delta TechOps’ quick-response ance, engineering, NDT, on-wing, AOG,
Trinidad & Tobago Disabled Aircraft Recovery Team (Dart) test cell, engine leasing, MBK, training,
can be dispatched from the Atlanta inventory and exchange services.

www.airlineeconomics.co Airline Economics: MRO Global 2011 59

AMERICAS

Aveos/ Evergreen
Aeroman EVA Air’s Engineering and Main-
tenance Division was spun off as an
independent corporation in Septem-



:=lZg]L;l
Bgm^kbhk^^\hgÕ`nkZmbhg
<hfihlbm^k^iZbk
Aveos has been carrying out heavy main- ber 1998 to become Evergreen Aviation  :`bg`Zbk\kZ_mbgli^\mbhg
tenance for more than seven decades. The Technologies Corporation (EGAT)  :obhgb\fh]bÕ\Zmbhgl
company, now acting as an independent, with General Electric Company (GE)  :bk\kZ_miZbgmbg`
is fast emerging as one of the leading as an equity partner. EGAT was tasked  Lmkn\mnkZefh]l
MROs in the Americas. With the addi- to uphold aircraft maintenance qual-
tion of Aeroman to the stable, the firm is ity and promote technical flight safety FLIGHT LINE:
able to cover all the Americas. while creating adequate business value. Providing customer support for all
In addition to airframe, engine, and EGAT has since evolved into a types of commercial aircraft:
component solutions, Aveos offers value- specialty, high business-value MRO,  >g`bg^\aZg`^l
added maintenance solutions such as undertaking mega-scale modifications  ;kb]`bg`\aZg`^l
aircraft maintenance training and supply such as the Dreamlifter in partnership  :Zg];\a^\dl
chain management as part of an inte- with Boeing, as well as engaging in  ?eb`am\hgmkhekb``bg`
grated offering, in turn ensuring efficient complete Section 41 skin replacements,  :bk\kZ_mfh]bÕ\Zmbhgl
demand, process and vendor manage- Horizontal Stabiliser skin replace-
ment. Aveos fleet management experts ments, and executing AOG recovery AOG DROP-IN AND TDY SERVICES
allow customers to focus on their core repairs on any portion of the airframe TEAM
competencies by providing tailored ser- structure.
vices that optimise carriers’ maintenance EGAT’s robust management sys- STORAGE:
programmes and operational reliability. tems and processes the Oracle-based  +-&ahnkkhobg`l^\nkbmr
MRO System for engine overhauls,  :\mbo^Zg]iZllbo^ob]^hZg]fb\kh-
VALUE-ADDED SERVICES: corporate-wide Six Sigma deploy- wave perimeter surveillance
Inventory management: ment, human resource management,  :\mbo^ fZbgm^gZg\^ ikh`kZff^l
Planning levels and allotments job qualification, balanced scorecard, for stored aircraft and engines
Forecasting consumption and service product safety, knowledge manage-  =kr% ghg&\hkkhlbo^ ^gobkhgf^gm(
levels ment and e-commerce. climate: aircraft are held at a facil-
Inventory ownership and financing Commercial airlines, aircraft leasing ity in the dry southwest, the ideal
Procurement: companies, and leading government climate for maintenance and stor-
Sourcing, contracting and purchasing agencies entrust heavy maintenance age. They are sheltered from natural
Supplier management work to Evergreen Maintenance threats found in the rest of the US,
Warranty management Centre (EMC). Located in Marana, such as earthquakes, hurricanes and
Logistics: Arizona, the EMC is one of the largest tornado activity.
Warehousing full-service commercial maintenance,
Transportation and customs manage- repair and overhaul (MRO) facilities COMPONENTS:
ment in the US.  :\mnZmhk\rebg]^klZg]ebgdl
Airline operational support: Consisting of three maintenance  :obhgb\^jnbif^gm(Z\\^llhkb^l
24-hour emergency support for AOG hangars and a large maintenance flight  @^Zk[hq^l
Expediting support line, the EMC also operates the Pinal  Pa^^elZg][kZd^l
Air Park and its 6,850-foot runway  >g`bg^\hpebg`l
MAINLINE SERVICES: rated for Boeing 747-400 through 747-8  ?eb`am\hgmkhel
Supply chain management (inventory aircraft. With 20 million square feet of  Lmkn\mnk^l
management, procurement, logistics, ramp and storage area able to accom-  <hfihlbm^l
business support and airline operational modate up to 400 aircraft, the EMC is  Ar]kZneb\l
support) the largest commercial aircraft storage  Ig^nfZmb\l
Fleet management facility with heavy maintenance ser-  >g`bg^Z\\^llhkb^l
Engineering services vices in the world.
Regulatory compliance and audits PAINTING
Technical publications services AIRCRAFT MAINTENANCE:
Technical records management A318, A319, A320, A321 ENGINE SERVICES
Aircraft maintenance training  :%;%<%=\a^\dl All models – boroscope inspection,
Training solutions  <I<IZg]BLBI engine removal and reinstallation;LRU
 LLB=bgli^\mbhgl replacements.

60 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AMERICAS

PEMCO
Pemco specialises in airframe heavy Going forward, Dothan operations will be  =^o^ehif^gm Zg] fZgn_Z\mnk^ h_
maintenance, as well as interior recon- more focused on military fixed and rotor aircraft cargo systems
figuration, avionic and IFE upgrades, wing aircraft.  <Zk`hfh]bÕ\Zmbhgl
and structural and cargo modifications.  :bk\kZ_miZkmlZg]lniihkm
A leading aircraft MRO services pro- Tampa, Florida  L\a^]ne^]Zg]ngl\a^]ne^]fZbgm^-
vider for a wide variety of aircraft types, The modern five-bay facility, located on- nance
Pemco has maintenance bases in Tampa, line for most air carriers at the Tampa  >g`bg^^kbg`l^kob\^l
Florida, Dothan, Alabama and Cincin- International Airport, employs 700 people  K^iZbkl
nati, Ohio, as well as partner operations and can easily accommodate 12 narrow-  Ik^\blbhg\hfihg^gml
in Southeast Asia. Pemco is also one of body or six widebody aircraft lines in the  :obhgb\l
the world’s leading aircraft cargo con- hangars, plus an equivalent number on  Bgm^kbhkfh]bÕ\Zmbhgl
version providers with over 300 cargo the ramp. The facility offers a full range of
conversions across 26 models of cargo onsite backshops to support metal fabri- AIRCRAFT TYPES SERVICED INCLUDE:
aircraft. Its new 757 Combi and Freighter cation, seats, galleys, lavs, aerostructures   MK-+(0+L^kb^l
:
programmes are the latest additions to including standard composite repairs,  ;^^\a*2))=
Pemco’s cargo platform, where Pemco basic avionics, and limited paint.  ;h^bg`0,0%0-0%0.0%0/0%000L^kb^l
presently has four 757 cargo modifica-  :bk[nl:,+)(:,*2
tions in work, with more projects in the Cincinnati, Ohio  ;hf[Zk]b^k=Zla1L^kb^l*))%+))
making. To continue serving ExelTech’s existing 300
clientele and improve availability for  ;hf[Zk]b^k<KC+))(0))
PEMCO FACILITIES Pemco’s newest location, in Cincinnati,  > f[kZ^k >KC *,.(*-.  >&C^m
Dothan, Alabama Ohio, PemCo offers MRO service for 170/190 Series
Aircraft supported include: 737NG, 757, regional jets.  ?hdd^k?*))
767, A320, A310 and A330, as well as vet-  F\=hgg^ee =hn`eZl F=&1)(2)
eran models like the 737 Classics, DC-9, At the three US sites, PEMCO offers the Series
MD-80, B727, DC-10, MD-11, and A300. following services:  LZZ[,-)

TIMCO
TIMCO Aviation Services is one of the
world’s largest independent aircraft
MRO providers. TIMCO provides air-
frame MRO and modification services
from three multi-hangar locations in the
US: Greensboro, North Carolina, Macon,
Georgia and Lake City, Florida.
TIMCO’s services cover light and
heavy scheduled maintenance checks,
exterior and interior modifications
installations, upgrades and conversions
for commercial, government and private
aircraft. The airframe MRO operation
employs over 1,000 mechanics – many of services across its growing network. HPC disk overhaul. In addition, AOG
whom are certificated – and uses nearly TIMCO’s Engine Centre provides teams can be sent on field service calls
1.5 million square feet of hangar and full engine disassembly (tear down), to perform engine on-wing support and
office space at its three locations. inspection, repair, parts overhaul and recovery services.
TIMCO LineCare offers a range of line reassembly (build up) services. The The TIMCO Engine Center is an FAA
maintenance and non-technical support engine team at the Oscoda, Michigan certified repair station (T48R384Y) with
services under FAA Operations Speci- facility provides complete non-destruc- focus on complete support for the JT8D
fication D107 certification at a growing tive testing (NDT), engine AD series of engines, as well as disassem-
number of airports. compliance, fuel nozzle overhaul, bleed bly and parts inspection services for the
TIMCO LineCare performs a range of valve overhaul, gearbox overhaul and CFM56-3.

www.airlineeconomics.co Airline Economics: MRO Global 61

AMERICAS

MRO Directory: Americas

HEAVY MAINTENANCE DIRECTORY - AMERICAS
COMPANY CONTACT DETAILS AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

AAR Aircraft Services Chris Jessup CRJ100, 200, 700 All MPD/MSG2/MSG3 2 hangars Welding, NDT, complete backshop,
Hot Springs VP commercial MRO sales & mktg Dash 6 All MPD/MSG2/MSG3 55,726sq ft machine shop, airframe comp.
PO Box 52-2602 EMB120 series All MPD/MSG2/MSG3 repair, composites, int. refurbs,
Miami, FL 33152 BE1900 series Engineering services, Aircraft mods,
5300 NW 36th Street - Building 850 Interior refurbs
Miami, FL 33122
Tel: 786-265-4288
Fax: 305-871-5388
AAR Aircraft Services Chris Jessup 757/767 All MPD/MSG2/MSG3 10 bays Welding, NDT, complete backshop,
Indianapolis VP commercial MRO sales & mktg 737 Classic & NG All MPD/MSG2/MSG3 1.2 million sq ft machine shop, airframe comp.
PO Box 52-2602 Airbus 319/320/321 All MPD/MSG2/MSG3 repair,
Miami, FL 33152 727 All MPD/MSG2/MSG3 composites, int. refurbs, Engineering
5300 NW 36th Street - Building 850 MD-80 All MPD/MSG2/MSG3 services, Aircraft mods, Exterior/
Miami, FL 33122 DC9-10/50 All MPD/MSG2/MSG3 interior refurbs, Paint
Tel: 786-265-4288
Fax: 305-871-5388
AAR Aircraft Services Chris Jessup 717 All MPD/MSG2/MSG3 3 hangars - 9 A/C slots Welding, NDT, complete backshop,
Miami VP commercial MRO sales & mktg 727 All MPD/MSG2/MSG3 226,000sq ft machine shop, airframe comp.
PO Box 52-2602 737 Classic & NG A & B Checks Only repair, composites, int. refurbs,
Miami, FL 33152 747 All MPD/MSG2/MSG3 Engineering services, Aircraft mods,
5300 NW 36th Street - Building 850 757 All MPD/MSG2/MSG3 Exterior/interior refurbs, Paint
Miami, FL 33122 767 All MPD/MSG2/MSG3
Tel: 786-265-4288 MD-90 All MPD/MSG2/MSG3
Fax: 305-871-5388 MD-80 series All MPD/MSG2/MSG3
DC-8 All MPD/MSG2/MSG4
DC-9 All MPD/MSG2/MSG5
A300 All MPD/MSG2/MSG6
A320 Family All MPD/MSG2/MSG7
AAR Aircraft Services Rick Townsend 737NG All MPD/MSG2/MSG3 7 hangars FBO services, Dowty/Hartzell/
Oklahoma VP sales, mktg & cust. Support 707-300 All MPD/MSG2/MSG3 300,000sq ft McCauley, prop repair capabil-
6611 S. Meridien 727 series All MPD/MSG2/MSG3 ity, brakes, airframe comp. rep,
Oklahoma City 737-200/-300/-400/-500 All MPD/MSG2/MSG3 composites, welding/NDT, Exterior/
OK 73159 USA CRJ200/700/900 All MPD/MSG2/MSG3 interior refurbs, Aircraft & avionics,
Tel: 405 218 3033 DC-9 series All MPD/MSG2/MSG3 Aircraft mods
Fax: 405 218 3614 Dornier 328P/J All MPD/MSG2/MSG3
MD-90 All MPD/MSG2/MSG3
MD-80 series All MPD/MSG2/MSG3
SF340 A/B/B+ All MPD/MSG2/MSG3
Aeroframe Services Bruce Campbell A300 A,B,C,D 5 hangars able to induct a/c Letter checks, hvy maint. repairs,
Headquarters located in: Director of sales & marketing A310 A,B,C,D as large as A340/747 overhauls,
Lake Charles, LA 1945 Merganser Street A318/A319/A320/A321 A,B,C,D 2 bays fully equip for strip/paint strip & paint, sheet metal, preserva-
Chennault Airpark (KCWF) A330 A,B,C,D 12 w/b bays will accommodate tion/storage,
Airepairs Lake Charles, LA 70615 A340 A,B,C,D up to 16 n/b aircraft with a total A/C parking, teardown,
Subsidiary located in: Tel: 337 312 2672 DC-10/KC-10 A,B,C,D area of 650,000sq ft mods/completions, Aeroframe
EO’s, Memphis, TN Fax: 337 312 2699 MD-10/MD-11 A,B,C,D 100 acres of ramp space. electrical, hydraulics, CPCP,
E-mail: [email protected] SSI, STCs, SB’s, AD’s,
www.aeroframe.com Airepairs capabilites 120,000sq ft of shop, and EA’s, ageing , engineering,
www.airepairs.com include all of the above support 30,000sq ft of climate- L/G replacement, struct. 717,
plus: controlled 10,700 ft-long 727, 737, 747, warehouse
Lear 35/36, CRJ-100, runway Facilities repairs, IFE,
757, 767, 777, DC-9 avionics, field support, backshops,
CRJ-200 composites, machining,
manufacturing, welding, NDT,
borescope, calibration, batteries,
firebottles, FAA/EASA 145, ISO9100
AA-MRO John Marshall A300 A,B,C,D 8 w/b, 13 n/b Tulsa Aircraft mods, Landing gear, APUs,
(American Airlines) Director, maint. mktg 737 A,B,C,D 6 w/b Alliance Fort Worth Engine repairs & overhauls, Field
3900 N Mingo Rd 757 A,B,C,D 2 - 4 w/b, 10 n/b & line maintenance, Landing gear,
Kansas City, MD 284 767 A,B,C,D Avionics, APUs, Wheels & brakes,
Tulsa 777 A,B,C,D Component repair & overhaul, Floor
OK 74116 USA MD-80 A,B,C,D boards, Composites, Calibration lab
Tel: 816-891-4049 Leasing - engines
Cell: 816-729-1369
Fax: 816-891-1817
email: [email protected]
www.mro-aa.com
Associated Air Center Gene Carter 707 A,B,C,D 3 hangars for w/b & n/b aircraft Interior modifications, Avionics
Director of maintenance sales 727 A,B,C,D upgrades, New avionics systems,
8321 Lemmon Ave 737 A,B,C,D In-flight entertainment, STCs, CPCP,
Dallas TX 75209 747 A,B,C,D Structural repairs, NDT
Tel: 972 559 7040 757 A,B,C,D
Fax: 214 351 2375 767 A,B,C,D
DC-8 A,B,C,D
DC-9 A,B,C,D
MD-87 A,B,C,D
A319 A,B,C,D
A320 A,B,C,D

62 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AMERICAS

HEAVY MAINTENANCE DIRECTORY - AMERICAS

COMPANY CONTACT DETAILS AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

Aveos Gaetan Roberge A310 A,B,C,D Montreal - 4 lines Modifications & cabin, Conversions,
Director, sales A319/320/321 A,B,C,D Toronto - 1 line (paint) avionics, Upgrades, landing gear,
PO Box 6000 A330/A340 A,B,C,D Winnipeg - 5 lines Composite repairs, CPCP, Hushkit-
Station Airport 767 A,B,C,D Vancouver - 4 lines ting, Interiors, Inventory manage-
Dorval, Quebec El Salvador - 4 lines ment, NDT. Strip/paint, SATCOM/IFE
H4Y 1J9 Canada
Tel: 514/856-6754
Cell: 514/928-7501
E-mail: [email protected]
ATS – AviationServices 3100 112th St SW 737/BBJ A,B,C,D 8 widebody bays Paint/Strip (n/b & w/b), CPCP,
Technical Services Everett 747 A,B,C,D 1,000,000sq ft of hangar, Avionics upgrades, VIP Mods, Post
WA 98204 USA 757 A,B,C,D backshop & office space Delivery Mods, Engineering Ser-
Tel: 425 423 3604 767 A,B,C,D vices, Technical Publications, Cargo
Fax: 425 423 3508 777 A,B,C,D Conversions, Component Repair &
A320/Airbus CJ A,B,C,D Overhaul, Composites Winglets STCs
DC-9 A,B,C,D
DC-10 A,B,C,D
MD-80 A,B,C,D
All Phase Checks
Cascade Aerospace Ramsey Sarkis 737 A,B,C,D n/b & commuter spaces Major modifications, Avionics
Director planning DHC-8 A,B,C,D upgrades, IFE, STCs & Engineering,
1337 Townline Rd C-130 All Structural repairs, Component
Abbotsford overhaul, Cargo conversions
British Columbia
V2T 6E1 Canada
Tel: 604 850 7372
Fax: 604 557 2655
Certified Aviation Services Jim Anderson 737 A,B,C,D 54,0002 hangar Custom modifications, Seating
Director business development 767 A,B,C,D 10,000ft runway reconfiguration, Passenger/cargo
Installation & Modification Group A320 A,B,C,D ILS approach conversion, Engine and landing gear
105 S. Leland Norton Way, C-130 A,B,C,D No curfews conv. Conversion of civilian aircraft
Ste. 1 Bldg. S795 DC-8 A,B,C,D Full paint facility to, Optionally piloted vehicles
San Bernardino, CA 92408 DC-9 A,B,C,D (OPV), In-flight entertainment (IFE),
Tel: 909-382-3487 L-1011 A,B,C,D installation.
Fax: 09-382-2409 MD-11 A,B,C,D
www.certifiedaviation.com
Commercial Jet David M. Sandri 707 A,B,C,D 2 hangars Interiors, Strip/paint, CPCP SSID,
President 727 A,B,C,D 68,000sq ft Composites, Modifications, Avionics
Miami International Airport 737 A,B,C,D upgrades, 727/737 cargo conver-
Hangars 896 757 A,B,C,D sions, Sheet metal, NDT, Graphic
PO Box 668500 MD-80 A,B,C,D design, VIP config. TAWS/HF/GPS/
Miami, FL 33166 DC-8 A,B,C,D TCAS, ER fuel tanks
Tel: 305 341 5150 DC-9 A,B,C,D
Fax: 305 871 0076
E-mail: [email protected]
Coopesa Rodolfo Solis A320 C,D 6 n/b Ageing mods/struct. Rep, CPCP/
Director, sales & marketing 727 C,D,MSG-3 86,000sq ft SSID, 727 cargo conversions, CPCP,
300 Mts Oeste 737CL C,D,MSG-3 Flight controls/ composites, GPS,
Aeropuerto Intl Juan Santamaria 737NG C,MSG-3 TAWS, DFDR, AFIRS, Hushkitting,
San Jose 757 C,D Interiors refurbish & paint, NDT,
Costa Rica DC-9 C,D,MSG-3 strip/paint, TCAS, w/shear,ELTt
Tel: (+506) 2437 2830 / 2828 MD-80 C,D,MSG-3
Fax: (+506) 2437 2829 / 437 28 01
E-mail: [email protected]
Delta TechOps Jack Turnbill 737 A,B,C,D 16 bays - Atlanta Full support repair facility, Comp.
VP technical sales and marketing 757 A,B,C,D 1 bay - Salt Lake City & inventory support, Engine/APU
Dept 460, 1775 Aviation Boulevard 767 A,B,C,D 1 bay - Cincinnati repair & overhaul, Eng. condition
Atlanta 777 A,B,C,D 1 bay - Boston monitoring, Strip/paint, Tech. train-
GA 30354 USA MD-80/-90/-11 A,B,C,D ing & eng supp, Disabled aircraft
Tel: 404 714 4949 recovery, Structural repairs
Fax: 404 714 3281
E-mail: [email protected]
Empire Aero Center David O’Neill or Rob Tilson 707 A,B,C,D w/b and n/b Interiors, Seat Overhaul, Ageing a/c
Director sales and marketing 727 A,B,C,D 12 bays mods, CPCP, Avionics & upgrades,
394 Hangar Road 737 A,B,C,D 500,000sq ft Painting, Winglet Modification, IFE
Rome 747 A,B,C,D hangar area Modification
NY 13441 757 A,B,C,D 225,000sq ft
Tel: 604 512 4550 or 514 755 7676 DC-8 A,B,C,D ramp space
Fax: 315 838 1515 A319, A320, A321, A330 A,B,C,D
MD-80 A,B,C,D
DC-10 A,B,C,D
Evergreen Maintenance Steve Coffaro 727 All MPD/MSG2/MSG3 5 Bays-110,000sq ft CPCP & SSID, component, overhaul,
Center VP sales & marketing 737-200/-300/-400/-500 All MPD/MSG2/MSG3 NDT, strip/paint, training, storage/
Pinal Air Park, 737NG All MPD/MSG2/MSG3 parking, teardowns, letter checks,
MARANA, AZ 85653-9501 USA 757/767 All MPD/MSG2/MSG3 avionics upgrades, structure repairs,
Tel: 520 682 4181 Ext 5061 747-Series All MPD/MSG2/MSG3 composite repairs, interiors, struc-
Fax: 520 616 5065 777 All MPD/MSG2/MSG3 tural repairs, VIP Corp Mx Services
E-mail: [email protected] DC-9/MD-80,MD-90 All MPD/MSG2/MSG3
DC-10/MD-11 All MPD/MSG2/MSG3
A320 All MPD/MSG2/MSG3

www.airlineeconomics.co Airline Economics: MRO Global 2011 63

AMERICAS

HEAVY MAINTENANCE DIRECTORY - AMERICAS

COMPANY CONTACT DETAILS AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

ExelTech Aerospace Donald Kamenz ATR 42 A,B,C,D 3 hangars - 16 line of HVY Maint Avionics, composites, CPCP, field
VP marketing & sales ATR 72 A,B,C,D & one 40,000sq ft line maint & line maintenance, Interiors
1200 Pitfield Rd CRJ 100/200 A,B,C,D facility refurbishment, Inventory manage-
St.Laurent, Quebec CRJ 700/900 A,B,C,D 290,000sq ft hvy maint ment, Land gear remov. & replace,
H4S 1A0, Canada DHC-8-100/200 A,B,C,D (26,955sq m) Modifications, Sheet metal, STCs,
Tel: 514 631 8999 x 5114 DHC-8-300 A,B,C,D 240,000 sq ft Exterior Component painting, Structural
Fax: 514 631 7437 DHC-8-400 A,B,C,D storage/parking repairs, NDT
[email protected] SF340 A/B/B+ A,B,C,D
www.exeltech-aerospace.com EMB 145 series A,B,C,D
737 series A,B,C,D
E170/175 A,B,C,D
E190/195 A,B,C,D
CL-215 A,B,C,D
First Air Maintenance Rashwan Domloge 727 A,B,C,D 17 commuter; 8 n/b Interiors, Modifications, STCs, Avion-
Services VP maintenance and engineering 737 A,B,C,D 2 hangars ics, CPCP
20 Cope Drive HS748 A,B,C,D total area: 18,000m2
Kanata, Ontario C-130/L-100 A,B,C,D
K2M 2V8 ATR 42-300 A,B,C,D
Canada A,B,C,D
Tel: 613 254 6282
Fax: 613 254 6398
Hamilton Aerospace Gordon Hamilton 727 A,B,C,D 3 n/b Cargo conversions, Strip/paint/
Technologies CEO 737 A,B,C,D 4,800m2 refinish, Interiors, CPCP, SSI, Avionics
6901 S Park Avenue DC-9 A,B,C,D new east coast office upgrades, Hushkitting
PO Box 11746 MD-80 A,B,C,D
Tucson
AZ 85734-1746 USA
Tel: 520 294 3481
Fax: 520 741 1430
Mexicana MRO Hector Cobo A318 A,C,D,E Mexico City Maintenance Base Modifications, AD, SBs, SLs
Services Third party maintenance director A319 A,C,D,E with: Heavy maintenance Aging, SSI & CPCP, Major comp. re-
Av 602, #161 A A320 A,C,D,E Main hangar with 97,951ft2 for placement, NDT, Line maintenance
Col. San Juan de Aragon A321 A,C,D,E 1 w/b & 3 n/b or 4 n/b. in more than 40 locations, Painting,
Del. Venustiano Carranza A330 A,B,C,D Painting hangar with 45,208ft2. Avionics and electrical, ATEC 5000 &
Mexico City, 15620 727 A,B,C,D Exterior platform with 6000, Communications Sheet metal
Mexico 737 A,C 1,568,237ft2 for more than Instruments, Hydraulic, fuel, oil,
Tel: (+5255) 57 86 65 34 757 A,C,D,E 40 A/C. pneumatic & accesories shops, Com-
Fax: (+5255) 57 62 15 42 767 A,B,C,D Apare parts with 22,605ft2 posite repairs Interiors Emergency
Email: [email protected] F100 A,B,C,D werehouse. equipment, Cargo conversion,
DC-9 A,B,C,D Guadalajara City Maintenance Hushkitting Engineering services,
MD-80 A,B,C,D Base with: Main hangar with A/C Parking Training
Bombardier CRJ200 A,B,C,D 53,206ft2 for two n/b Exterior
platform with 1,002,647.5ft2
Panama Aerospace Stephen Lim 737 A,B,C,D Four hangars, 12 n/b aircraft Letter checks, CPCP Eos/SBs, modi-
Engineering (PAE) SVP marketing, Americas A320 A,B,C,D hangared simultaneously, fication Avionics, mod & upgrades
Building 241, Bryant Avenue E190 A,B,C,D 260,000sq ft NDT, Fabrication Composite, Shop
Howard, Panama Strip/paint, IFE/Interiors Completion
Tel : 210 854 9169
Fax : 210 293 2638
E-mail: [email protected]
PEMCO Kevin Casey 737 A,B,C,D 7 w/b & 10 n/b 737-300/400 Freighter, Quick
World Air Services President 747 A,B 543,000m2 Change & Combi, Conversions, CPCP,
Dothan, AL 757 A,B,C,D 2-3 w/b or 5-6 n/b Aging Aircraft, Paint/Strip, Avionics
100 PEMCO Drive 767 A,B,C,D 150,000sq ft Tampa, FL Upgrades, Interior Reconfiguration,
Dothan DC-8 A,B,C,D Seats/Gally’s/Lavs, NDT, Composite
AL 36303 DC-9 A,B,C,D Repair Engineering
USA MD-80 A,B,C,D
Tel: 334 983 7000 DC-10 A,B,C,D
Fax: 334 983 7022 MD-11 A,B,C,D
E-mail: [email protected] A300 A,B,C,D
A320 A,B,C,D
Premier Aviation Dennis De Gonzague/David Hinchcliffe 727 A,B,C,D 130,0002ft facility Avionics, Composites, CPCP,
Overhaul Center Director of sales 737 A,B,C,D 9,000ft runway Structural repairs, Int. refurbs, Land.
3750 Airport Road 757 A,B,C,D No Curfew gear removal/replace, Modifications,
Trois-Rivieres, Quebec A310 A,B,C,D Full paint Sheet metal, Welding, STCs, Strip
Canada, G9A 5E1 A320, A319, A321 A,B,C,D Storage & Parking and paint, aircraft and components,
Tel: 819 377 4500 CL-215 A,B,C,D On site aircraft/records, inspection
Fax: 819 377 7717 CRJ 100/200 A,B,C,D
E-mail: [email protected] ERJ 170/190 A,B,C,D
www.premieraviation.ca DHC-8 100/300 A,B,C,D
Lockheed C-130 A,B,C,D
MD80, MD90 A,B,C,D
San Antonio Stephen Lim 727 A,B,C,D 6 hangars Letter checks, CPCP, EOs/SBs modi-
Aerospace (SAA) SVP marketing, Americas 737 A,B,C,D 560,000sq ft fication, Avionics mod & upgrades,
(a subsidiary of 9800, John Saunders Road 747 A,B,C,D 6 w/b and 7 n/b aircraft NDT, Fabrication, Composite shop,
Singapore San Antonio 757 A,B,C,D hangared simultaneously Strip/paint, Interior refurbishment,
Technologies Texas 78216 767 A,B,C,D IFE/Interiors Completion, VIP/Corp.
Aerospace) USA 777 A,B,C,D Jets/Head of State
Tel : 210 854 9169 A300, A310, A320 A,B,C,D
Fax : 210 293 2638 DC-9, DC-10 A,B,C,D
E-mail: [email protected] MD-11, MD-80 A,B,C,D
ERJ-135/145 A,B,C
CRJ-200/700 A,B,C

64 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AMERICAS

HEAVY MAINTENANCE DIRECTORY - AMERICAS

COMPANY CONTACT DETAILS AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

Seman-Peru Carlos Rodriguez DC-8 A,B,C,D 4 hangars Avionics upgrades, Standardisa-

General manager DC-10 A,B,C,D smallest has 1,250m2 tions etc, Composite repairs, CPCP
Avenida Coronel L-382 A,B,C,D largest has 4,900m2 - aging mods, Structural repair, NDI:
EP Edmundo Aguilar 727 A,B,C,D (accommodates 2 DC-8s) X-ray, ultrasonic, Eddy current, LP,
Pastor S/N 737 A,B,C,D MP Inspection, RVSM, TAWS, Paint-
Lima 4 stripping, Machining
Peru
Tel: (+511) 477 5570
Fax: (+511) 4 770877
Stambaugh M. R. Stambaugh Jr. All n/b a/c A,B,C,D 2 n/b 727 & 737 cargo, Door conversion,
Aviation Accountable manager 747 A,B,C 8+ commuter Interiors, Paint/strip, CPCP-Aging
1000 Jetport Road DC-10 A,B over 23,250m2 Mods, Avionics upgrades etc, Pro-
Brunswick totype work, NDI & Eng. Borescope,
GA 31525 USA Engine Management, VIP
Tel: 912-265-7244
Fax: 912-262-0225
ST Mobile Aerospace Stephen Lim 727 A,B,C,D 8 hangars Letter checks, CPCP, EOs / SBs modi-
Engineering (MAE) SVP marketing, Americas 737 A,B,C,D 671,000sq ft fication, Avionics mod & upgrades,
(a subsidiary of 2100 9th Street 747 A,B,C,D 8 w/b, 10 n/b aircraft NDT, Fabrication, Composite shop,
Singapore Brookley Complex 757 A,B,C,D hangared simultaneously Strip/paint, Interior refurbishment,
Technologies Mobile 767 A,B,C,D IFE/Interiors Completion, Pax-To-
Aerospace) AL 36615 USA 777 A,B,C,D Freighter Conversion, Inventory
Tel : 210 854 9169 A300 A,B,C,D management, Line maintenance
Fax : 210 293 2638 A310 A,B,C,D services, Power-By-Hour Support
E-mail: [email protected] A320 A,B,C,D
A330 A,B,C,D
DC-9, DC-10 A,B,C,D
MD-11, MD-80 A,B,C,D
TAP Maintenance and Ricardo Vituzzo 727-100200 A, B, C, D Rio de Janeiro Heavy Maintenance, Components
Engineering Brazil GM sales 737-200/300/400 /500 A, B, C, D Hangars: 1 Overhaul, Landing Gears, Engines &
&TUSBEB
EBT
$BOtSJBT

 737-700/800/900 A, C Hangar capacity: 4w/b APUs, Avionics, Hydraulics, Mechani-
21941-480 747-200/300 A, C, D Hangar Area: 14,500m2 cal Accessories, Pneumatics, Wheels
Rio de Janeiro / RJ 757-200 A, C Total Area: 250,000m2 and Brakes, Plating Shop, NDT, Paint-
Brazil 767-200/300 A, C Porto Alegre ing, Interiors, Calibration
Tel: (+55-21) 3383 2140 777-200 A, C Hangars: 5
Fax: (+55-21) 3383 2300 DC-10 A, C Hangar capacity: 1w/b, 5n/b
E-mail: [email protected] MD-11 A, C Hangar Area: 12,500 m2
www.tapme.com.br A300 A, C Total Area: 140,000 m
A300-600 C
A310 C
EMB120 A, C
ERJ145 A, C
F-50 12 years
TIMCO John Eichten 727, 737, 757, 767, 777 A,B,C,D 7 w/b Structural, Composites, Avionics,
Greensboro, NC SVP sales A300 / A310 A,B,C,D 14 n/b Modifications (int/ext), Maintenance
623 Radar Rd A320 series A,B,C,D 704,000sq ft covered programme, Planning, Avionics kit
Greensboro DC-8, DC-9 / MD80 A,B,C,D Avionics upgrades fabrication, Interiors, CPCP
NC 27410 USA DC-10 / KC-10 / MD-11 A,B,C,D Winglets
Tel: 336 668 4410 ext 3019 CRJ200/700/900 A,B,C,D
Fax: 336 665 9011 C130 A,B,C,D
E-mail: [email protected]
TIMCO John Eichten, SVP sales 707 / KC-135 A,B,C,D 11 bays maintenance Structural, Composites, Avionics,
Lake City, FL PO Box 1909 727 A,B,C,D 2 bays dedicated paint Modifications (int/ext), Cargo con-
5530 East Highway 737 A,B,C,D seven hangars versions, Interiors, Winglets
90 Lake City Airport 757 A,B,C,D 632,000sq ft covered
Lake City A320 series A,B,C,D
FL 32025 USA C130 / C141 / P3 A,B,C,D
Tel: 336 668 4410 ext 3019 DC-9 / MD80 A,B,C,D
Fax: 336 665 9011 DC-8 A,B,C,D
E-mail: [email protected] DC-10 / KC-10 / MD-11 A,B,C,D
TIMCO John Eichten, SVP sales 737 A,B,C,D 3 bays n/b up to 757 Structural modifications
Macon, GA Middle Georgia Regional Airport 757 A,B,C,D two hangars (int/ext), Avionics repairs
150 First Drive, PO Box 10136 A320 series A,B,C,D 116,000sq ft
Macon, GA DC-8 A,B,C,D NDT
31297 USA DC-9 / MD80 A,B,C,D
Tel: 336 668 4410 ext 3019
Fax: 336 665 9011
E-mail: [email protected]
United Airlines Paul Lochab 737 A,B,C 4 w/b bays FAA 121 operator, FAA 145 repair
(United Services division) MD sales, marketing & services 747 A,B,C 10 n/b bays station, Avionics, Engine overhauls,
Center - SFOUS United Services Maintenance 757 A,B,C 90+ line stations w/ line Landing gear, Components, APUs,
San Francisco 767 A,B,C network ISO 9000:2001 compliant, Engine
CA 94128 USA 777 A,B,C a 2.9-million sq ft test cell, Lease sale exchange, Global
Tel: 650 634 4269 A319 A,B,C facility in San Francisco emergency/AOG maint, Modifica-
Fax: 650 634 5926 A320 A,B,C tions IFE/interiors, Line maintenance
[email protected] services
Victorville Aerospace Julius Smith 717 A,B,C 2 w/b, 1 n/b Heavy Maintenance, Line Mainte-
Director sales & marketing 727 A,B,C 250,000sq ft nance, Modifications
18200 Phantom West 737 A,B,C Back Shops
Victorville 747 A,B,C
CA 92394 757 A,B,C
Tel: 760 530 1767 767 A,B,C
Fax: 760 246 5159 777 A,B,C
E-mail: [email protected] DC9, MD80 A,B,C
www.victorvilleaerospace.com DC-10, MD-11 A,B,C
A320, A330 A,B,C
L-1011 A,B,C

www.airlineeconomics.co Airline Economics: MRO Global 2011 65

MAINTENANCE

A320-FAMILY MAINTENANCE:
Airline Economics surveys the best maintenance providers for A320-family aircraft

revision was introduced, the response

was very favourable from airlines. Stu-
art Mann, Airbus’ director of product
marketing of the A320 family at that time
said: “Airlines love the extra flexibility
that MPD 28 gives them and, naturally,
they get the maximum time out of all the
components between overhauls.”
A popular maintenance option on
the A320 is the Airbus AIRMAN system,
which allows the aircraft to transmit
faults to the ground during flight. This
software tool enables the necessary
resources and maintenance personnel
to be in place when the aircraft touches
down and thus reduces the time the air-
craft spend not in revenue service.
Although unbundling the checks and
specifying three different usage param-

T
he A320 family can be cred- its launch. And Revision 28, which was eters for the individual tasks meant
ited for Airbus’ success as added to its Maintenance Planning Doc- more flexibility for airlines, it also posed
an aircraft manufacturer, ument (MPD) in November 2004, stated more challenges. Airbus acknowledged
particularly as it now enjoys that although daily and weekly checks this by introducing standard mainte-
one of the widest customer were still required every 36 hours and nance packages representing three
bases in aviation history. eight days, the tasks were split among common types of aircraft yearly utili-
Air France took delivery of the first three different sub-groups -- flight sation ranging from 1,800 flight hours
A320 in 1988 and since then the A320 hours, flight cycles or calendar time. annually to more than 3,500. Airlines
family – which includes the A318, A319, This gave the airline a great deal more were then able to choose the ready-
A320 and A321 – has amassed over 7,000 flexibility because the check intervals made solution that corresponded most
orders with more than 4,600 aircraft could be defined by the most appropri- closely to their yearly utilisation. Tak-
delivered to almost 330 customers and ate usage parameter for that carrier. ing the process further, some operators
operators worldwide. This impres- Maintenance glitches such as prob- have almost eliminated conventional C
sive sales record makes it the world’s lems with the air conditioning and checks by following an equalised main-
best-selling commercial aircraft and brakes have been ironed out and fly-by- tenance programme. This programme
therefore a maintenance cash cow. wire technology is fully accepted. Airbus distributes traditional A- and C-check
The introduction of the A320neo will is aware that airlines are constantly tasks among equal maintenance
have little effect on the aircraft type’s looking to reduce maintenance costs packages. Having applied it while main-
popularity as it has over 95% airframe and MPD Revision 28 allowed opera- taining the easyJet A320 fleet through
commonality with the existing models tors to extend the intervals between several years of growth, SR Technics
making it an easy fit into existing fleets. maintenance checks. A checks could be (SRT) says the equalised maintenance
The global A320 fleet continues to grow conducted every 600 hours (previously or E check concept reduces aircraft
at a rate in excess of 10% and this will 500 hours), C checks every 20 months downtime by a total of 17 days during a
increase as from Q4 2012 to 42 aircraft (previously 15 months) and heavy six-year period.
per month from the current 36. Pro- checks after six years and 12 years (pre- The E checks are sequenced into 36
duction rates will steadily rise to 38 in viously five and 10 years). Equalised labour packages, each requiring eight
August 2011 and to 40 in the first quarter checks that focus on optimised usage of hours of ground time, which can be per-
of 2012. each part have also been introduced. formed during a night stop. No C-checks
CSA Czech Airlines is an example of are required, and the six-year/24,000
Inspecting the A320 a carrier that has adopted the intervals flight hour intermediate layover (IL)
The A320s maintenance check intervals offered by MPD Revision 28 and so far it check is due around the time of the 36th
have been raised several times since is working well for them. At the time the E check.

66 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MAINTENANCE

The service package offered by SRT

consists of fleet technical management,
component and parts management,
E-check maintenance management
and line maintenance management.
The maintenance can be conducted at
an SR Technics facility or subcontracted
to the operator’s selected provider. SRT
says it has cut the average turnaround
time for the IL check, including strip-
ping and repainting of the fuselage and
vertical tail, from 21 to 14 days. “We
started together with Airbus to ramp up
the maintenance activity on the A320,”
says a source at SR Technics. “[This
included] the complete reshaping and
reorganising of the maintenance pro-
gram out of the traditional maintenance
program and into an aquiline mainte-
nance program. After six years we are
doing the E check in Malta but we have
started to do it in Zurich.”

Landing gear overhaul

Landing gear overhaul for the A320 fam-
ily is required every 10 years or 20,000
flight cycles, but the fatigue threshold
was increased from 20,000 to 24,000
flight cycles. The zonal check interval
has grown from five years to six, and the
requirement for structural inspections
has been relaxed from every 10 years
(originally eight) to every 12 years. The
result of that change, according to Air-
bus, was that each operator was able to
optimise the checks intervals according
to its own aircraft utilisation.
The number of landing gear over-
hauls required each year equates to
the number of 10-year-old aircraft in
the fleet. But A320 deliveries are still
accelerating. They climbed dramati-
cally from 168 in 1998 to 222 in 1999, then
stayed in the mid-200s before starting to problem analysis tools to optimise per- nical solution, however Shainin are
climb rapidly again in 2005 to reach 387 formance of its A318, A319 and A320 statisticians,” said Eric Papy of Airbus’
in 2008. Although the requirement over aircraft. Lateral trim solutions devel- Mise au Point (MAP) design office repre-
the next five years is relatively stable, oped by Airbus can decrease possible sentative team in Hamburg, Germany.
the growth of the overall landing gear drag, reduce fuel consumption and “They wanted very specific information
overhaul market has resulted in several optimise flight paths for its A318, A319 from PATS, from measuring aircraft on
overhaulers of A320 gears such as AFI and A320s. the final assembly line and the wings at
KLM E&M, Finnair, Lufthansa Technik The project made swift progress Broughton. It was statistical analyses
and Turkish Technic to enter the mar- using the data from Airbus’ Production that found the answer.”
ket. Aircraft Test System (PATS) – used to Shainin devised a mathematical for-
verify aircraft during pre-delivery pro- mula for predicting roll values for each
Upgrades - Airbus-developed lateral cesses – along with problem analysis aircraft ahead of its first flight, allowing
trim solutions tools from consultant company Shai- the MAP team to make any necessary
Airbus is using data from its Produc- nin. adjustments during assembly – virtu-
tion Aircraft Test System and additional “As technicians we expected a tech- ally eliminating the need for re-flights.

www.airlineeconomics.co Airline Economics: MRO Global 2011 67

MAINTENANCE

Maintenance cost per hour A320 Family Vote split by region

Middle East: 2%
Some of the most detailed studies of aircraft main-
tenance costs have been carried out on behalf of
maintenance: Americas: 32%

Eurocontrol’s Performance Review Commission,

which has been working for some years to estab- SURVEY RESULTS Europe: 43%

lish the marginal costs associated with air traffic

delays. Researchers from Westminster University, Airline Economics asked a selection of
Imperial College, London, and Lufthansa Systems A320 family operators from each region
Asia-Pacific: 22% Africa: 1%
found that unit maintenance costs, including an (airlines and lessors) who they thought
allowance for overheads such as administration were the best performing maintenance
and facilities, equated to approximately 15% of shops. Although the results, to an
block hour direct operating costs (DOC). extent, reflect the size of some opera- MRO players are able to offer services
tions there are a few surprises. And that are highly tailored to an individual
For the A320, the researchers concluded, mainte- when smaller market players enter the client’s needs. However, for the major-
nance cost per block hour in 2008 ranged between top ten, it is clear that they are doing ity, where airlines choose to have their
EUR570 and EUR770 for high and low cost sce- something right. These results also maintenance performed is dependent
narios, with a base figure of EUR620. The figures reflect the fact that some of the smaller on location, location, location.
for the A319 ranged from EUR580-800, with a
base of EUR630, while the A321 base costs were 2011 TOP TEN MRO FIRMS
estimated at EUR720 with a low of EUR660 and a 1 Lufthansa Technik 16.43%
high of EUR910. For comparison, the equivalent 2 ST Aerospace 13.01%
figures for the Boeing 737-800 were estimated to
3 SR Technics / ADAT 13.00%
range from EUR500 to EUR670, with a base figure
of EUR670. 4 TAP M&E / TAP M&E Brazil 11.12%
5 TIMCO 6.40%
6 Pemco 6.08%
Global A320 fleet by operator region
7 HAECO 4.18%
8 Aveos / Aeroman 3.84%
Asia-Pacific: 26% Americas: 29%
9 AFI-KLM Engineering & Maintenance 3.44%
10 Evergreen 3.08%

Africa: 1%

Middle East: 5%

Europe: 36%
Europe, Middle East & Africa (EMEA):
Methodology SURVEY RESULTS
2011 TOP TEN EMEA MRO FIRMS
Over 5,000 industry professionals globally were
asked: Which maintenance provider offers the best 1 SR Technics / ADAT 31%
service for the A320 Family taking into account 2 Lufthansa Technik 29%
costs, turnaround times, reliability and conve- 3 TAP Maintenance & Engineering 14%
nience? 4 AFI-KLM Engineering & Maintenance 8%
5 Iberia Engineering & Maintenance 5%
These results were then filtered by Airline Eco-
nomics so that only airline senior management, 6 OGMA 4%
re-marketers and lessors who have owned and/ 7 JorAMCo 3%
or operated A320 Family aircraft, appraisers and 8 Turkish Technics 3%
investors remained.
9 Monarch Aircraft Engineering 2%

The 2011 A320 Family Maintenance survey is 10 Finnair Technical Services 1%

therefore an accurate reflection of industry think-
ing at the very highest levels from decision makers MRO operations, whether airline-affil- more inclusive services to make fuller
who are involved in the decision making process iated, independent or OEM-operated, use of their capabilities and resources
during the course of an aircraft’s life. have responded to an increasingly while helping their customers contain
competitive environment by developing costs.

68 Airline Economics: MRO Global 2011 www.airlineeconomics.co

MAINTENANCE MAINTENANCE

Lufthansa Technik’s comprehensive regulations associated with the lease Turkey hopes this impressive base
suite of total support offerings covers agreement and to an extent this has will become a global MRO hub, but it is
landing gear, engines, components and slowed and amended their progress prudent to wonder about the future for
material, while overall Total Technical as time has passed. Even so SRT has the maintenance market in general. The
Support can be combined with Techni- been able to slash turnaround times current scenario is one of aircraft flying
cal Operations Management and the by shifting and amending the layout of to bases; having checks performed and
management Technical Operations its various workshops, it has put tech- collecting the aircraft all via non-rev-
Websuite. And at a time when cost nicians together with managers and enue flights. However, with oil prices
control is more crucial than ever, the client account managers, amended above $110 a barrel and Goldman Sachs
company says its Total Component Sup- layout in all areas to make the process urging investors to poor into oil with a
port (TCS) service provides what are seamless and linier and adopted an in benchmark of $200 by 2015, it is unlikely
normally mutually exclusive benefits: house program for staff and graduates that airlines will want to fly aircraft to
low costs, yet with the greater aircraft to develop new practices to help reduce distant maintenance centres and will
availability that normally demands turnaround times. opt for doorstep services. Such a trend
heavy investment in a big stock of Turkish Technic too has been build- will play into the hands of Lufthansa and
spares. ing up its capabilities in Istanbul; especially SR Technics as they expand
LHT says membership of its com- targeting operators in Europe, the to become global, independent MROs
ponents pool -- the equivalent of being Middle East, CIS and northern Africa through the future slated purchase of
part of a Boeing and Airbus fleet nearly as well as Turkey itself. The Turkish a US MRO supplier, possibly TIMCO.
400 strong -- reduces operating costs Airlines subsidiary is building a new Given this scenario, it is difficult to see
to a level normally achievable only by narrowbody MRO base, the HABOM how the future of very large MRO bases
operators of much larger fleets. The Aviation MRO Centre at Sabiha Gökçen like the one being developed at HABOM
service can be extended to include International Airport. The estimated can be assured. In the case of HABOM,
everything from writing the specifica- total investment requirement for the this will not be possible without a very
tions, initial provisioning studies and airframe and component maintenance large route hub being created out of
home base allocation to repair and centres on the whole is around $500 Sabiha Gökçen International Airport,
overhaul, troubleshooting, documen- million. By the year 2020, HABOM is which is not likely. But taking into the
tation and engineering services. And estimated to generate a $1 billion share account the size of the Middle East fleet
it is tailored to the operator’s specific from airframe and component main- on order, the managers of the HABOM
requirements. tenance segments. Turkish Technic project are hoping that they will be
Dublin Aerospace was awarded will be the permanent shareholder of well placed to cater to this ever-grow-
EASA Part 145 approval in October 2009 the HABOM Project. Turkish Technic ing market. But it is SRT, with its Abu
for its new maintenance and overhaul is also aiming to establish these new Dhabi Aircraft Technologies subsidiary,
operation in the former SR Technics investments as an international joint which seems best positioned to benefit,
Hangar 5 at Dublin Airport. Already venture with the participation of a lead- and further expansion of this site could
offering heavy maintenance on the ing global company or companies. With prove highly popular with the airlines of
A318, A319 and A320 and overhaul, and this new investment, Istanbul will be the the Middle East.
major refurbishment of the Honeywell maintenance hub of the region within a This train of thought is backed by
131-9[A] APU, the company achieved short time period if all goes to plan. The Lufthansa Technik’s Walter Heerdt,
A320 landing gear capability in 2010. The airframe maintenance centre facilities senior vice president marketing & sales.
company also offers on-wing repair ser- at Sabiha Gökçen International Airport When asked by Airline Economics why
vices, including seal changes and gear will have a total 372,000m2 area. There he thought the LHT network gives them
replacement, at any location. will approximately 3,500 employees an edge he said: “Lufthansa Technik’s
The Aer Lingus A320s that SRT used within all the maintenance, repair and Group network is definitely a big
to maintain at Dublin are now handled overhaul centres which will be estab- advantage. The size, geographi-
by Sabena Technics. lished within the HABOM Project. cal location and capability mix of our
SR Technics, the A320 maintenance
leader through their various agree-
ments which include Easyjet and
AirBerlin, has been trying everything it
can to cut turnaround times and costs.
The operation in Zurich has been a
particular headache for the manage-
ment. The buildings and hangers at
the SRT base in Zurich are not owned
but rented. This means that when SRT
came to streamlining its processes,
it had to factor in various building

www.airlineeconomics.co Airline Economics: MRO Global 2011 69

MAINTENANCE MAINTENANCE

eight overhaul facilities in Europe and that the mixture of our broad service ground times, for example just recently
Asia secure that most of the NB and portfolio, our world-wide network, the an A319 D-check was completed in 16
WB aircraft can be serviced close to high quality and the motivation of our days. The Lufthansa Technik produc-
the customers home base. The size of employees are guarantees for our suc- tion processes have been standardized
the network guarantees slot flexibility cess. throughout the facilities by analysing
and capacity, which enable LHT to offer Lufthansa Technik is continuously and optimizing of all production steps
base maintenance services to all sizes investing in its facilities. Lean manage- to secure higher efficiency in MRO
of fleets.” ment, often in joint workshops with the services. Customers also value the
He adds: “We want to be perceived customer, help to keep costs low or even tight cooperation on base maintenance
by our customers as a reliable next- drive it down due to smart interface procedures as well as on optimizing
door supplier which provides them with solutions. The exchange of best prac- of individual maintenance schedules
exactly those services they individually tises within the LHT Base Maintenance which lead to MRO cost savings for the
need in the expected quality. I think network constantly helps to drive down airlines.”

C2s and C3s and will be moving into

Americas:SURVEY RESULTS heavier [checks] later this year. Those
aircraft are here for five to seven days,
2011 TOP TEN AMERICAS MRO FIRMS it’s a very, very high burn rate, which is
1 ST Aerospace (SAA and ST Mobile) 22% essential for not having any late fines
2 TIMCO 20% from an inspection standpoint. Not hav-
ing the right materials on hand could
3 PEMCO 19%
slow down the turnaround time, so we
4 TAP M&E BRAZIL 16% have to plan routine and non-routine
5 AEROMAN / Aveos 12% materials because there is no time for
6 Mexicana MRO 4% recovery while the airplane is on base
7 AAR 3% so it is a high-velocity maintenance
concept that we apply in Tampa. We get
8 Evergreen 2%
it done well and we literally have had
9 United Services 1% perfect airplanes in our Tampa base as
10 Aeroframe Services LLP 1% measured by our client’s scorecards.
We include liability, quality, time and
In the Americas one such well-placed this trend: “We have grown about 50% value. It doesn’t mean that we always
MRO base is PEMCO, which is based overall throughout our three bases. We get everything right, but by and large
in Tampa, Florida. PEMCO has made used to have one location – Alabama – the A320 fleet is one we do as well as
great inroads into the A320-family and about two years ago we expanded to anything else we do.”
maintenance market and, as shown in Tampa and last year we doubled Tampa PEMCO’s Casey is very well aware of
the following survey results, it is doing and also opened our Cincinnati mainte- the fact the US fleet is due to be replaced
a good job. President Kevin Casey nance base. But the point is, although we with newer and more fuel efficient air-
explains: “Customers are drawn to the have grown 50% in size we have essen- craft that will require less maintenance,
location. They fly their last airplane in tially sold out already. We are trying not but he is prepared for this. In fact, he
last thing at night full of passengers and to do a whole lot of growing right now sees it in a very positive light.
we can taxi their aircraft to our hanger because it is challenging and requires “Newer airplanes require shallower
from there and then deliver them the a lot of resources and it is critical we maintenance checks as you would imag-
aircraft we have just wrapped up. So at are making sure we are adhering to the ine,” he says. “But many maintenance
6am they can light the fires and kick the process that helped us deliver the per- providers are able to run extremely
tyres and head on out with passengers. formance that led to the growth. Actually high burns and compress the mainte-
So there is no non-revenue ferry flight. our year-to-date growth rate is 73% but nance schedule into fewer days so the
We have two big beautiful hangars with we are making a decision to reduce this airline gets higher yields. They have got
substantial capabilities, which I think rate. The point is we have been pretty sufficient scale to keep their lines from
is really resonating with the A320 com- well sold out over the past year and a gapping, which keeps the whole pro-
munity.” half but we will have the capacity in the gram efficient from a cost and quality
This philosophy is the future for fall in two of our locations. We expect to standpoint – so it is good for everybody.
many MROs. As customers demand pursue A320 maintenance from North Even though newer airframes take
faster turnaround times at lower cost, American carriers – to date we haven’t fewer total man hours for maintenance,
it is important to factor in flight and fuel had many customers ferrying airplanes it is clear that many MROs are going
time/costs into the equation and delete across the Atlantic to our shop.” to be able to do more airplanes in the
the same where possible. Casey backs He adds: “We have been doing C1s, same footprint with the same number

70 Airline Economics: MRO Global 2011 www.airlineeconomics.co

MAINTENANCE MAINTENANCE

of mechanics, where previously they airplanes require lots of maintenance airlines as well as the service providers
were doing fewer airplanes each of man hours but they are not nearly as effi- as there will be a much larger fleet.
which required much more man hours cient and therefore in a world of mostly Each of the airplanes will require
for heavy checks.” fixed-price maintenance services they far fewer man hours per year, but most
He adds: “It is widely thought that are more challenging for the more typi- MROs are going to be able to continue
the new airplanes are so much more cal MRO to be profitable. Airlines that with approximately similar mainte-
sophisticated in how they tell you are operating newer aircraft than are nance facilities because they are getting
what’s wrong, help you diagnose what’s maintained by fixed-price providers; the burn rate up much higher than they
wrong, and help you go about fixing it, they will be able to have budget control would have otherwise in the absence of
that they offer far fewer maintenance and confidence in when that aircraft is heavy structures requirements, which
surprises both in operation and in the going to be completed and returned. they will not have for a very long time
maintenance hanger. The bigger, older This is an excellent future for the US to come.”

pany grouping of MROs who work with

Asia Pacific: SURVEY RESULTS the manufacturer across a range of ser-
vices.
2011 TOP TEN ASIA PACIFIC MRO FIRMS Kortas says; “I believe [consolida-
1 ST Aerospace 27% tion] is a trend that may accelerate in the
2 HAECO 19% near term. It is a global phenomenon,
but as the Asia-Pacific is so dynamic it
3 Lufthansa Technik Philippines 18%
could be the forerunner of such a move-
4 Evergreen 14% ment. It has been a constant trend.”
5 TAECO 11% Because Asia is now a driver for avia-
6 SIA Engineering Company 4% tion growth, the fundamentals are there
7 GAMECO 3% for it to continue growing stronger in
MRO demand and development of MRO
8 MAS Engineering 2%
capacity.
9 Air New Zealand Engineering Services 1% A380 maintenance is currently being
10 China Airlines International 1% conducted in-house, at Singapore Air-
lines and Qantas Airways and now
Both Airbus and Boeing are bullish increase efficiency in airline operations Korean but there is potential even on
about MRO trends in the APAC region; and maintenance. this type for components outsourcing.
their eyes are fixed firmly on China and Airbus senior director, maintenance Many A380 operators have asked Airbus
India and a need for the manufacturers and customer service, Wolfgang Kortas, for Flight Hour Service (FHS) mainte-
to provide full package solutions to air- said aviation’s current global downturn nance programs for example.
lines. should accelerate the consolidation The Asia Pacific market is pointing
Of course newer aircraft equals a of some MROs, including a number in towards India for strong MRO growth
reduction in demand for parts and ser- Asia-Pacific. He said consolidation was and there is no reason to assume that
vices, but it also means an increase in beginning to happen among members South East Asia will not be the largest
demand for more MRO solutions to of the Airbus MRO Network, a 15-com- MRO market in the world by 2050.

THE TOP TEN A320 MRO COMPANIES PROFILED

Walter Heerdt, LHT’s senior vice A380 flagship was a particular high
1. Lufthansa Technik president for marketing & sales, says: point for Lufthansa Technik in 2010.”
“Lufthansa Technik has survived The Lufthansa Technik Group
Lufthansa Technik is one of the the last economic and financial crisis comprises more than 30 subsidiaries
leading manufacturer-independent relatively well through increases in and joint ventures in Europe, Asia,
providers of maintenance, repair, efficiency, high utilisation of flexible North America and Australia. It has
overhaul and modification services in working hours and process innovations. two joint ventures with OEMs: N3
the civil aviation industry. With tailored 2010 saw a slight increase in revenue, engine overhaul services (with Rolls-
maintenance programs and state-of- but as expected we were not quite able Royce, based in Arnstadt / Germany)
the-art repair methods, LHT ensures to match the record earnings of the is a maintenance and repair facility for
the unbroken reliability and availability year before. Operatively, the smooth large Rolls-Royce turbofan jet engines;
of its customers’ fleets. introduction of Lufthansa’s new Airbus and Airfoil Services Sdn. Bhd. ((ASSB),

www.airlineeconomics.co Airline Economics: MRO Global 2011 71

MAINTENANCE

with MTU Aero Engines) which is surplus parts enables the operators to MRO services for the B748, B787,
specialized in repairing high pressure save costs. In the end it is an individual EMB190 and A380.
compressor blades and vanes as well strategic and economic decision of the Heerdt says: “As Lufthansa is one of
as low pressure turbine blades. specific operator if and to which range the first customers for the new Airbus
Heerdt says: “LHT has developed he will go this way.” A320 neo series Lufthansa Technik will
a very comprehensive monitoring and But he also admits further definitely extend its MRO capabilities
supplier management to avoid delays consolidation is expected: “Despite also to this type of aircraft in the coming
in parts delivery. We are following a new entries, we see an ongoing years.
pro-active and transparent information consolidation process in the MRO From base maintenance side,
exchange with our suppliers regarding industry. The introduction of new Lufthansa Technik has recently
volume and usage of parts for on-time aircraft generations and engines types launched a new T-product (“Total”-
delivery. Additionally, together with is combined with high investments in products, offered by LHT for every kind
our subsidiary Lufthansa Technik infrastructure, tools and employee of MRO service), called TBS – Total
Logistik we have created an effective training and complex questions about Base Maintenance Support. The TBS
supply chain for a global provision with intellectual property. These challenges is especially designed to make Base
spare parts.” can only be handled successfully by Maintenance easier for fleet operators
Heerdt is bullish on future growth MRO providers operating globally and and offers a broad range of included
for the MRO market: “We think that the at a certain scale, having the ability to and optional sub-products as well as
MRO market will further increase in tailor packages to individual needs.” different financing models, to better
the next years including the business LHT is looking to further grow its suit each operator’s financial situation
with surplus parts, as the use of market share via the launch of new or preferences.”

Modifications including Winglet

2. ST Aerospace Installation On-Wing maintenance
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$'&RPSOLDQFHDQG0RGLILFDWLRQV‡ aircraft Technologies are now essen-
Management
1RQ'HVWUXFWLYH,QVSHFWLRQV‡$LUFUDIW tially a group under the ownership of
‡(QJLQHFRQGLWLRQPRQLWRULQJ
Painting the Mubadala Development Company
‡3HUIRUPDQFHWUHQGLQJ GLDJQRVWLFV
(Mubadala), their votes have been
‡0DLQWHQDQFHSODQQLQJ‡:RUNVFRSLQJ
Aircraft Modifications grouped together.
‡/HDVHUHWXUQSODQQLQJ
‡3DVVHQJHU7R)UHLJKWHU 37)  Mubadala is a catalyst for the eco-
‡)DLOXUHDQDO\VLV‡&RQILJXUDWLRQ
&RQYHUVLRQV‡)OHHW6WDQGDUGLVDWLRQV nomic diversification of Abu Dhabi.
management
‡&DELQ,QWHULRUV8SJUDGHV‡,Q)OLJKW Established and owned by the Gov-
‡5HOLDELOLW\LPSURYHPHQWSURJUDPPH
(QWHUWDLQPHQW ,)( ‡$YLRQLFV ernment of Abu Dhabi, the company’s
‡:DUUDQW\ LQVXUDQFHPDQDJHPHQW
8SJUDGHV ,QVWDOODWLRQV‡2WKHU strategy is built on the management of

72 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MAINTENANCE

MRO states that it is its “independence TAP M&E Brazil has the most up-
ADAT services [that] ensures every customer receives to-date MRO technologies - including
‡7UDQVLWFKHFNVDQGDLUFUDIWSXVKEDFNV the same high-quality service and treat- the only Inertial Navigation System in
‡'DLO\ZHHNO\DQG¶$·FKHFNV ment under one SR Technics service Latin America, one of the five Griffon
‡0LQRUFRPSRQHQWUHSODFHPHQWDQGVHUYLFLQJ umbrella”. GTW-U3 cylindrical milling machines
(wheel change etc.) The MRO firm offers total solution in existence in the world, and a horizon-
‡(QJLQHV$38VHUYLFLQJ UHSODFHPHQWV packages to airlines, where it takes tal Gemini GE-1600S lathe, which can
(boroscope, vibration survey etc.) over the technical management and machine very long parts for the landing
‡$LUFUDIWZHLJKLQJ technical operation of the entire fleet, gears repair services.
‡0DMRUFRPSRQHQWUHSODFHPHQWDQGVHUYLFLQJ and provides many types of services The company is certified to maintain
(MLG seal replacement, landing gear swing etc.) tailored to each customer’s individual the entire Boeing line 727, 737Classics,
‡0LQRUFRPSRVLWHDQGVWUXFWXUDODVVHVVPHQWV requirements – including elements 737NG, 747, 757, 767, 777, BBJ, MD11
and repairs (fuselage dents, cargo hold damage such as aircraft checks, engine over- and DC10, Embraer EMB120 (Brasí-
etc.) haul or component management and lia), ERJ 135, ERJ 145, EMBRAER 170,
‡&DELQPDLQWHQDQFHLQFOXGLQJDGYDQFHGILUVW repair. EMBRAER 175 and EMBRAER 190,
and business class seating systems, galleys and SRT’s proprietary IT system sets EMBRAER 195 and Legacy 600 and
IFE it apart from its competitors. Via this Lineage, Airbus A300, A300-600, A310,
‡)XHOWDQNHQWU\ )XHOVHQVRUUHSODFHPHQWHWF  system, the company is able to manage A320, A330 and A340.
‡$LUFUDIWH[WHULRUZDVKLQJ aircraft and component data online and
‡$LUFUDIWVSHFLDOLQVSHFWLRQ ELUGVWULNHKDUG real-time wherever the airline or air- Services offered include:
landing, volcanic ash exposure etc.) craft is located. ‡'DLO\DQGRYHUQLJKW&KHFNV‡&RPSR-
‡6KRUWWHUPPDLQWHQDQFHSODQQLQJ ADAT in Abu Dhabi provides com- QHQWV2YHUKDXO‡(QJLQHHULQJ3URMHFWV
‡'HIHFWPDQDJHPHQW prehensive line and light maintenance ZLWK7HFKQLFDO6XSSRUW‡,QWHULRUV3URM-
‡0DLQWHQDQFH&RQWURO&HQWUHVHUYLFHV services including ‘A’ checks, aircraft HFWVDQG2YHUKDXO‡$YLRQLFV6\VWHPV
‡$2*VDQGDLUFUDIWFDVXDOW\UHFRYHU\ casualty and AOG response, engine and DQG,QVWDOODWLRQV3URMHFWV‡$LUIUDPH
‡'HIHFWWURXEOHVKRRWLQJDQGUHFWLILFDWLRQ major component replacement, trouble- 5HSDLU3URMHFWVDQG,PSURYHPHQW‡$
‡5LGLQJHQJLQHHUV shooting and defect rectification. B, C and D Checks

partnerships and long-term, capital-in- 4. TAP M&E / TAP 5. TIMCO

tensive investments that deliver strong
financial returns and tangible social
M&E Brazil TIMCO Aviation Services is one of the
benefits for the Emirate of Abu Dhabi, world’s largest independent aircraft
and contribute to the growth and diver- TAP Maintenance & Engineering (TAP MRO providers. TIMCO provides air-
sification of its economy. M&E) is the MRO (Maintenance, Repair frame MRO and modification services
SR Technics provides technical and Overhaul) organization of TAP Por- from three multi-hangar locations in
solutions for airlines on a global basis. tugal, the Lisbon based operator, that the United States: Greensboro, North
Services are provided either directly to provides maintenance and engineering Carolina, Macon, Georgia and Lake
the airline or through other parties such services in aircraft, engines and com- City, Florida.
as aircraft leasing companies, OEMs ponents. TAP M&E is duly certified by TIMCO’s services cover light and
(Original Equipment Manufacturers) several aviation authorities amongst heavy scheduled maintenance checks,
or component trading companies. which is the FAA and EASA. exterior and interior modifications
With headquarters at Zurich Airport, Since the foundation of TAP, in 1945, installations, upgrades and conversions
SR Technics (SRT) offers an extensive TAP M&E has been responsible for the for commercial, government and private
network of maintenance facilities, maintenance of its entire fleet, presently aircraft. The airframe MRO operation
logistic centres, line stations and sales with more than 50 Airbus aircraft. In the employs over 1,000 mechanics--many of
offices across the globe. 70s started providing services to third whom are certificated--and uses nearly
SRT has been providing mainte- party customers – this now accounts for 1.5 million square feet of hangar and
nance services to customers since the more than half total revenue. office space at its three locations.
early 1960s as the former maintenance The long-term involvement with a TIMCO LineCare offers a range of
division of Swissair and a founding commercial operator, made TAP M&E line maintenance and non-technical
member of the largest European main- aware of the importance of on time support services under FAA Opera-
tenance consortium. delivery of products (aircraft, engines tions Specification D107 certification at
SRT offers services for most Airbus and components) and services. TAP a growing number of airports.
and Boeing aircraft and their associ- M&E is therefore committed to offer its TIMCO LineCare performs a range
ated engines and components, and is customers cost efficient maintenance of services across its growing network,
one of the largest independent provid- with short turn-around times and high grouped into two broad categories as
ers of these services in the world. The quality and reliability standards. follows:

www.airlineeconomics.co Airline Economics: MRO Global 2011 73

MAINTENANCE

TIMCO’s Engine Center provides (-HW6HULHV‡)RNNHU) maintenance check because they can
full engine disassembly (teardown), ‡0F'RQQHOO'RXJODV0'6HULHV get so much extra revenue out of the
inspection, repair, parts overhaul ‡6DDE airplane. But not every airline is agile
and reassembly (build up) services. enough to take on aircraft out of service
The engine team at the Oscoda, Airline Economics: What makes unexpectedly and replace with another
Michigan facility provides complete PEMCO a good destination for A320 quickly. The A320s that we routinely get
non-destructive testing (NDT), engine maintenance? out early, with one or two exceptions,
AD compliance, fuel nozzle overhaul, Kevin Casey, president of Pemco: they went a long way to ratchet down
bleed valve overhaul, gearbox overhaul The fundamental requirement our cus- our turn times.
and HPC disk overhaul. In addition, tomers want is for us to provide them There is another reason that is more
AOG teams can be sent on field service with reliable aircraft, on schedule and esoteric and objective that some cus-
calls to perform engine on-wing support without budget surprises. The opera- tomers are drawn to the location. They
and recovery services. tion team does a good job on the A320 fly their last airplane in last thing at
The TIMCO Engine Center is an FAA fleet. We routinely get aircraft back on night full of passengers and we can taxi
certified repair station (T48R384Y) with time and early. We have periods of time their aircraft to our hanger from there
focus on complete support for the JT8D strung together that are literally perfect and then deliver them the aircraft we
series of engines, as well as disassem- ten score cards for one customer. Princi- have just wrapped up so at 6am they
bly and parts inspection services for the pally, A320 customers have historically can light the fires and kick the tyres and
CFM56-3. been Northwest, Delta and JetBlue but head on our with passengers. So there
we have also done leasing customers for is no non revenue ferry flight.
RBS and ILFC. Our customers want to We have two big beautiful hangars
6. PEMCO have aircraft to fly well after they leave with substantial capabilities, which I
us and our in service reliability is man- think is really resonating with the A320
Pemco specializes in airframe heavy aged by our quality department. Every community.
maintenance, as well as interior recon- day they track the aircraft we have seen
figuration, avionic & IFE upgrades, out at least for a month or so and our AE: Are you seeing any price sen-
and structural and cargo modifica- in service reliability has in that 21 day sitivity because of the overcapacity in
tions. A leading aircraft MRO services period is very high. the market?
provider for a wide variety of aircraft Our schedule is very easy to mea- Casey: We are not seeing too much
types, Pemco has maintenance bases sure. We only have a couple of days to overcapacity. In North America over the
in Tampa, Florida, Dothan, Alabama turn around the airplanes and we get the past 10 months we have been affected
and Cincinnati, Ohio, as well as partner airplanes out early. On the Northwest by a lack of capacity, not physical hangar
operations in Southeast Asia. Pemco is fleet, which is a slightly older fleet than space, but competence mechanic capac-
also the world’s leading aircraft cargo the JetBlue fleet, so it is a more involved ity. There has been an interesting shift
conversion providers with over 300 check and that work was split between over the past few years where mechanic
cargo conversions across 26 models of ourselves and another provider, we rou- wage rates have gone up significantly
cargo aircraft. Its new 757 Combi and tinely produce the airplanes two and a through a combination of retirement,
Freighter programs are the latest addi- half days early. Our average on time diminishing the talent pool and airlines
tions to Pemco’s cargo platform, where performance was two and a half days re-hiring mechanics – Delta for exam-
Pemco presently has four 757 cargo early. That kind of extra utilisation is ple has hired a lot of mechanics recently
modifications in work, with more proj- huge to an airline. – and there has also been an increase in
ects in the making. In Tampa we have a different com- overall maintenance and modification
At the three US sites, PEMCO plex. The JetBlue fleet is younger, we rates as a result of the rebound in the
offers: have been doing C1s, C2s and C3s and economy and the desire of the mainline
‡ 'HYHORSPHQW DQG PDQXIDFWXUH RI will be moving into heavier later this carriers to capitalise on the restoration
DLUFUDIWFDUJRV\VWHPV‡&DUJRPRGL- year. Those aircraft are here for five to of business travel demand – so lots of
ILFDWLRQV‡$LUFUDIWSDUWVDQGVXSSRUW seven days, it’s a very, very high burn first class modifications on widebod-
‡6FKHGXOHGDQGXQVFKHGXOHGPDLQWH- rate, which is essential for not having ies and even on their narrow body and
QDQFH‡(QJLQHHULQJVHUYLFHV‡5HSDLUV any late fines from an inspection stand- regional feeder aircraft. A lot of that has
‡3UHFLVLRQFRPSRQHQWV‡$YLRQLFV point, not having the right materials consumed the capacity over the past
‡,QWHULRUPRGLILFDWLRQV on hand that could slow down the turn- year and a half in the United States and
around time. in Canada.
Aircraft types serviced include: We haven’t experienced a great deal
‡ $75  6HULHV ‡ %HHFK ' ‡ AE: Are your good turn times of overcapacity that has affected rates,
%RHLQJ6HULHV‡ advertised as a competitive advan- however, having said that, our costs
$LUEXV$$‡%RPEDUGLHU'DVK tage? have increased faster than our pricing.
6HULHV ‡%RPEDUGLHU Casey: It is clearly an advantage to Once we join forces with a customer, we
&5-‡(PEUDHU(5- have an aircraft returned early from a have a very active and lean team so we

74 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MAINTENANCE

very rarely increase prices. Last year, from the MRO world who thinks they
all three of our major legacy programs can bring their expertise to Boeing and 8. Aveos/AEROMAN
we did not increase the price at all. But leverage that to provide MRO services
at the same time our labour costs and that no one else can match. But the truth Aveos, in its various guises has been car-
retirement costs have all increased. is airlines like a buffet, they don’t order rying out heavy maintenance for more
The only was we can afford that is to off the limited menu. They are going to than seven decades. The company, now
increase efficiency, and so far we have pick their engine services from the best acting as an independent is fast emerg-
been able to do that. provider – many times that is the OEM ing as one of the leading MROs in the
but many times it is not. They are going Americas. With the addition of Aeroman
AE: Does the rise of OEM after- to pick their airframe services from the to the stable the firm is able to cover all
market agreements worry you? best providers – in house light check or the Americas as a modern local pro-
Casey: Sure! The only way the OEM outsource the heavier checks. I agree vider of services.
has a real advantage and has real with the trend that the OEMs are going Supply chain, fleet and logistics man-
potential value is where the invoices to have a heavy impact on high intel- agement
have a high cost component and where lectual property items – engines and In addition to airframe, engine, and
technical data is effectively controlled components – and particularly those component solutions Aveos offers val-
by the OEM – this is either the engine items where the invoice is highlighted ue-added maintenance solutions such
manufacturers or in the high-value by the cost of parts, which they con- as aircraft maintenance training and
components such as black box record- trol, but it won’t be the case in airframe supply chain management as part of
ers. maintenance, full stop.” an integrated service offering, in turn
An engine bill is 75% parts; an air- ensuring efficient demand, process
frame bill is 75% labour. We all know and vendor management. Aveos fleet
OEM labour costs more. But they 7. HAECO management experts allow customers
haven’t cornered the market on skill. to focus on their core competencies by
In fact we have hired OEM mechanics. Hong Kong Aircraft Engineering Com- providing tailored services that opti-
These guys are used to dealing with pany Limited - better known as HAECO mize carriers’ maintenance programs
clean airplanes, shallow dive, not dif- - has provided comprehensive aero- and operational reliability.
ficult and lighter, checks. They don’t nautical engineering and maintenance
get into heavy stuffs or modification. services to airlines and operators since Mainline Services
These are the things that more experi- 1950. ‡6XSSO\FKDLQPDQDJHPHQW LQYHQWRU\
ence mechanics, hopefully with some When HAECO signed a 20-year fran- management, procurement, logistics,
grey hair, are much better at. So when chise agreement with Hong Kong’s business support and airline opera-
your invoice is 75% labour and the Airport Authority, it became the only full WLRQDO VXSSRUW  ‡ )OHHW PDQDJHPHQW
skills of the mechanics aren’t just about service provider at the new Hong Kong ‡ (QJLQHHULQJ VHUYLFHV ‡ 5HJXODWRU\
reading a manual or putting an engine International Airport at Chek Lap Kok FRPSOLDQFHDQGDXGLWV‡7HFKQLFDOSXE-
back together as per the tolerances in offering comprehensive line to heavy OLFDWLRQVVHUYLFHV‡7HFKQLFDOUHFRUGV
the manual, they really have to think maintenance packages including air- PDQDJHPHQW ‡ $LUFUDIW PDLQWHQDQFH
on their feet and be more of a crafts- craft component overhaul support and WUDLQLQJ‡7UDLQLQJ6ROXWLRQV‡KRXU
man than just assembly. That’s where AOG/aircraft recovery service. engineering support (AOG)
independent airframe MROs have the HAECO has, over the years, expanded
advantage over OEMs, and where they beyond the boundaries of Hong Kong Facilities and Locations
will always have an advantage over the SAR into other cities in China with ‡0RQWUHDOOLQHV²VTIW
OEMs. In the eight years I have been Taikoo (Xiamen) Aircraft Engineering ‡:LQQLSHJOLQHV²VTIW
at Pemco, the US level of outsourced Co. Ltd. (TAECO) at Xiamen, Fujian, ‡9DQFRXYHUOLQHV²VTIW
heavy maintenance has gone up from and Taikoo (Shandong) Aircraft Engi- ‡6DQ6DOYDGRUOLQHV²VTIW
about 35% to about 68%. That trend is neering Co. Ltd. (STAECO) at Jinan,
continuing. And they are not going to Shandong. Aveos has signed a five year contract
Boeing. Recently, a joint venture, Taikoo with ABC Aerolíneas, S.A. de C.V., oth-
Every decade or decade and a half, SIchuan Aircraft Engineering Ser- erwise known as Interjet, of Mexico, to
the OEMs have gone into this mode vices Co, has been formed in Sichuan. repair and overhaul all components on
where they want to extract some more It also operates maintenance facilities its growing fleet of 24 Airbus A320 air-
vertical integration and over their in Singapore - Singapore (HAECO) craft. The agreement includes access
services in a Goldshare programs or (SHAECO), and Bahrain. In addition, to an inventory pool for Interjet as well
whatever their term-du-jour is, and it HAECO has established joint ventures as the placement of main base stock in
always fails. Sometimes it is motivated with key major Original Equipment Toluca, Mexico. Aveos will also support
by offshore requirements such as China Manufacturers (OEMs) in pursuit of the development of Interjet’s in-house
or India, and sometimes it is motivated providing “Total Care” services to its component and repair capability. Aveos
by somebody that came to the OEM customers. is an MRO to keep an eye on.

www.airlineeconomics.co Airline Economics: MRO Global 2011 75

MAINTENANCE

monitoring parameters. Aircraft maintenance

9. AFI-KLM E&M warranties on all parts that have not $ $ $ $ ‡ $ % & '
come fully up to expectations. &KHFNV ‡ &3&3 DQG ,6,3 ‡ 66,'
AFI KLM E&M provides MRO ser- ,QVSHFWLRQV‡$'·VDQG6%·V‡,QWHULRU
vices while also guaranteeing a whole 5HFRQILJXUDWLRQ ‡ &RPSRVLWH 5HSDLU
raft of requirements ranging from 10. EVERGREEN ‡ $JLQJ DLUFUDIW ,QVSHFWLRQ ‡ $YLRQLF
safeguarding air safety, properly man- 0RGLILFDWLRQV ‡ $LUFUDIW 3DLQWLQJ ‡
aging aircraft operation, and minimizing EVA Air’s Engineering and Mainte- Structural Mods
costs. The firm has a 75-year-plus track nance Division was spun-off as an
record,during which it has achieved independent corporation in September Flight Line
a level of undisputed excellence in 1998 to become Evergreen Aviation Providing customer support for all
managing large aircraft fleets. The Technologies Corporation (EGAT) with types of commercial aircraft:
operating units responsible for produc- General Electric Company (GE) as an ‡(QJLQH&KDQJHV‡%ULGJLQJ&KDQJHV
tion place their skills in the service of equity partner. EGAT was tasked to ‡$ %&KHFNV‡)OLJKW&RQWURO5LJJLQJ
Air France-KLM’s fleet as well as those uphold aircraft maintenance quality and ‡$LUFUDIWPRGLILFDWLRQV‡$2*'URS,Q
of its customers. promote technical flight safety while and TDY Services Team
AFI KLM E&M has set up a com- creating adequate business value.
bined organization responsible for EGAT has since evolved into a Storage
strategy, marketing, business develop- specialty, high business-value MRO, ‡KRXUURYLQJVHFXULW\‡$FWLYHDQG
ment, sales force (present throughout undertaking mega-scale modifications passive video and microwave perim-
the world) and external communica- such as the Dreamlifter in partnership HWHUVXUYHLOODQFH‡$FWLYHPDLQWHQDQFH
tion. with Boeing, as well as engaging in programs for stored aircraft & engines
Its airline-MRO position also guaran- complete Section 41 skin replacements, ‡'U\QRQFRUURVLYHHQYLURQPHQWFOL-
tees its independence when it comes to Horizontal Stabilizer skin replace- mate
choosing the most effective options for ments, and executing AOG recovery
customers’ engines. AFI KLM E&M is repairs on any portion of the airframe Components
able to get the best from its strong part- structure. ‡$FWXDWRUF\OLQGHUVDQGOLQNV‡$YLRQLF
nership with OEMs as well as to develop EGAT’s robust management sys- HTXLSPHQW$FFHVVRULHV‡*HDU%R[HV
alternative solutions that increase cus- tems and processes the Oracle-based ‡:KHHOVDQG%UDNHV‡(QJLQH&RZO-
tomers’ benefits. MRO System for engine overhauls, LQJV‡)OLJKW&RQWUROV‡6WUXFWXUHV
corporate-wide Six Sigma deployment, ‡&RPSRVLWHV‡+\GUDXOLFV‡3QHXPDW-
AFI KLM E&M provides: Human Resource Management, Job LFV‡(QJLQHDFFHVVRULHV‡3DLQWLQJ
‡JXDUDQWHHG7$7 Qualification, Balanced Scorecard,
‡ HQJLQHHULQJ ([SHUWLVH WR RSWLPL]H Product Safety, Knowledge Manage- Engine services
both costs and “Mean Time Between ment and E-Commerce. All Models - Boroscope Inspection,
Removal” (MTBR) Commercial airlines, aircraft leasing Engine Removal & Reinstallation; LRU
‡VORWIOH[LELOLW\WKURXJKLWVHQJLQH052 companies, and leading government Replacements.
network agencies entrust heavy maintenance
‡ZRUNPDQVKLSTXDOLW\EDVHGRQDKLJK work to Evergreen Maintenance Cen- Location:
skilled and experienced labour force ter (EMC). Located in Marana, Arizona, Evergreen Maintenance Centre is
‡FRQWUDFWIOH[LELOLW\UDQJLQJIURP7 0 the EMC is one of the largest full-service famed as the site where aircraft are
to Fixed Prices, or different kinds of commercial maintenance, repair and stored. The Marana, Arizona location
Flight Hours programs. overhaul (MRO) facilities in the United provides the ideal dry southwest USA
States. Relativity Capital has recently climate for aircraft maintenance and
Engines acquired EMC. storage.
Measurements carried out on engines Consisting of three maintenance
provide daily data, allowing the AFI hangars and a large maintenance flight Painting:
KLM E&M engineering team to monitor line, the Evergreen Maintenance Cen- Whether your flight path takes your
performance (fuel consumption, EGT ter also operates the Pinal Air Park and fleet around North America or around
margin, oil consumption, etc.) and rec- its 6,850-foot runway rated for Boeing the world, Evergreen Maintenance
ommend on-wing maintenance actions. 747-400 through 747-8 aircraft. Center is your source for aircraft paint-
This approach leads to increased engine With 20 million square feet of ramp ing. The firm’s worldwide customer
on-wing lifespan; incident prevention; and storage area able to accommodate base, combined with 30 years of experi-
reduced engine operational and main- up to 400 aircraft, the EMC also holds ence in aircraft exterior painting equals
tenance costs. the distinction as the largest commer- distinctive results. Contact EMC to
Drawing on its extensive operational cial aircraft storage facility with heavy discuss how Evergreen Maintenance
expertise, AFI KLM E&M can recom- maintenance services in the world. Center can provide the finest aviation
mend customized engine performance services in the industry.

76 Airline Economics: MRO Global 2011 www.airlineeconomics.co

EUROPE

EUROPE MRO

E
uropean airlines spend rent market performance should be capacities around the world mean margin
$12.2 billion on mainte- approached with an eye on global events. pressure in the MRO business has risen
nance, which equates to This year has brought much by way of further. The volume and structure of our
24% of the global mainte- political uncertainty to the North Afri- growth reflect this trend. Despite the chal-
nance, repair and overhaul can region, which has had an effect on lenges posed by the market, Lufthansa
expenditure. Eastern European and MRO companies across Europe as flights Technik grew its revenue vis-à-vis 2010 in
Commonwealth of Independent States have been grounded and/or cut back. The the first half of the year.”
carriers account for only $2.1 billion Egypt political crisis was a heavy blow, The second half of calendar 2011 has
of this figure, but David Stewart, vice- with tourism to the county still nowhere been a very different story from the first
president, ICF, at SH&E, predicts their near pre-political crisis levels. half. Political unrest in North Africa and
portion of this expenditure will grow The most powerful MRO company the Middle East has continued but global
faster than the global average of 3.4%, at in Europe remains Lufthansa Technik economic confidence has fallen away
a 4.7% compound average growth rate. (LHT), and the company could be seen as sharply as austerity measures take effect
Meanwhile, Team SAI also foresees Euro- a barometer for the industry. Lufthansa across Europe and beyond. In Europe dur-
pean MRO growth will stay solid, with Technik chief executive August Henning- ing 2010, MROs enjoyed a strong return
firms in eastern Europe leading the way. sen spoke to MRO Global about the events to growth on the back of aircraft premium
It expects overall European growth of 4% of the past 12 months: “Although global seating upgrades, but that business has
Photo: Gregor Schläger/Lufthansa Technik

over the next five to 10 years, with western demand for maintenance, repair and over- fallen away in 2011. Despite the challenges
Europe, as a mature region, experiencing haul services in the first six months in 2011 posed by the market and the competition,
3% growth. Year-to-date fleet growth has has been growing once more in a number Lufthansa Technik grew its revenue in
remained slightly stronger than expected, of regions, it has been recovering at a the first half of 2011 compared with 2010
with western Europe returning to fleet slower rate than the passenger and cargo figures. However, it was unable to match
growth after recent years of decline. East- business. The Middle East, North Africa the previous year’s operating result mainly
ern Europe, meanwhile, is among the and Japan are all important markets for due to provisions and revenue losses asso-
fastest growing regions worldwide and is Lufthansa Technik, and the consequences ciated with clients from the crisis-hit parts
forecast to gain 8–9% of the overall Euro- of the political unrest and natural disasters of North Africa. Against this backdrop,
pean market share by 2021. there are prompting revenue to shrink and Lufthansa Technik is working on a num-
European MROs are global players are delaying contract negotiations. Cost ber of projects to further improve its cost
in the main, and so the subject of cur- pressure on airlines and growing MRO base and its competitive position.

78 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

As one would expect, the MRO busi-

ness is dependent on the fortune of the COMPOUND ANNUAL GROWTH RATES
airline business. And the aviation indus- Fleet WE EE Total
try is sensitive to regional or international 2011 2.7% 9.9% 4.1%
economical, ecological and political cri-
2016 3.2% 6.9% 4.1%
ses, resulting in cyclical ups and downs.
Additionally, airlines are facing strong 2021 2.9% 8.4% 4.1%
cost pressures due to increasing oil and Total MRO WE EE Total
spare part prices, and rising fees and 2011 3.2% 9.3% 4.3%
taxes. All of this has a direct impact on
2016 3.2% 7.5% 4.1%
MRO businesses. The challenge is to
have a good financial, organisational and 2021 3.2% 8.4% 4.2%
technical foundation in place to weather
these pressures. Henningsen sums it up: wherever an aircraft might be. Companies is indicative of the way Monarch Engi-
“There is a clear trend in regard to the such as LHT will be in a good position to neering delivers a service.”
customisation of the MRO business. Air- benefit, although it also means all MROs, SMART is the Special Monarch Air-
lines expect tailored service packages that including giants such as LHT, will have to craft Response Team, which can be
are optimised to their specific needs. Best increase joint ventures with other MROs contracted or maybe ad hoc: “Typically
possible turn-around times, high quality to ensure they retain a good local presence. it is an ad hoc service where a customer
and minimised cost are the terms to be One MRO that can claim to be both has called in to our integrated operations
fulfilled by the Lufthansa Technik Group.” the bespoke local provider and a global centre,” says Adams. “We have surprised
The large, global MRO companies player is Monarch Aircraft Engineering customers with how quick we have
based in Europe are still very much (MAEL). It is perhaps a perfect tem- responded. We have had overseas repairs,
focused on the regions that have a strong plate for the MRO industry to follow major skin repairs, engine replacements,
growth in aviation, namely Asia-Pacific, when adjusting to uncertain times. Over engine recoveries, you name it.” Origi-
the Middle East and Africa. Western a year ago MAEL was in the middle of nally SMART was set up for the Monarch
European MROs have for some time a resizing exercise, where some roles Airline operation “but it very quickly
suffered from stiff competition from were made redundant. At that time, showed so much value and we got such a
lower-cost regions when it comes to wide- there were enormous pressures on the huge amount of interest that we actively
body aircraft, which lend themselves to industry, such as consolidation among promoted it to the marketplace. Says
undergoing heavy airframe maintenance airlines. Two of MAEL’s key customers Adams: “We have customers that make
in far-flung locations with low labour consolidated, meaning that MAEL now significant use of it, even ones who have
rates. This has led to a focus among the counts among its customers airlines their own engineering arm too. We have
European maintenance bases to service that have their own MRO shops. Mick also picked up a considerable amount of
the huge domestic narrowbody fleets of Adams, managing and technical director maintenance work of the back of it.”
local carriers and those of North Africa. at Monarch Aircraft Engineering, com- MAEL has also successfully reduced
The introduction of the European ments: “We faced significant pressures turnaround times: “A-checks on nar-
Emissions Trading Scheme (ETS) in but the good news is that since that time rowbodies, two or three years ago had a
2012 will both help and hinder MROs we have secured new business and we turnaround time averaging 23–24 hours,”
based within the European Union. have resized the business and, thanks says Adams. “Today they take eight hours
LHT’s Henningsen is sure the ETS will to our people who are absolutely dedi- on an overnight check. The MRO under-
have a marked impact on his business. cated and loyal to our brand and values, stands the pressures and requirements of
“For our customers it will be even more we have emerged stronger. Another high an airline. It knows it needs the aircraft
important to reduce fuel consumption is the long-term investment – despite back in service as quickly as possible. The
and minimise emissions than it has been those pressures, we have continued to responsibility of the MRO is to say to the
in the past. We are already working on invest in systems, people and the airline operator that we can do that, provided we
several research and development proj- – we are attached to an airline and we maintain the service, the quality, and the
ects to help our customers achieve these understand an airline. We can absolutely standards when we deliver that aircraft.
goals. Currently, our engine-wash system punch above our weight and back that up There is a point where an MRO can do no
Cyclean™ already helps several airlines with our values, our service and our qual- more, and at that point the quality of an
to run aircraft engines at lower tempera- ity. We are very flexible. A lot of the work MRO’s customers comes into play.”
tures, use less fuel, and therefore emit less we have done recently was all around
CO2 and other greenhouse gases.” having flexible working initiatives – we WHERE WILL THE INDEPENDENT MRO BE
This is just one aspect of the story have a SMART team of engineers that IN 10 YEARS?
though. The key for MROs within Europe are ready to go in two hours anywhere in The key to the future of MRO is to be
and the rest of the world will to become a the world. They have done 60-70 sorties global, bespoke and part of a global net-
local maintenance provider and a global in the past year to different parts of the work through joint ventures with the
player that is able to provide services world, rescuing aircraft etc. That scheme OEMs, there can be no doubt about this.

www.airlineeconomics.co Airline Economics: MRO Global 2011 79

EUROPE

increasingly rare, as operators try to phase

EUROPE’S FLEET FORECASTS traditional D-check tasks over multiple
9,000 Western Europe C-checks on modern aircraft. These usu-
Eastern Europe ally take eight to 10 days for a narrowbody,
8,000 7,657 and involve less labour and material than
Total
a full overhaul. This does mean the tradi-
7,000 tional model for an MRO is being ripped
6,266
apart and teams of technicians have to be
6,000 5,668 broken up to work on more aircraft. This
5,136 trend is important for airlines to note
5,000 4,841
4,246 because, as the MROs move away from
4,000 aircraft spending long hours in a hanger
with large teams, when an older aircraft
3,000 requires a structural repair the costs will
be higher as the business model of the
1,989
2,000 MRO will make this project an exception
1,425
to the norm, with the additional costs that
1,000 890 entails. This could especially be a prob-
lem for operators of older narrowbody
0 aircraft, as issues such as wing corrosion
2011 2016 2021 become a regular find at the C-check stage
and will lead to additional hanger time.
Moreover, the key is to be quick to move tenance work. But the fuel costs today, European MROs are acutely aware that
with the market, much like the airlines in and in the near future the emissions striking the right balance between team
the US who are now able to trim capac- costs, don’t make this viable. For lessors size and skills and facility capacity are
ity and adjust prices at will. MROs need this might be different as aircraft avail- becoming more important. As new-gen-
to be able to meet the needs of clients in ability is absolutely key, so having slots eration aircraft enter fleets across Europe,
a manner that ensures the airline or les- open to be able to do the work makes this there is a long-term shift in the workforce
sor can hold their margins. The MAEL strategy attractive. Operators look very from traditional airframe maintenance
management team is clear. “I absolutely favourably on MRO shops that can turn jobs – such as structural technicians and
believe we will still be punching above around an aircraft in three days. Depend- painting staff – to more licensed mechan-
our weight,” says Adams. “We are small ing where the operator is located, flying ics and avionics experts. SR Technics
but very bespoke, and we are not going to an aircraft to the Middle East could mean has been at the forefront of adapting its
take on the big guys because we are too losing a few days as well as fuel. So being practices to suit clients, and its current
busy. We are not going to be distracted based in the UK, we are in a very strong E-check, named due to its bespoke nature
from our clients by trying to compete in position and are backing that up with the for client easyJet, is proving to be a big hit
all areas. In terms of market and custom- service delivery, quality and values.” with UK low-cost carriers.
ers, we have Boeing Gold Care and the The ETS will have an effect on all facil- The elephant in the room for all MROs,
787 on the horizon with Thomson. We ities that require additional flights. One including those in Europe, is OEM mar-
have done in excess of 80 inputs for easy- facility in the firing line is Mubadala, ket incursion. Third-party maintenance
Jet last year. We have also completed a with its dedicated narrowbody airframe providers face a fundamental challenge
maintenance contract with Cyprus Air- overhaul centre in Malta. Mubadala has in the growing aftermarket influence of
ways, done by our Manchester MRO. halted a planned expansion of the cen- the original equipment manufacturers.
We are pleased about this, as previously tre in Malta for the time being because Access to construction and maintenance
it had its narrowbody and widebody it has been unable to attract customers documentation has become increasingly
contracts with different maintenance in addition to existing customer easy- restricted, as OEMs look to capture the
providers. The way it operates and its Jet. This operation was launched from a aftermarket and operate in competition
requirements are quite different to other leased two-bay hangar in October 2010, with third-party MROs and MRO data
operators – but of course no one opera- and the intention was to build a four-bay providers alike. The OEMs have reached
tor is the same – we are quite adaptive. facility by early 2012, but this was post- a critical mass on a global scale in both
We aren’t so big that we don’t understand poned in January this year. And this is clients and support facilities, made
what it is they need. We want to grow while airlines were still growing. possible by partnerships with MRO
and go beyond our current territories. The European MROs, like most facilities. The move from tradition-
The SMART team is a good example of others, are adapting to a world where ally separate onboard systems towards
that marketing strategy. If you look at maintenance events are becoming more software-controlled components on the
the rates in Middle East shops three or individualised and less predictable. 787 and A380, whereby the equipment
four years ago, it would have been worth Overhaul events, where the aircraft is in is linked up to work as an integrated
flying an aircraft down there for main- a hangar for up to a month, are becoming server network, has contributed to

80 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

further OEM control. It was most likely

EUROPE’S MRO FORECASTS (US$MILLION)
designed to do so. The OEMs hold all
the cards to control the aftermarket 25 Western Europe
in the future. MROs, like airlines, will Eastern Europe
become detached from what is going on Total $20.7
with their client fleets as new aircraft 20
come online. Airline-affiliated MRO
providers, such as LHT or AFI-KLM
$16.9
Engineering & Maintenance, still retain $15.9
a great deal of leverage at the point of 15 $13.7 $13.6
aircraft purchase and this could give $11.6
them the in-house fleet knowledge on
the 787 and A380 to carry over to retain 10
third-party maintenance business.
The MROs will have to be a part of the
various OEM aftermarket networks, as $4.8
5
increasingly large, non-maintenance- $3.4
$2.2
affiliated aftermarket orders continue
to be captured by the OEMs.
The lessors also have to be considered 0
with care by the MROs. The leasing mar- 2011 2016 2021
ket holds close to 40% of the global fleet
and will be a strong partner for any MRO. REGULATORY CONCERNS WITHIN THE of aircraft technical defects not when
Lufthansa Technik’s Henningsen thinks EUROPEAN MARKET they occur but rather when they become
the requirements of both, lease compa- There is growing concern that airline convenient to rectify. There appears to be
nies and airlines, must be met or exceeded outsourcing of maintenance is leading no real will from regulators to deal with
accordingly. “Despite the fact a leased air- to a lack of direct oversight and there- this issue across the globe, even large
craft has to have the same basic servicing fore control of maintenance activities NAA’s have allowed their oversight of
as a regular owned aircraft, there are sev- carried out on commercial passenger airlines to become compromised.
eral circumstances that call for a specific aircraft. Engineers are on the front line But the European Commission has
approach to aircraft management,” he of this problem. Their job is to ensure acted. With an increase in safety-related
says. “These include limited ownership operational aircraft are safe and fit to findings uncovered within European air-
(generally lease contracts can vary from fly. To ensure safety is monitored objec- lines by the Safety Assessment of Foreign
a few weeks to five years) and the asso- tively, licensed engineers are examined Aircraft (SAFA) programme, the Euro-
ciated short-term MRO and especially independently from their employers. On pean Union could no longer ignore the
documentation services, as well as the achieving a successful examination result, situation. In April, the EU went public
occasionally incalculable state of an air- a maintenance licence is then issued. This and published German-related safety
craft used by an airline for several years.” should provide the engineer with an ele- issues in Europe’s airline operator black-
For this reason Lufthansa Technik has ment of independence from the airline, list. Since then, however, the Commission
started offering its Aircraft Leasing and with the licensed engineer remaining the has moved very slowly on the issue of fines
Trading Support (ALTS) service. ALTS is only person authorised to certify an air- and penalties for breaches of aviation
an all-embracing product that recognises craft is ready to enter commercial service safety regulations.
and supports the dynamic behaviour of following maintenance. Although cur- In the US, the FAA has been fining air-
the owners and operators of leased com- rent aviation regulations contain clear line operators for many years now and to
mercial aircraft. Following an aircraft and specific references to the respon- great success. Large fines and the inevi-
transition, the requirements for this sibilities of these engineers, regulators table negative publicity act as a strong
aircraft are likely to change, and transfer- including the European Aviation Safety incentive for airlines to ensure safety
ring it from one operator to another often Agency (EASA) have failed to enforce is truly paramount. Airlines in the US
means far more than just changing the the requirement that an engineer have are named and shamed by such actions
cabin interior or the paint scheme on the the final say independently of their and this can only be in the best interests
fuselage. Depending on aircraft age and employer. The result is that airlines have of both the passenger and safety. So the
use, comprehensive maintenance might been able to severely reduce the influ- ongoing EU consultation into introduc-
have to be carried out to comply with ence of licensed engineers. At this time ing a similar system in Europe is welcome,
re-delivery conditions and certain air- the non-reporting of aircraft defects and but there are concerns the process has lost
worthiness requirements in the countries abuse of the minimum equipment list momentum, and many engineers remain
of future aircraft operators. This product (MEL) is fast becoming common prac- sceptical the 2008 EU whistleblower pro-
looks set to gain momentum over the tice, which some commercial airlines are tection legislation will save them if they
coming years. supporting. This involves the reporting turn on their employers.

www.airlineeconomics.co Airline Economics: MRO Global 2011 81

EUROPE

Monarch Aircraft Engineering

Based in the UK and at several inter- Boeing says the TUI group is to begin
national locations, Monarch Aircraft taking delivery of 787s in 2012. Imple-
Engineering (MAEL) is an award-win- mentation of the GoldCare service will
ning MRO ideally placed to provide begin about 12 months prior to delivery.
value-adding aircraft maintenance and For each of its 787s, TUI has committed
engineering solutions to include heavy to GoldCare for 12 years, which is when
maintenance, line maintenance, design the first heavy check for the 787 will be
services, engineering and consultancy. required. As Boeing continues to roll out
The MRO can also offer full component GoldCare across the aircraft range, Mon-
support, and Part 147 technical training arch Aircraft Engineering will continue
for Airbus and Boeing aircraft types. to work on building capability for the
Monarch Aircraft Engineering has additional GoldCare types.
had a highly successful 2011, having
secured a number of large long-term con- HEAVY MAINTENANCE
tracts for MRO services, including a deal Heavy maintenance, from ‘A’ checks up
with Thomas Cook Scandinavia for heavy to heavy ‘C’ and ‘D’ checks on Boeing and
maintenance support of the Airbus A321 Airbus family aircraft, are carried out at
C-checks, which also included embodi- Monarch Aircraft Engineering’s hangar
ment of Rear Spar Corrosion Service facilities at London Luton and Manches- station at Male International airport in
Bulletins. Jens Elm Nielsen, technical ter International airports. the Maldives. This technical handling
director for Thomas Cook Scandinavia, With a highly experienced and agreement will take place throughout the
said: “We are delighted that Monarch motivated team, the MRO is ideally winter season, when XL Airways France
Aircraft Engineering has demonstrated positioned to meet all heavy mainte- will operate flights to Male from Charles
it is able to provide us with a high-quality nance requirements. Since the business De Gaulle. Patrick De Mare, line mainte-
maintenance service at excellent value.” was established in 1967, MAEL has nance manager for XL Airways France,
Despite a buoyant year, Monarch Air- conducted many thousands of heavy said: “Our extension of this agreement is
craft Engineering saw its ambitions of a maintenance checks, major modifica- testament to Monarch’s professionalism
home fleet of 787s end in 2011 when sis- tion campaigns and complex structural and the first-class service it provides. We
ter airline Monarch Airlines cancelled repairs for clients around the globe. More look forward to its continued support in
its long-delayed order in the third quar- recently, Monarch Aircraft Engineering the Maldives this winter.” In September
ter. The business does not have much has formed a team of specialist engineers the same line station also signed a tech-
to worry about, however, as the MRO who have completed more than 100 Rear nical handling agreement with Alitalia
has been an approved Boeing GoldCare Spar repairs for its customers. to provide full maintenance support for
maintenance provider since 2009, and the Italian based airline’s Airbus A330
this success places the business in a strong LINE MAINTENANCE aircraft operating out of Male in the
position for the future. Monarch Aircraft Line maintenance is carried out across Maldives. Agrimi Alessandro, manager
Engineering was selected by Boeing as the globe, with permanent stations of line maintenance, sales and procure-
the airframe MRO supplier for GoldCare established at London Gatwick, London ment for Alitalia said: “Monarch Aircraft
launch customer TUI Travel with its 13 Luton, Birmingham International, Man- Engineering has provided us with a cost-
787s, and is the only Boeing GoldCare- chester International, Malaga, Alicante, effective maintenance solution, which
approved supplier in the UK. Canary Islands, Kiev, Goa and the Mal- suits our business needs.”
UK-based Thomson Airways is one of dives, where line maintenance technical In September, Monarch Aircraft
four TUI group airlines due to operate handling is carried out on Boeing 737CG, Engineering secured a line maintenance
the 787. Thomson was created follow- B737NG, B757, B767, B777, Airbus technical handling agreement with Turk-
ing the merger of Thomsonfly and First A300-600, A300B4, A310, A320 family ish Airlines. The agreement sees the
Choice, which in 2007 became the first and A330 aircraft. MRO provide support to the Turkish
787 customer to publicly state it intended Monarch Aircraft Engineering’s base operator’s twice-weekly flights into Gat-
to sign up for the GoldCare package. The at Male in the Maldives has had a great wick for its Airbus A310 freighter fleet.
other TUI subsidiaries now scheduled Q3 2011, having been selected for a line Osman Ozdilek, line maintenance out-
to receive 787s, plus the full GoldCare maintenance technical handling agree- station manager for Turkish Airlines said:
maintenance, engineering and material ment with XL Airways France. The “This agreement reflects Turkish Air-
management package, are Sweden-based agreement sees the business continue to lines’ decision to strengthen our working
Tuifly Nordic, Belgium-based Jetairfly provide support for the French airline’s relationship with Monarch and we look
and Dutch carrier Arkefly. fleet of Airbus A330 aircraft from its line forward to its continued support.”

82 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

o0RQDUFK$LUFUDIW(QJLQHHULQJ it is able to provide power-by-the hour are approved under Part 147 by the UK
programmes or single unit loans and Civil Aviation Authority and are able to
LVDQDLUOLQH052DQGDVVXFK exchanges. Through its consulting divi- complete the training in Monarch’s own
ZHDUHDFXWHO\DZDUHRIWKH sion, it can also provide expert advice on facilities if preferred, at the client’s own
initial provisioning strategies. facilities worldwide.
QHHGVRIDQDLUOLQHRSHUDWRU To ensure instructors remain at the
DQGZHUHDOO\NQRZZKDWDQ COMPONENT MAINTENANCE CENTRE forefront of aviation technology and to
$2*RUUHWXUQWRVHUYLFHGHOD\ Situated at its London Luton and Man- support the company’s status as a Boeing
chester facilities, Monarch Aircraft GoldCare provider, they have attended
PHDQVLQWHUPVRIFRVWDQG Engineering has established a mod- and completed the first EU-based EASA-
SDVVHQJHULPSDFWp ern Component Maintenance Centre. approved Boeing 787 training courses,
The facility has a full range of special- and will now begin to develop this train-
Monarch Aircraft Engineering has ist tooling and test equipment and can ing capability in-house.
also this year extended its line mainte- provide services for mechanical, avion- Next year will be equally busy for
nance technical handling agreement ics, safety equipment and engines. The Monarch Aircraft Engineering as it seeks
with Aer Lingus. The agreement sees Composite capability is MRO leading to develop other revenue opportunities
the business continue to provide support and a key area of growth for the future in support of the growing customer
to the Irish flag carrier’s fleet of Airbus as new technology aircraft enter into base. When asked how the company can
A320s at its line stations in Gatwick. service. The Component Maintenance help clients get through these worry-
Dominic Ryan, director of maintenance Centre turn times lead many other sup- ing times, sales and marketing director
and engineering for Aer Lingus said: “We pliers, thus assisting with the supreme Ian Bartholomew commented: “We are
are delighted to be continuing our ongo- on-time performance Monarch Aircraft committed to seeing our customer oper-
ing working relationship and extending Engineering continues to deliver to its ations succeed and working closely with
this line maintenance agreement.” customers. Whether an individual com- them, we challenge non-value-adding
ponent repair or a long-term contract to processes and find innovative ways of
DOWN ROUTE AOG SUPPORT support operations, MAEL’s highly moti- working together. We are now seeking
AND RESCUES vated and flexible workforce can provide out opportunities with potential cus-
With a large number of line maintenance a cost-effective maintenance solution. tomers in two of the largest emerging
clients and its sister Airline Monarch, markets, developing new and increasing
Monarch Aircraft Engineering is acutely ENGINEERING SERVICES revenue streams from training, technical
aware of the significant impact to air- Monarch Aircraft Engineering, with its consultancy, spares trading and engi-
line operations and revenues when AOG highly skilled workforce, can assist air- neering services management.”
events are not responded to immediately. line operators with a multitude of fleet
The business has created a Specialised support solutions, including planning, HOW CAN POTENTIAL CUSTOMERS
Monarch AOG Response Team (SMART) technical records, technical service sup- BENEFIT FROM AN AGREEMENT WITH
comprising highly qualified engineers port, reliability management, engine MAEL OVER COMPETITORS?
who are available 24/7 and are armed trend monitoring, and warranty and Bartholomew says: “Monarch Aircraft
with the necessary tools and equipment consultancy service, to name but a Engineering is an airline MRO and as such
to carry any AOG or specialist support few. As an approved Part 21J Design we are acutely aware of the needs of an air-
requirements. This service is available on organisation it has built up an enviable line operator, and we really know what an
demand and is managed through Mon- reputation for modification design on AOG or return-to-service delay means in
arch’s Integrated Operations Centre. many different aircraft types. The design terms of cost and passenger impact. We
Since introduced, SMART has been dis- capability – coupled with the extensive are located at major airports in the UK
patched on more than 60 occasions to 17 Part M engineering knowledge and and overseas, and we can offer a fully net-
different countries, and the rescues have capability lends itself to a full turnkey worked total MRO management solution.
ranged from a routine test or basic com- solution for operators who have to flex We are also sized to meet the demands
ponent change, to engine changes and and change the fleet configurations and of large customers and not too big to be
major structural repairs, in some of the sizes to meet today’s very demanding unable to adapt to smaller operators. We
toughest locations. and changeable market. are nimble, dynamic and innovative and
can flex our services to suit.”
COMPONENT SUPPORT TECHNICAL TRAINING In exceptionally tough times for our
Monarch Aircraft Engineering has a Monarch Aircraft Engineering’s tech- industry, Monarch Aircraft Engineering
team of experts who can advise clients nical training facility has gained a has demonstrated it can provide cost-
about the benefits of contracting for full worldwide reputation for its continu- effective and innovative solutions for its
component and material support across ing high standards providing full EASA customers and is determined to develop
both Airbus and Boeing aircraft types. Part 147 B1 and B2 courses and Part and grow the business as it enters into
With an extensive component inventory 66 category A basic training. Its highly the next phase of its long-standing
with both EASA and FAA certification skilled and professional instructors history.

www.airlineeconomics.co Airline Economics: MRO Global 2011 83

EUROPE

Lufthansa Technik
Lufthansa Technik is one of the leading intellectual property. These challenges this type of aircraft in the coming years,”
manufacturer-independent providers of can only be handled successfully by MRO Heerdt says. “From the base maintenance
maintenance, repair, overhaul and modifi- providers operating globally and at a side, Lufthansa Technik has recently
cation services in the civil aviation industry. certain scale, having the ability to tailor launched a new T-product (‘T’ for ‘total’
With tailored maintenance programmes packages to individual needs.” – the product is offered by LHT for every
and state-of-the-art repair methods, LHT LHT is looking to further grow its kind of MRO service) called TBS – Total
ensures the unbroken reliability and avail- market share through the launch of Base Maintenance Support. The TBS is
ability of its customers’ fleets. new MRO services for the B748, B787, especially designed to make base mainte-
Walter Heerdt, LHT’s senior vice- EMB190 and A380. nance easier for fleet operators, and offers
president for marketing and sales, says: “As Lufthansa is one of the first cus- a broad range of included and optional
“Lufthansa Technik has survived the last tomers for the new Airbus A320neo sub-products as well as different financ-
economic and financial crisis relatively series, Lufthansa Technik will defi- ing models to better suit each operator’s
well through increases in efficiency, high nitely extend its MRO capabilities to financial situation or preferences.”
use of flexible working hours and pro-
cess innovations.” The Lufthansa Technik AIRFRAMES SERVICED: ENGINES SERVICED:
Group comprises more than 30 subsid-
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spare parts.” Heerdt is bullish on future COMPANY FACILITY LOCATIONS
Lufthansa Technik AERO Alzey GmbH, Lufthansa Technik Maintenance
growth for the MRO market. “We think the
Alzey, Germany International,
MRO market will further increase in the Frankfurt Airport, Germany
next years including the business with sur-
Lufthansa Technik AG, Hamburg,
plus parts, as the use of surplus parts Lufthansa Technik Malta,
Germany
enables the operators to save costs. In the Luqa, Malta
end it is an individual strategic and eco- Lufthansa Technik Airmotive Ireland,
nomic decision of the specific operator if County Dublin, Ireland Lufthansa Technik Milan,
and how much it will go this way,” he says. Somma Lombardo (VA), Italy
But he also admits further consolida- Lufthansa Technik Brussels,
Steenokkerzeel-Melsbroek, Belgium Lufthansa Technik Philippines,
tion is expected. “Despite new entries,
Pasay City, Philippines
we see an ongoing consolidation process
in the MRO industry. The introduction Lufthansa Technik Budapest , Budapest,
Hungary Lufthansa Technik Sofia, Sofia, Bulgaria
of new aircraft generations and engine
types is combined with high investments Lufthansa Technik Switzerland
Lufthansa Technik Intercoat GmbH,
in infrastructure, tools and employee Kaltenkirchen, Germany Basel, Switzerland
training and complex questions about

84 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

MTU Maintenance
MTU Maintenance provides custom- MTU MAINTENANCE HANOVER,
ENGINES SERVICED
ers with service packages and one-stop LANGENHAGEN, GERMANY
CF6-50, CF6-80C2, CFM56-7, V2500,
solutions for all current engine types of The Langenhagen facility is the cen- 18
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practically all thrust categories. Its line trepiece of the MTU Maintenance group. 18
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of service includes the maintenance of It is responsible for the maintenance Turbines LM 2500, LM5000, LM6000, CF6-
commercial engines and component of medium- and large-size commer- 
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repair. Its portfolio is rounded out by cial engines. These include the General
comprehensive additional services, such Electric CF6-50 and CF6-80C2, Pratt & leasing, 24-hour AOG service, training
as engine leasing through its e.pool ser- Whitney PW2000, International Aero and Total Engine Care. The location is
vices. The MTU maintenance segment Engines V2500 and CFMI CFM56-7. MTU’s centre of excellence for high-tech
operates affiliates in Germany, Canada, Comprehensive service offerings comple- repairs, which is busy developing novel
China and Malaysia. ment the company’s line, such as engine repair techniques.

Iberia Maintenance ADDITIONAL AIRCRAFT SERVICES

MAJOR TOPICS:
Minor checks: A
Because of its near 80 years of experi-  Fhk^maZg1)r^ZklÌ^qi^kb^g\^ A310
ence on the Iberia fleet and for third  :efhlm*))bgm^kgZmbhgZemabk]&iZkmr """
A330
parties, Iberia Maintenance increas- customers
"
ingly is exploring ways to help customers,  :khng]-%)))^fiehr^^l
B707
keeping not just costs but also efforts to  L^o^g aZg`Zkl% mph ]^]b\Zm^] _hk B757
a minimum on airframe heavy main- painting B767
tenance, engine overhaul, component  >g`bg^m^lm\^ee\ZiZ\bmr3*))%)))e[l' MD80s
maintenance and field maintenance.  Fhk^ maZg .)%))) \hfihg^gml
Moreover, Iberia Maintenance provides repaired a year Major checks: C, overhaul and struc-
essential, sector-specific services custom-  <ZiZ[bebmr eblm bg\en]^l fhk^ maZg tural
ised to fit client needs and budget. 3,000 components with 14,000 P/N. """
A330
With almost 4,000 experienced techni-  +.)%)))iZkmlgnf[^klbglmh\d
"
cians and engineers, Iberia Maintenance
B707
provides a wide array of MRO solutions, AIRFRAME MAINTENANCE SERVICES B757
from relatively simple options to the more Almost 150,000 m2 gives Iberia Main- MD80s
complex ones. tenance space to perform a wide range Gulfstream
In every Iberia Maintenance service of airframe maintenance. The facilities 'BMDPO
'BMDPO

there are hundreds of hours dedicated include the necessary back-up shops such Hercules C-130
to improve process, reduce turnaround as safety equipment, structural repair, P3 Orion
times, increase force effectiveness and cut wheels and brakes, galleys, interiors,
Emergency equipment (available in
down on logistics and engineering man- painting, marking and labelling provid-
stock)
agement expenses. ing services in material processing for
Slide ramps
With the new aviation environment wide- and narrowbodies. Fire extinguisher cylinders
and the expanding globalisation of the Iberia Maintenance offers seven Slide raft and door cylinders
MRO industry, Iberia Maintenance has complete production lines for heavy Oxygen cylinders
updated its management and technical maintenance checks and two dedicated 8IFFM
BOE
CSBLFT
BWBJMBCMF
JO
TUPDL
services, gearing them towards developing hangars for painting, marking and label-
concrete solutions to help clients define ling works. Painting, marking and labelling
maintenance plans and ensure efficiency. It handles a wide range of temporary (temperature and humidity computer
controlled hangar)
The installation of the SAP system and permanent hole and dent repairs on
for complete management has been very wing and in shop from different com-
Major modification of avionics and
successful. posite and metallic parts in fuselage interiors
and flight controls. It also offers refur- Composites
STATS AT A GLANCE: bishment, ageing aircraft and corrosion Cabin interiors
 ÷,./'.fbeebhgmabk]&iZkmrmnkgho^k prevention programmes.
 +))%)))ljfFKH_Z\bebmb^l Portable and fixed oxygen cylinders, fire

www.airlineeconomics.co Airline Economics: MRO Global 2011 85

EUROPE

CFM56-5A1/-5B/-5C4/-7x, CF34-3A1/-
3B1, JT8D-217/-219 engines and a full
range of engine accessories, in accordance
with its capability list.

ENGINE FULL OVERHAUL:

RR RB211-535E4
RB RB211-535C37
RR PEGASUS MK 150/-152/-157
CFMI CFM56-5A/-5B/-5C
CFMI CFM56-7B
GE CF34-3A1/-3B1
PW JT8D-217/-219

Iberia Maintenance is one of Europe’s

maintenance providers that is still grow-
ing. Recently, it added CF34-3A1/-3B1 to
its maintenance portfolio (which already
includes CFM56-5x /-7x, RB211-535E4
and JT8D-217/-219).
Each operator has its own unique
engine maintenance requirements. Expe-
rienced and highly trained technicians
and engineers are committed to giving
customers the highest quality service and
spare parts support in the industry.
The focus is on parts repair wherever
possible to avoid costly replacements.
By employing an efficient workforce
and developing the most productive
maintenance workscopes, Iberia works
to improve on-wing durability and reduce
extinguishers, slide raft and door cylinders FULL LINE MAINTENANCE COVERAGE non-scheduled events or requirements.
can be recharged immediately. Pre-flight To ensure a competitive service the
Furthermore, its seven day/24-hour Transit company has committed to reduce unfore-
AOG service provides the most effec- Daily seen turnaround time.
tive and flexible support on emergency Service Iberia Maintenance provides MRO
service. Weekly and engineering services for engine,
A-checks APUs, power-generation systems and
LINE MAINTENANCE On-call requirement/support associated accessories and thrust reverses.
Iberia Maintenance knows every minute On-wing support Iberia Maintenance has a 100,000 lbs
that an aircraft is on ground represents a Full member of Line Maintenance test cell capacity.
loss of potential airline revenue and how a Organisations
skilled workforce is absolutely necessary in IATP APU FULL OVERHAUL
reducing downtime for line maintenance. International Airlines Technical Pool GTCP85-98DHF (MD80)
It provides line maintenance services ELMO GTCP36-300 (A320)
at Barajas Airport (Madrid-Spain) and European Line Maintenance 131-9A (A320)
in strategically located centres around Organisation
the world. MAJOR TOPICS:
Precision repairs and testing is per- POWER PLANT MAINTENANCE SERVICES Full overhaul including parts repair
formed by highly skilled technicians. The engine repair centre assist custom- Engine lease pool
Furthermore, it offers to dispatch emer- ers in the design of customised services to LRU pool
gency teams of expert mechanics to any suit any specific requirements. The repair On-wing support
location around the world, another flex- centre is integrated in Iberia Mainte- Engine trend monitoring
ible and very affordable alternative. nance global maintenance network. Work scope preparation
Iberia Maintenance technicians are Occupying an area of 52,560 m2, Ibe- Full range of engine services
very aware of the aircraft’s needs and are ria Maintenance provides MRO services Round-the-clock spare parts service
very proud when a customer is satisfied. for the RB211-535E4, RB211-535C37 Test cell capacity: 100,000 lbs.

86 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

Sabena Technics
LINE MAINTENANCE
AIRCRAFT SERVICED
Important platforms providing services
Airbus A300 B2-B4, A300-600, A310,
A319CJ, A320 family, A330, A340, C-160 24 hours a day, seven days a week include
5SBOTBMM
#PFJOH
#
5$"
#
$(/(
Brussels and Paris Charles de Gaulle, as
##
#
#
%$
%$
well as numerous outstations adaptable
DC-10, KDC-10, MD-11, MD-80, MD-90, to customers’ needs.
"53

"53

#"F

#"F
3+


Bombardier Canadair CL-415, Dash 8, LIGHT MAINTENANCE
$3+

$3+

5XJO
0UUFS
%BT- Modern hangars and expert technicians
sault Falcon 20, Embraer ERJ 135, ERJ
across numerous sites provide quality
145, Xingu, Fokker F70, F100, Grum-
and proximity services with, if necessary,
man Tracker, Lockheed Martin C-130
Hercules the assistance of the infrastructure the
firm’s heavy maintenance activities offer.

COMPANY FACILITY LOCATIONS HEAVY MAINTENANCE

Brussels Sabena Technics benefits from a pool of
Paris expertise specialising in regional, Airbus
Dinard and Boeing aircraft heavy maintenance
Bordeaux
services. Sabena Technics’ service offer-
/JNFT

ing and centralised slot management
Merseille
Moscow system enable it to offer unrivalled flex-
Monastir ibility and adaptability tailored to the
Koweit customer’s needs.
Singapore
Papeete MODIFICATIONS AND UPGRADES
/PVNFB
Sabena Technics benefits from the modification and upgrade services.
Phoenix experience of a strong engineering Recent projects include first and busi-
Miami
department, an EASA Part 21J design ness class cabin modifications and IFE
Louisville
office and an EASA Part 21G product upgrades, VIP cabin modifications and
Martinique
office, providing an array of à la carte implementations of ATC/TCAS.

TAP M&E
TAP Maintenance & Engineering (TAP ery of products (aircraft, engines and and DC10, Embraer EMB120 (Brasí-
M&E) is the MRO organisation of TAP components) and services. TAP M&E is lia), ERJ 135, ERJ 145, EMBRAER 170,
Portugal, the Lisbon-based operator, therefore committed to offer its custom- EMBRAER 175 and EMBRAER 190,
which provides maintenance and engi- ers cost-efficient maintenance with short EMBRAER 195 and Legacy 600 and
neering services in aircraft, engines and turn-around times and high quality and Lineage, Airbus A300, A300-600, A310,
components. TAP M&E is duly certified reliability standards. A320, A330 and A340.
by several aviation authorities among TAP M&E Brazil has the most up-to-
which are the FAA and EASA. date MRO technologies – including the SERVICES OFFERED INCLUDE:
Since the foundation of TAP, in 1945, only Inertial Navigation System in Latin Daily and overnight checks
TAP M&E has been responsible for the America, one of the five Griffon GTW-U3 Components overhaul
maintenance of its entire fleet, pres- cylindrical milling machines in existence Engineering projects with technical
ently with more than 50 Airbus aircraft. in the world, and a horizontal Gemini support
In the 70s TAP started providing ser- GE-1600S lathe, which can machine very Interiors projects and overhaul
vices to third-party customers – this now long parts for the landing gears repair Avionics systems and installations
accounts for more than half total revenue. services. projects
The long-term involvement with a The company is certified to maintain Airframe repair, projects and
commercial operator made TAP M&E the entire Boeing line 727, 737Classics, improvement
aware of the importance of on-time deliv- 737NG, 747, 757, 767, 777, BBJ, MD11 A, B, C and D checks

www.airlineeconomics.co Airline Economics: MRO Global 2011 87

EUROPE

AFI-KLM E&M
AFI KLM E&M provides MRO services guarantees its independence when to fixed prices, or different kinds of
while also guaranteeing a whole raft of it comes to choosing the most effec- flight hours programmes.
requirements ranging from safeguard- tive options for customers’ engines.
ing air safety, properly managing aircraft AFI KLM E&M is able to get the best ENGINES:
operation, and minimising costs. The from its strong partnership with OEMs Measurements carried out on engines
firm has a 75-year-plus track record, as well as to develop alternative solu- provide daily data, allowing the AFI
Photo: Patrick Delapierre/AFI-KLM E&M

during which it has achieved a level of tions that increase customers’ benefits. KLM E&M engineering team to monitor
undisputed excellence in managing performance (such as, fuel consumption,
large aircraft fleets. The operating units AFI KLM E&M PROVIDES: EGT margin, oil consumption) and rec-
responsible for production place their  `nZkZgm^^]M:M4 ommend on-wing maintenance actions.
skills in the service of Air France-KLM’s  ^g`bg^^kbg` ^qi^kmbl^ mh himbfbl^ This approach leads to increased engine
fleet as well as those of its customers. both costs and Mean Time Between on-wing lifespan; incident prevention;
AFI KLM E&M has set up a combined Removal (MTBR); and reduced engine operational and
organisation responsible for strategy,  lehmÖ^qb[bebmrmakhn`abml^g`bg^FKH maintenance costs.
marketing, business development, sales network; Drawing on its extensive operational
force (present throughout the world)  phkdfZglabijnZebmr[Zl^]hgZab`aer expertise, AFI KLM E&M can recom-
and external communication. skilled and experienced labour force; mend customised engine performance
Its airline-MRO position also  \hgmkZ\mÖ^qb[bebmrkZg`bg`_khfMF monitoring parameters.

88 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

Turkish Technic
Turkish Technic is the provider of main-
tenance, repair and overhaul operations
primarily to the Turkish Airlines fleet in
its existing facilities at Istanbul Ataturk
International Airport. It also provides
services to various customer airlines from
Turkey and surrounding countries.
The years of experience earned within
the existing technical facilities, combined
with the developed and well-qualified
labour force, the strategic location and the
increasing market demand has pushed
Turkish Technic to setup a new MRO
facility. The new facility will be located at
the Sabiha Gökçen International Airport,
an area reserved for the set-up of an inter-
national MRO centre, which is around
70 km’s away from the existing facilities indicate quick fleet growth and increas- agreement was signed with Pratt & Whit-
located at Istanbul Atatürk International ing outsourcing rates. ney on January 8, 2008. Pratt & Whitney
Airport, Yesilköy. The geostrategic loca- The estimated total investment is one of the most important OEMs in the
tion of the new facility will enable the new requirement for the airframe and com- engine segment and a strong player in the
maintenance centre to reach to Euro- ponent maintenance centres on the engine aftermarket.
pean, Asian, North African and Middle whole is around US$500 million. By the The company also signed a memoran-
Eastern MRO markets, as well as the year 2020, Habom is estimated to gen- dum of understanding with Goodrich
Turkish market. erate a $1 billion share of the airframe Aerostructures on November 8, 2007 to
The new international maintenance, and component maintenance segments. establish a joint-venture company on the
repair and overhaul centre project and all Turkish Technic will be the permanent nacelle and thrust reverser maintenance,
the investments by Turkish Technic within shareholder of the Habom Project. repair and overhaul segment. Goodrich
Sabiha Gökçen International Airport, are Besides that, Turkish Technic is aiming Aerostructures is the leading OEM in this
named as the Habom Project (Havacılık to establish these new investments as an area. Negotiations on the joint-venture
Bakım Onarım ve Modifikasyon Merkezi international joint venture with the par- agreement with Goodrich Aerostruc-
– in English the Aviation Maintenance, ticipation of a leading global company or tures are ongoing.
Repair and Overhaul Centre). companies. With this new investment, Considering the growth trend in the
Istanbul will be the maintenance hub of Turkish aviation industry, and the quickly
THE HABOM PROJECT the region within a short time period. growing fleets of the other airlines, the
During the establishment of the business Airframe maintenance centre facilities total aircraft number within Turkey is
plan for the Habom Project investment, at Sabiha Gökçen International Airport estimated to be over 300 within a short
the Turkish Technic project team has will have a total 372,000 m2 area. There time period. Adding the highly increas-
worked together with world-renowned will be approximately 3,500 employ- ing aircraft numbers of the surrounding
consulting firms and established a ees within the maintenance, repair and region leads up to the idea of establishing
feasibility study to assess the various overhaul centres established within the a completely new maintenance centre at
opportunities, market demand and Habom Project. the heart of these emerging markets.
required investments to meet those All the facilities that will be constructed Habom Project, as a newly established
demand for the establishment of this new within the scope of the Habom Project and a totally customer-oriented mainte-
international MRO centre. As a result are environmentally friendly designs that nance centre, will aim to serve the aircraft
of these studies, the new international will provide maximum energy savings. belonging to various surrounding coun-
maintenance centre is designed to be a tries. One unique feature of the Habom
full service provider for both narrowbody FOREIGN PARTNERSHIPS Project area is that a circle drawn with
and widebody aircraft, by doing heavy Turkish Technic aims to establish inter- a radius of three-hours flight distance
maintenance, engine and components national joint ventures with potential centred at Istanbul includes 55 coun-
maintenance. The maintenance centre partners that are leaders and global play- tries. This ensures many opportunities
will be established as a centre-of-excel- ers in their segment and that will bring for doing MRO business at the Habom
lence, having full capacity for specific with them the desired technology and Project area with the establishment of a
types of aircraft for which the projections know-how. As a result, a joint-venture greenfield facility.

www.airlineeconomics.co Airline Economics: MRO Global 2011 89

EUROPE

MRO Directory: Europe

HEAVY MAINTENANCE DIRECTORY - EUROPE
$0.1"/: $0/5"$5
%&5"*-4 AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES
Aeroplex of *NSF
/FNDTPL 737 A-D 
XC $1$1
"HFJOH
BD
NPET
*OUFSJPST

Central Europe Business development director 767 A-C 
OC
Refurbishments, Composite repairs,
PO Box 186 A320-family A-C 7,253 m2 Sheet metal work, 1IBTFJOPVU
JODM

Budapest '
A-C lease returns), Engineering services,
Ferihegy International Airport -PHJTUJDT
TVQQPSU
/%5
H-1675
Hungary
Tel: +36 1296 7214
Fax: +36 1296 7218
E-mail: [email protected]
airberlin technik 4UFWFO
8JMMJBNT 737 A-C Düsseldorf, Munich Component support, Engineer-
(Part of the Head of Technical Sales 757 A-C Base Maintenance facilities ing mgmt, Design & modification,
Air Berlin Group) Flughafen, Halle 8 767 A-C 3 Hangars approx. 45,000m2 5FDIOJDBM
USBJOJOH
/%5
4IFFU
NFUBM

40474 Düsseldorf A319 A-C work, Modifications, Structural re-
Germany A320 A-C pairs
Tel: +49 178 94 18 444 A321 A-C
Fax: +49 211 94 18 5847 A330 A-C
www.airberlin-technik.com A340 A
Airbus Freighter Lars Becker, CEO A320 
OC
A320P2F and A321P2F passenger-to-freighter conversion
Conversion GmbH Grenzstr. 1a A321 with integrated maintenance checks
01109 Dresden
Germany
Tel: +49 351 8839 1400
Fax: +49 351 8839 1499
E-mail: [email protected] www.afc.aero
Air France Industries - Rob Pruim 737 (incl. BBJ) A-D 77 bays Exteriors, Cabin modifications, Con-
KLM Engineering VP sales international 747 A-D 7 industrial sites figuration changes, Post-delivery
& Maintenance 10
#PY

41-52
767 A-C QSPHSBNNFT
1IBTFJOPVU
JODM

1117 ZL Amsterdam Airport Schiphol 777 A-D lease returns), Engineering services,
5IF
/FUIFSMBOET
A320-family A-D Avionics upgrades, Technical train-
Tel: +31 6 51535504 ACJ A-D ing, Logistics support, Global
Fax: +31 20 6488044 A330 A-D operational & maint. Support
Email: [email protected] A340 A-D
A380 A-D
BAE146 A-D
CRJ 100-700 A-D
&3+


A-D
&
 A-D
' A-D
MD-11 A-C
Alitalia Compagnia Fabio Schinelli 767 A-S8C 700,000m2 Avionics upgrade, Composite re-
Aerea Italiana Marketing, sales 777 A-C 
IBOHBST
XJUI

XC
BOE
QBJST
/%5
-BOEJOH
(FBST
4USVDUVSBM

Fleet Maintenance & contracts management A320-family 12-yr 
OC
repairs, Cabin interiors refurb. and
Services Leonardo da Vinci Airport A330 Light Maint. 40 workshops rework, Plating processes
00054 Fiumicino DC-10 A-D Engine test cells
Italy MD-11 A-D Training centre
Tel: +39 066543 3050 MD-80 Light Maint.
Fax: +39 066543 2117
E-mail: [email protected]
ATC Lasham /JHFM
#SVDF
727 A-D 160,000ft2 (Lasham) Avionics upgrades, Corrosion con-
Sales manager 737 (incl. BBJ) A-D 
OC
trol, JAR 147 eng. Training, Lasham
ATC Lasham Ltd 757 A-D 140,000ft2 (Southend) & Major airframe & component
Lasham A320-family A-C 
OC
manufacture & overhaul, Major
Southend Hampshire AR ops sub part GU34 modifications, M tech manage-
England 5SP NFOU
/%5
Austrian Airlines Technik 3PCFSU
8BOFL 737 A-C 7*&

IBOHBST
XC "WJPOJDT
VQHSBEFT
/%5
4IFFU

MD ATM (marketing & sales) 767 A-C 24,000m2 metal, Comp. maintenance,
Airport base 777 A-C workshops Classroom & pract. training (Part
A-1300 Vienna Airport "
A-C Training Center 147), Design engineering (Part 21),
Austria A330 A-C #54

IBOHBS
OC
Executive Jet Maint.
Tel: +43 5 1766 63838 A340 A-C workshops
Fax: +43 5 1766 65115 $3+
A-C
E-mail: [email protected] '' A-C
8FCTJUF
XXXBVTUSJBOUFDIOJLBU Global Express & Chal- A-C
lenger
Cargolux Airlines Tony Arcone 737 A-C /FX
EPVCMF
CBZ

IBOHBS
Avionics upgrades, Composite
International Mgr, maint. sales & cust. svcs 747 A-C full back shop supp. Capabs repairs, Struct. repairs & CPCP, Modi-
L-2990 Luxembourg Airport 757 A öDBUJPOT
8PSME
"0(
TVQQPSU
Luxembourg 767 A
Tel: +352 4211 3290
Fax: +352 4211 3441
E-mail:[email protected]
Cimber Air Tony Bauboff /(
#JMMVOE
GBDJMJUZ A 7 bays "53
DBSHP
DPOW
*OUFSJPST
"WJ-
Maintenance VP maintenance "53

A-D 6600m2 hangar onics upgrades, VIP upgrades, CPCP
Centre Lufthavnsvej 2 CRJ200 A-D
DK-6400 Sønderborg
Denmark
Tel: +45 7412 2366
Fax: +45 7443 2458
E-mail: [email protected]

90 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

HEAVY MAINTENANCE DIRECTORY - EUROPE

$0.1"/: $0/5"$5
%&5"*-4 AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

CSA Czech Airlines Ondrej Konyvka 737 A-D 
XC Avionics upgrades, Composite re-
Director aircraft heavy maintenance A310 A-C 
OC
pair, Struct. repairs & CPCP, Interiors,
Hangar F, Praha Ruzyne A320 A-D 12,400m2 4IFFU
NFUBM
XPSL
-BOEJOH
HS
P
International Airport "53

A-D haul (737), 737-800 winglet mod.,
160 08 Praha 6 Modifications
Czech Republic
Tel: +420 2 2011 4118
Fax: +420 2 3309 6766
E-mail: [email protected]
European Fred Hilgeman 737 A-C Amsterdam - Paris On-wing eng. support Maintenance,
Director 757 A Chateauroux - Lisbon Eco engine wash Solutions, Disman-
Hamersveldse weg 84A 767 A Madrid tling of aircraft, Painting
3833 GT Leusden A320-family A-C
5IF
/FUIFSMBOET A330 A-C
Tel: +31 33 434 3040 A340 A-C
Fax: +31 33 494 8101
E-mail: [email protected]
Finnair Technical Mikko Koskentalo 757 A-D 
XC 4USJQQBJOUMBCFMMJOHNBSLJOH
4IFFU

Services Manager, Sales & Marketing A320-Family A-D 
OC
NFUBM
TIPQ
.6
$PNQPTJUF
SFQ

Finnair Technical Services A340 A TIPQ
1MBUJOH
QSPDFTTFT
/%5
$BCJO

Helsinki-Vantaa Airport "53

A-D JOU
SFGVSCNPET
4USVDUVSBM
SFQT
01053 Finnair &
A-C mods, DOA engineering Technical
Finland MD-11 A-D training, Logistics support AOG Desk
Tel: +358 9 818 6233 24H, Avionics shop Engine, APU &
Fax: +358 9 818 67 -%(
TIPQ

UFTUJOH
8IFFMT

CSBLFT
E-mail: [email protected]
Fokker Services Stephen Hands 737 A-D 
NFE
TJ[F
BD
Avionics upgrades, Structural
VP marketing and sales A320-family A-D B.V. Hangar repair, Component repair, Logistics
PO Box 3 "53

A-D programmes
Aviolandalaan 31 CRJ A-D
4630 AA Hoogerheide ERJ 145 A-D
/FUIFSMBOET F27 A-D
Tel: +31 164 618 642 F28 A-D
Fax: +31 164 618 666 ' A-D
E-mail: [email protected] ' A-D
Hapag Lloyd Uwe Kopelke 737-300 A 2 hangars /%5
"QQSPWBM
$PNQPOFOU

Fluggesellschaft mbH Manager Sales & Contracts  A-D Two base maint. bays workshops, Cabin interior, Sheet
Flughafenstrasse 10 /(
A-D Four line maint. bays metal workshop, Major system and
30855 Langenhagen A320-family A structure modification, Part-21
Germany approval
Tel: +49 (0)511 97 27 275
Fax: +49 (0)511 97 27 611
E-Mail: [email protected]
Iberia Maintenance Ignacio Diez 707 A-D 7 hangars Cargo conversion, Composite repairs
Commercial director 757 A-D 
XC & surface treatment, CPCP, Logistic
Madrid Barajas Airport, La Munoza A310 A-D 
OC
TVQQPSU
4USJQQBJOU
MBCFMMJOH
Edificio Motores 1a planta "
A-D 2 general workshops marking, Sheet metal work, Insula-
28042 Madrid A330, A340 A-D 1 painting hangar UJPO
CMBOLFUT
/%5
UFTU
6QHSBEFT

Spain MD-80 A-D Cabin & interior mod., Post delivery
tel: +34 915 875 132 Falcon 20 A-D progrms, Engineering services, Tech-
Fax: +34 915 874 991 Falcon 900 A-D nical training, Global operational &
E-mail: [email protected] Gulfstream A-D maint. Support, Avionic upgrades,
www.iberiamaintenance.com C130 Hercules A-D EASA design organization, Inventory
P3 Orion A-D mgmt
Icelandair Örn Ingibergsson 737 Classic A-D 1 hangar Avionics upgrades, Composite
Customer services /( Line maintenance 2 bays 12.500m2 (incl back- repairs, CPCP, Sheet metal work
Maintenance Centre 757 A-C shops)
235 Keflavik Airport 767 A-C
Iceland
Tel: +354 4250 142
Fax: +354 4250 188
E-mail: [email protected]
Jat Tehnika d.o.o Radoslav Ilic 727 A-D 3 hangars Modifications, Aircraft ageing
(Jat Technics Ltd.) Director, mktg, sales & contracts 737 A-D 
CBZT
OC


CBZT
XC programs, Corrosion prevention &
"JSQPSU
/JLPMB
5FTMB

"53

I 35.000m2 protection, Interior repairs, Struct.
11180 Belgrade DC-9 A-D (incl backshops) JOTQFDU

SFQBJST
4USJQQBJOU
"WJPO-
Serbia ics upgrades Engine maintenance
Tel: +381 11 2280 115 Component maint.
Cel: +381 63 8199 412
Email: [email protected]
Jet Aviation AG Michael Sattler  A-D 7 hangars Avionics, Composite repairs, CPCP,
SVP & accountable Mgr for 727, 737 (incl. BBJ) A-D 60,000m2 (incl backshops) 4USJQQBJOU
*OUFSJPST
7*1
DPNQMF-
Basel & Geneva bases 747, 757, 767 A-D tions, Sheet metal work
PO Box 214 A310 A-D
CH-4030 Basel-EuroAirport A320-family (incl. ACJ) A-D
Switzerland A330, A340 A-D
E-mail: [email protected] Challenger A-D
Global Express A-D
Learjet, Gulfstream A-D
Dassault Falcon A-D
Hawker A-D

www.airlineeconomics.co Airline Economics: MRO Global 2011 91

EUROPE

HEAVY MAINTENANCE DIRECTORY - EUROPE

$0.1"/: $0/5"$5
%&5"*-4 AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES
Lufthansa Robert Gaag 737 (incl. BBJ) A-D 
OC

XC

3+
Avionics mod, Sheet metal work,
Technik AG Dir. Central Europe 747 A-D 3 dedicated painting bays Design & modification, Freighter
8FH
CFJN
+BFHFS

757 A-D Structural mod conversions, Tanker conversions,
22335 Hamburg 767 A-D Lufthansa Technik (HAM) Thrust revr & nacelle overh., Cust.
Germany 777 A-D "HFJOH
BD
NPE$1$1 FOH
TFSWJDFT
/%5
UFTU
4USJQQBJOU

Tel: +49 40 5070 2590 "
" A-D Lufthansa Technik (SXF) Embraer, Interior completion,
Fax: +49 40 5070 8866 ""$+
A-D 4IBOOPO
"FSPTQBDF
4//


Cabin refurb, VIP & corporate refurb,
E-mail: [email protected] ""$+ A-D Insulation blankets *OUFSOFUPOCPBSE
JOTUBMMOT
*'&
A340 A-D LT Budapest (BUD) satcom Support structure, Airline
Avro RJ A-D LT Malta (MLA) support teams, Technical training
CRJ A-D LT Sofia (SOF) -BCFMMJOHNBSLJOH
&3+
A-D LT Switzerland (BSL)
MD-11 A-D -5
.BJOUFOBODF
*OUM
'3"
MD-80 A-C Coop. w. Austrian Ailines (VIE)
Saab 2000 A-D Coop. w. Croatia Airlines (ZAG)
Marshall Aerospace Michael Milne 747 A-D 
XC Conversions, design svcs, Engineer-
Director of marketing & bus. dev. 767 A-D 
OC
ing services, Installation services,
Marshall Aerospace 777 A-D 1.2m m2 *OU
NPET

SFDPOöHOT
/%5
PWFSIT

The Airport "
A-D paint remov., Project mgmnt, recov-
Cambridge DC-10 A-D ery, Renovations, repairs, support,
CB5 8RX MD-11 A-D Logistics, technical pubs, Training,
England L-1011 A-D flying, Manufacture & assembly of
Tel: +44 1223 373737 -$
A-D airframe & components Design &
Fax: +44 1223 373373 BAe 125-700 A-D manuf. of long-range fuel tanks
mick.milne@ marshallaerospace.com $FTTOB
$JUBUJPO

A-D
./(
5FDIOJD Volkan Eser 727 A-D 
XC 4VQQMZ

MPHJTUJDT
"JSDSBGU
8IFFM

Marketing manager 737 A-D 
OC
& break unit shop Maintenance,
Ataturk Havalimani B Kapisi 757 A-D 5,000m2 Emergency equip. shop Ser-
Teknik Hangar Binasi A300 A-D vices, Compressed cylinder, valve &
:FTJMLPZ*TUBOCVM

"
A-D regulator shop, Cabin interior, Paint
Turkey DC-9 A-D TIPQ
)ZESBVMJD
4IPQ
/%5
XPSLT

Tel: +90 212 465 06 86 MD-80 A-D Structural works, Composite repair
Fax: +90 212 465 06 99 Avionic works
E-mail: [email protected]
Monarch Aircraft Derek Gibson 737 line 
XC Avionics upgrades, Composite
Engineering Commercial director 757 A-D 
OC
SFQBJST
$1$1
*OUFSJPST
4USJQQBJOU

London Luton Airport 767 A-D Sheet metal work, Line mainte-
Luton ""# A-D nance, EASA 145 Part J, (Design)
Beds. LU2 9LX "
A-D EASA Part M
England A330 A
Tel: +44 1582 398 764
Fax: +44 1582 706 984
E-mail: [email protected]
OGMA Mario Lobato Faria A320-family A-D 139,000m2 Fleet management, Avionics modi-
Aviation Services VP ERJ-145-family A-D fications, Calibration, Components,
2615-173 Alverca &
A-D Engineering services, Hydrostatic
Portugal C212 Aviocar A-D testing, Aerostructures manufactur-
5FM





$-
A-D ing, Airframe assembly Composite
'BY




Legacy 600 A-D NBOVGBDUVSJOH

SFQT
.BDIJOJOH
E-mail: [email protected] Lineage 1000 A-D QMBUJOH
/%5
4USJQQBJOU
4IFFU
NFUBM
8FC
XXXPHNBQU P-3 A-D
Saab Aerotech Johan Claeson Saab 340 A-D 
OC
Aircraft inspections, Composite
Sales mgr, aircraft maintenance Saab 2000 A-D repairs, Modifications, Painting,
SE-581 88 Linköping, Sweden Refurbishments
Tel: +46 13 18 3102
Fax: +46 13 18 5115
johan.claeson @sat.saabgroup.com
Sabena Technics Damien Erceau 737 A-D Hangars for 23 aircraft -BOEJOH
HFBST
8IFFMT

CSBLFT
%SZ

TAT Group SVP Sales & Marketing 757 A-C across Europe TUSJQQJOHQBJOUJOH
$PNQPOFOUT

Tour Maine-Montparnasse BP 47 767 A-C shops, Test nacelle equipment, Lo-
33 Avenue du Maine A300 A-C gistics centre, Cabin refurbishment,
75755 Paris Cedex 15 A310 A-D Cockpit upgrade
France A320-family A-D
Tel : + 33 1 56 54 42 30 A330 A-C
Fax : + 33 1 43 21 70 91 A340 A-C
SAS Tech Birgitta Hogman 737 A-D 
OC
Avionics upgrades
SE-19587 Stockholm A320 A-D
Sweden A330 A-D
E-mail: [email protected] A340 A-D
www.sastech.net MD-80, MD-90 A-D
Shannon Aerospace Paul Murray 737 A-D 5 maintenance bays $1$1
4USJQQBJOU
&"4"

'""

Head of Marketing and Sales 757 A-D plus 1 paint bay 145 repair stn Interiors, Avionics
Shannon Airport 767 A-D 32,000m2 upgrades, Cargo conversion, Com-
Shannon, County Clare ""
A-D posite repairs, Lease end transitions,
Ireland DC-9 A-D Technical & engineering services,
Tel: +353 613 70006 MD-80 A-D Line maintenance, EASA 147 train-
Fax: +353 613 61020 ing school, 767 BS955 mods & reps,
E-mail: [email protected] A320 rib 5 modification
SR Technics Peter Kamenz 737 A-D 
XC Composite repairs, Int. refurbish-
Executive VP Sales & Marketing 747, 757 A 
OC
ment, Comp. repr & overh., Modifica-
PO.Box 767 A-D 
OC
"DIFDL
CBZT
tions, Repairs, Sheet metal work,
CH-8058, Zurich Airport 777 A 
OC
DBTVBMUZ
CBZT
/%5
$1$1
"WJPOJDT
VQHSBEF
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Switzerland A300-600, A310 A *'&TJUDPN
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Tel: +41 43 812 11 88 "GBNJMZ"
" A-D 'MFFU

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SF-
Fax: +41 44 810 97 98 F100 A verser and nacelle overhaul, Engine
E-mail: [email protected] MD-11 A-C PWFSIBVMUFTU
DFMM

92 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 EUROPE

HEAVY MAINTENANCE DIRECTORY - EUROPE

$0.1"/: $0/5"$5
%&5"*-4 AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

TAP Maintenance Carlos Ruivo 727,737,747,767,777 A-D 
XC Composite repairs, CPCP, Interiors,
& Engineering VP marketing and sales A300-600 A-D 
OC
7*1
4USJQQBJOU
4IFFU
NFUBM
XPSL

P.O. Box 50194 A310 A-D 53,380m2
1704-801 Lisboa A320-family A-D
Portugal A330, A340 A-D
Tel: +351 21 841 59 75 DC-10 A-D
Fax: + 351 21 841 59 13 MD-11 A-D
E-mail: [email protected] Embraer 120 A-D
Embraer 145 A-D
Legacy A-D
F50, F100 A-D
L-1011 A-D
TAROM Lorin Dumitrescu 737 A-nC 
XC 4USJQQBJOU
4IFFU
NFUBM
XPSL
.BKPS

Deputy Technical Director A320-family A-C 
OC
structural mods, Major avionics
#VDIBSFTU
*OUM
"JSQPSU
)FOSJ
$PBOEB
"53

A-nC mods
Calea Bucurestilor nr. 224F
Otopeni Town, County of Ilfov
Romania
Tel: +40 21 201 4549
E-mail: [email protected]
Turkish Airlines Technic Dr._smail Demir 737 A-D 2 hangars Avionics upgrades, Comp. mainte-
General Director A300 A-D )BOHBS
/P
 
N OBODF
5FTUSFQPWIDBMJC
$PN-
Maintenance Center (Bakim Merkezi) A310 A-D )BOHBS
/P
 
N posite repairs, CPCP, SSIP, Engine
Ataturk Airport (B Kapisi) A320-family A-D 
"16
PWFSIBVMUFTU
DFMM
*OUFSJPST

:FTJMLPZ*TUBOCVM

A330 A-D Modifications technical training,
Turkey A340 A-D Landing gear overhaul Painting,
Tel:+90 212 465 25 74-75 "WSP
3+
K-D HMU repair
Fax:+90 212 465 25 57 Gulfstream GIV A-D
E-mail: [email protected]

www.airlineeconomics.co Airline Economics: MRO Global 2011 93

737NG MAINTENANCE

High tech, low maintenance

Boeing designed the new generation 737 with a reduced scheduled maintenance
workload in mind. MRO Global takes a look at the various features of the new design and
the cost- and time-saving benefits they provide

W
hen Boeing was simplified and brake change time als (MTBUR) by around 75%. Mean
launched the reduced by 30%, engine removal and time between failures of flight deck sys-
737NG pro- installation time was cut by more than tems was improved by more than 60%
gramme, one of its 50% and the auxiliary power unit was through a combination of reliability,
design targets was redesigned for improved access and redundancy and Bite.
a 15% reduction in maintenance costs. maintainability. The electronics and The wing of the 737NG has 30% fewer
With that in mind, the new models’ equipment bays were also redesigned, parts than its 737 Classic predecessor,
designers worked to reduce part counts, and built-in test equipment (Bite) inter- with leading-edge panels designed to
and increase commonality among faces were made more consistent and make access easier.
models, improve the corrosion detec- user-friendly. Increased seals between Other changes that helped reduce
tion, enhance fault identification and critical parts and protective finishes the scheduled maintenance workload
improve accessibility. Boeing also used were added to prevent corrosion. A included the trailing edge flap-drive sys-
state-of-the-art 3D computer mod- digital cabin pressure control system tem. This now uses grease lubrication
els with maintenance access solids to used fewer mechanical parts than the instead of an oil reservoir: in conjunction
reserve space for parts access, removal analogue system it replaced, while with the application of corrosion-resis-
and installation. improved Bite capability increased mean tant steel in place of the original chrome
The main landing gear assembly times between unscheduled remov- plating, the new design enables the

94 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 737NG MAINTENANCE

scheduled maintenance interval to be Berlin-Schoenefeld and other locations. o%RHLQJVWDWHVWKDWHDUO\

extended from 20,000 to 75,000 flight The engine on the 737NG is the CFM56-
cycles, in line with the wishes of airlines. 7. This is overhauled at Hamburg, at LQVHUYLFHH[SHULHQFH
Redesigned air conditioning packs that Lufthansa Technik Qantas Engineering FRQILUPHGWKHQHZVHULHV
use air instead of ball bearings, similarly, in Melbourne, and at Lufthansa Technik
dispense with the need for oil servicing. Airmotive Ireland. Landing gear over- LVGHOLYHULQJVXEVWDQWLDO
At the same time, the maintenance haul is provided by subsidiary Hawker PDLQWHQDQFHVDYLQJV,$7$
steering group MSG-3 Rev 2 process uses Pacific in Los Angeles and London, in
737 Classic maintenance and reliability addition to the Hamburg and Beijing
GDWDLQGLFDWHVRYHUDOOFRVWVIRU
data to optimise maintenance intervals shops and others. There is also mainte- WKHDUHDOPRVW
for each task and allow operators to nance and overhaul of airframe-related ORZHUWKDQWKRVHIRUWKHp
group them in suitable packages rather components such as engine cowlings,
than specifying the content of each let- and the company deploys airline sup-
ter check. There are new fault reporting port teams for quick aircraft on ground Aerospace’s maintenance-by-the-hour
and fault isolation manuals, along with (AOG) support and on-wing trouble- (MBH) programmes for the 737NG
an enhanced structural repair manual. shooting. engines and components all of which
Documents are available digitally on The 737NG will continue to increase in have been popular over recent years.
CD-ROM, via the portable maintenance number over the next two decades, with Customers who have signed up for MBH
aid software tool and on the MyBoeing- the greatest growth being experienced programmes for 737NG include AirAsia,
Fleet website. New training courses have by low-cost airlines in the Asia-Pacific China United Airlines, Jeju Air, Primera
been developed to help mechanics make region. The region’s biggest MRO, Sin- Air, SAS and Xiamen Airlines.
better use of these information sources. gapore Technologies Aerospace, offers Having 737NG facilities located in
Boeing states that early in-service integrated MRO services for the 737NG the key aviation hubs across the globe
experience confirmed the new series that range from airframe maintenance means operators are assured of con-
is delivering substantial maintenance and modification, to component and sistent service standards, whether in
savings. In its second and third years of engine repair, and overhaul including Asia-Pacific, Europe or the Americas. ST
service (1999 and 2000), aggregated air- engineering and technical services. ST Aerospace and Lufthansa Technik were
frame maintenance costs for the 162-seat Aerospace’s airframe maintenance and once among the only MROs to have full
737-800 compiled from US Department modification capabilities include heavy global networks, but with the advent and
of Transportation data were nearly 10% maintenance (C and D) checks, corrosion expansion of the Boeing GoldCare net-
lower than those for the 147-seat -400 prevention and control programmes, work for the 737NG with joint ventures
in total, and 18% lower per seat. IATA and ageing aircraft inspections and with MROs across the globe, airlines are
data indicates overall costs for the 737- modifications. Close co-operation with able to obtain complete global cover-
700 are almost 14% lower than those for the original equipment manufacturers age for their aircraft maintenance needs
the -300. A joint review by Boeing and enables the company to offer 737NG cus- more readily and at less cost. Boeing
a European operator identified an 18% tomers maintenance solutions based on offers a growing range of support options
reduction in actual maintenance costs actual OEM data. ST Aerospace already for the 737NG, ranging from parts sup-
for the year to June 1999. has a materials services agreement and ply to support for electronic logbooks
A study carried out in the mid-2000s an engine overhaul support agreement hosted on electronic flight bags (EFBs).
by the University of Westminster for with engine manufacturer CFM. Its As well as maintaining what it claims
Eurocontrol attempted to quantify CFM56-7B capabilities include on-wing is the industry’s most comprehensive
maintenance costs in order to estab- and spare engine support, engine lease spare parts sales and distribution net-
lish the costs resulting from aircraft programmes, engine sale and lease-back work, Boeing offers repair, overhaul and
suffering technical delays at the gate. programmes, and engineering support. exchange services covering avionic and
It suggested that by the end of the last The company also offers maintenance, hardware components. Its global airline
decade the maintenance cost per block repair and overhaul of a wide range of inventory network programme manages
hour for a 737-800 was in the range of 737NG components, including landing the supply chain for expendable airframe
$500–670, compared with $690–900 gears, along with component exchange parts, and materials management solu-
for the -300, $710–930 for the -400 and services on demand from an extensive tions are offered under the integrated
$570–770 for the -500. component and rotables inventory for materials management (IMM) pro-
The now large and still growing aircraft on-ground situations. gramme. IMM is intended to relieve
737NG fleet has led Lufthansa Technik As part of an integrated service ST airlines of the burden of purchasing,
to extend its 737NG support capabilities Aerospace can offer customised solu- inventory management and logistics of
gradually in line with fleet increases. It tions to fit the operational requirements expendable aircraft parts: Boeing and
now carries out heavy maintenance at of a wide range of customers with very its suppliers, which include Hamilton
Shannon Aerospace in Ireland, Ameco diverse needs: Fixed fee per flight hour Sundstrand and Honeywell, own the
in Beijing, Budapest in Hungary and schemes, integrated services and cus- parts, which are stored near an airline’s
Sofia in Bulgaria, as well as C-checks at tomised solutions are offered with ST base and paid for only as they are used.

www.airlineeconomics.co Airline Economics: MRO Global 2011 95

737NG MAINTENANCE

In 2006 Boeing spent $2 billion on the CFM56-7. The CSP, located alongside the network, which covers 737NG com-
acquisition of Aviall, until then one of the partners’ joint spares distribution centre ponents such as nacelles and landing
biggest independent providers of parts near Amsterdam Schipol, makes a pool gear. Both Spirit AeroSystems and the
and aftermarket service, to enhance and of high-value components available to Goodrich Aerostructures service cen-
accelerate the IMM programme. members, reducing their inventory and tres in Singapore and Scotland provide
Boeing and KLM Engineering & repair costs by as much as 30%. By 2009 nacelle component repair and overhaul
Maintenance (KLM E&M) established the 737NG CSP was supporting a global services.
the 737NG component services pro- pool of around 200 aircraft. Airframer In 2008 Boeing extended the landing
gramme (CSP) in 2005, following the and MRO have equal shares in the inven- gear overhaul and exchange programme
formation of a similar programme for tory: Boeing manages the repair of its initially established for the MD-11 in
the 777 with Air France Industries in own proprietary parts, and KLM E&M 1997 to include the 737NG, among other
2003. KLM E&M already provided handles the rest. models, with Messier Services Asia,
base maintenance for the 737NG, and Boeing has also been developing a SR Technics and Guangzhou Aircraft
overhauled 737 landing gears and the component repair and leasing services Maintenance Engineering (Gameco) as

96 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 737NG MAINTENANCE

and MROs, including Ryanair, South-

west Airlines and Turkish Technic have
all been signed up for some time now.
Enhancements over recent years include
the ability to integrate with parts provi-
sioning systems, on-demand training
and additional engineering tools that
will enable operators to evaluate alter-
native courses of action.
Also available via MyBoeingFleet is
the now-vital Airplane Health Man-
agement (AHM) maintenance decision
support capability, which collects, moni-
tors and analyses real-time data such as
maintenance messages and flight deck
effect faults from the aircraft condition
monitoring system (ACMS) to determine
current and predicted serviceability.
Automatic notification of issues identi-
fied in this way is sent to operators. On
the 787 this facility is key, and the sign-
up by Boeing at point of order to AHM
has been impressive. AHM also collects
data from EFB-equipped aircraft, which
has a growing number of 737NG users
for the Class 3 (built-in) EFB more com-
monly found on the flight deck of the
777, but in March 2009 Boeing revealed
it had reached an agreement with Ester-
line CMC Electronics to provide Class 2
(that is, installed but removable) EFB
hardware, initially on the 737NG and
subsequently on other models for both
production and retrofit. As well as the
CMC PilotView hardware, Boeing is
offering end-to-end integration with
commonality across EFB classes. Many
Class 2 providers offer no integration,
leaving it to be done by the airline. This
can add unanticipated cost, and increase
technical and schedule risk, but the Boe-
ing EFB solution is fully integrated, with
Boeing support throughout the lifecycle
of the product.
service providers. Fiji-based Air Pacific folio to include a variety of additional Where the original EFB was an elec-
became the first 737NG operator to sign services. The maintenance performance tronic repository of the information
up the programme in April 2007. toolbox, for example, consists of a suite normally carried in paper form, its func-
Beyond material management and of web-based tools available through tionality has been expanded to include
component exchange, Boeing has also MyBoeingFleet that help manage tech- an electronic logbook (ELB) applica-
embarked on many MRO joint ventures. nical documentation and records. The tion. The ELB is rapidly replacing paper
Boeing Shanghai Aviation Services, in first six modules cover authoring, library, logs and in the process is also enhancing
which the airframer has a 60% stake, is structures, systems, tasks and training. operators’ ability to plan unscheduled
one such venture that has been awarded The first three of those provide access maintenance ahead an aircraft’s arrival,
FAA repair station certification. to updated maintenance data such as co-ordinate logbook data with aircraft-
Having introduced digital manuals manuals and catalogues, give users the generated maintenance messages, and
and other maintenance aids with the ability to customise the information extend AHM capabilities beyond the
737NG series, Boeing has broadened and support the development, approval ACMS function to encompass other
the scope of its electronic-enabled port- and management of task cards. Airlines types of faults.

www.airlineeconomics.co Airline Economics: MRO Global 2011 97

MIDDLE EAST MRO

MIDDLE EAST MRO

A
strategic axis shift in exponential traffic growth that is forecast. o0LGGOH(DVWFDUULHUV
trade routes has fuelled The development of the Middle East
the growth of air trans- region as an aviation hub has lead to a
SDUWLFXODUO\WKHELJWKUHHKDYH
portation in the Middle major shift in the global air transport mar- DOWHUHGWKHZD\WUDIILFIORZV
East, particularly the ket as the Middle East carriers, particularly
Gulf countries. The aggressive emergence the Big Three, have altered the way traffic
KDYHEHHQURXWHGp
of the Middle East Airlines on the global flows have been routed. A paradigm shift
aviation industry has been a notable has materialized that has transplanted as a result of exercising their sixth freedom
development for many established play- European and Asian hubs to Gulf-based traffic rights using their hub and spoke
ers. Emirates, Qatar Airways and Etihad hubs such as Dubai, Doha and Abu Dhabi. network. Approximately 4.5 billion people
Airways – the Big Three Gulf carriers – are These carriers are largely responsible for reside within an eight-hour flight of the
changing the dynamics of international avi- this growth and have capitalized on their Middle East, providing a huge potential to
ation and have quickly emerged as the new geographical centricity by cannibalizing connect that population to any city though
global challengers. The region’s airports are the traditional traffic flows between other a single stop.
being developed in tandem to handle the hubs and by connecting secondary cities The Arab Air Carriers Organization

98 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MIDDLE EAST MRO

MIDDLE LATIN EAST NORTH

APAC CHINA INDIA
EAST AMERICA EUROPE AMERICA
Market ($B) $6.6 $2.4 $0.6 $2.4 $1.9 $1.8 $13.9

Market Share
(2010)
16% 6% 1% 6% 5% 4% 33%

CAGR Global CAGR

5.3% 9.6% 9.4% 5.3% 6.6% 9.8% 1.6%
(2010-20) 4.4%

$16.0

$14.0
Commercial Jet Aircraft Retired

$12.0

$10.0

$8.0

$6.0

$4.0

$2.0

$0.0
AP CH IN ME LA&C EE NA WE AF

2010 2011

0,''/(($67,6$62/,'*52:7+5(*,21$1',66855281'('%<620(2)7+(67521*(67*52:7+5(*,216

lists 25 airlines at its members covering the ity on order that poses the major threat to strong hub and spoke network model in
entire Arab World. Yet it is the rise of Emir- established European and Asian airlines. a region with a geocentric potential of 4.5
ates, Etihad Airways and Qatar Airways as The Big Three airlines have specific billion people in an 8-hour flight radius.
the fastest growing full service airlines that long-term strategies guiding their success- Emirates started the unique insight that it
is the most spectacular. ful business models. They essentially are was theoretically possible to connect any
Emirates is the dominant carrier with network carriers that use a hub and spoke two significant cities on the planet with
Qatar Airways and Etihad Airways com- mechanism to collect short haul traffic into only one stop in Dubai. Emirates’ strategy
bined being 70% of its size. Together these long haul operations through their respec- is to provide connecting long-haul services
airlines currently operate a fleet of 303 air- tive mega hubs. They offer one of the best via its hub in Dubai, connecting city pairs
craft (EK-155, QR-91, EY-57) and have a in-flight products as full service airlines to worldwide with only one stop in Dubai.
further order book of 470 aircraft (EK-190, attract the high-yield customers. They have Both Qatar Airways and Etihad Airways
QR-182, EY-98). These airlines are forecast continuously stimulated demand through also follow this model.
to increase their capacity by more than 15% continuous brand awareness campaigns. The competitive cost structure at these
per year over the next five years. The Big And they have a much lower cost struc- airlines also helps. Fuel and labour cost are
Three have 57% more long-haul seat capac- ture due to labour policies different than the two most significant operating costs
ity on order than the 35 member carriers the West and an abundance of labour from for any airline, but the Gulf carriers enjoy
of the Association of European Airlines South Asia and Arab countries outside the advantageous positions in both. Fuel is
(AEA) and 27% more than the 17 member Gulf. cheaper in the region due to its proximity to
airlines of the Association of Asia Pacific The most significant strategy of these oil production and refining facilities, which
Airlines (AAPA). It is this increased capac- carriers has been capitalizing on their reduces their supply chain costs compared

www.airlineeconomics.co Airline Economics: MRO Global 2011 99

MIDDLE EAST MRO

to European, American or Asian airlines.

Their young fleet age also helps keep their ME
fuel costs as the latest generation aircraft 12%
ME
burn fuel much more efficiently. Low labour 12% AF
costs exist, as workers are sourced from the AF 10%
cheap labour markets of India, Pakistan, Sri 13%
Lanka, Bangladesh and Nepal. The man-
EE 5.4% EE
agement friendly labour laws, with trade Asia 14%
12% CAGR
unions and strikes being banned, has also 63%
Asia
helped keep the costs of skilled labour low. 64%
This has been a huge advantage in running
a labour-intensive operation such as the
massive transit hubs at Dubai.
Each airline has succeeded in elevating 2010 2011
6,913 8,995
their brand to an international level to stim-
ulate customer demand in line with their
global aspirations. Emirates, Etihad and /21*7(50)/((7*52:7+/22.662/,'(63(&,$//<)257$5*(75(*,216
Qatar Airways are all devoting a huge bud-
get to their brand awareness campaigns in
a bid to position themselves as full-service global trade markets before the oil ran dry. rise of low-cost carriers that are capturing
carries and generate sales throughout the This is the reason why it currently enjoys a the boom in point-to-point budget travel
world. Global advertising and sport spon- lead over Doha and Abu Dhabi as an avia- with the region. The success of Air Arabia,
sorships are being used extensively by these tion hub. Fly Dubai, RAK Airways in UAE, Jazeera
carriers to carry their marketing message. Another development has been the Airways in Kuwait, Bahrain Air in Bahrain
Emirates has in particular been very prolific
in the range of world sports that is sponsors
as a brand. In fact it would not be far from 2,500
the truth to say that it would like to become
the Coca Cola of the airline world.
It is not surprising that each of these air-
lines is part of a broader city master plan for Asia
growth in the world and reflects the New 2,000
New World order as well as the New Mari-
time Silk road. The airports in the cities of
Dubai, Doha and Abu Dhabi are playing
a significant role as prominent stops in
international trade routes. And they are 1,500 Asia
stimulating this through the growth of their
Billions

airlines and respective hub airports.

The Arabian Gulf had the luxury of being
able to start with a blank piece of paper to Asia
create the airline and the airport infra- 1,000
structure model. They formulated a plan to
prepare for the post-oil era by diversifying
their industrial base, and aviation was an
important sector. The development of the ME
mega-hub airport is influencing the growth 500 ME
of cities through industrial development,
relocation of corporate headquarters, light ME
EE
manufacturing, international conferences, AF EE AF
trade shows, sporting events, increased AF EE
tourism and the growth of a logistics and
distribution hub. By integrating these 2010 2015 2020
cities into global trade markets, their gov-
ernments have positively impacted their $60*52:7+
economic prosperity. Dubai certainly was q )/((7*52:7+)25(&$67$7&$*572,1<($56 2)*/2%$/)/((7
the pioneer of this model as its oil supplies q 0()/((7,6&203$5$%/(,16,=(72$)$1'((%87,6(;3(&7('72+$9(025(75$)),&
q $60*52:7+:,//,1&5($6($7&$*529(56$0(3(5,2'
dwindled and it raced to integrate itself into

100 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MIDDLE EAST MRO

and NAS Air in Saudi Arabia, have clearly MRO. During MRO Middle East exhibition and Overhaul Centre that is supported by
show that the market for air travel has in 2011 the company presented research Sikorsky. The focus on companies in the
grown to unprecedented levels. The low that showed profits have been pretty elusive region continues to be fleet performance of
fares have stimulated many people to for aftermarket companies in the region so aircraft in operation. However, the Middle
fly that previously would not have flown far but a lot of positive developments have East can play a vital role as a hub for aircraft
at all or as frequently. The rise of these taken place in preparation for the coming maintenance for the region covering Africa,
carriers has further given the region a growth in maintenance work. In the next Middle East and Australasia. As the fastest
stamp of approval as one of the leading air ten years, the total aftermarket spend base growing aviation region, this presents an
transportation markets in the world today. in the Middle East, including air transport, enormous economic potential.
Airlines in the Middle East have huge military, business aviation and civil helicop-  As the central location, Middle East
fleets and have a surge of new aircraft ter, is expected to grow substantially. The is ideally situated to capitalize on the
deliveries coming in. This is keeping them total will grow from $7 billion in 2010 to area growth
focused on their main business of air trans- $11.2 billion in 2019 showing a 5.3% annual  37% of the global MRO market sur-
portation. And they are using cost saving increase, according to figures presented by rounds the ME
measures in other areas such as engineer- Aerostrategy. MROs and airline mainte-  $15.4B in 2010
ing to outsource work to external parties. nance companies are therefore expanding  Regional CAGR is a very healthy 6.7%
Thus they are outsourcing contacts of in preparation for such a high growth rate. (2010-2020)
maintenance work to established MROs Currently Mubadala Aerospace in Abu  Market is equivalent to that of Ameri-
which creates more work potential in the Dhabi is working in partnership, through cas, but in 10 years time will exceed the
Middle East region. its subsidiary Abu Dhabi Aircraft Tech- share of the Americas by 14%
The new trend is for these MROs to nologies, with GE and the Engine Alliance The effect of the European Emissions
provide a package of customized services on engine maintenance, and SR Technics Trading Scheme on Middle East MRO
for airlines that addresses all their line and bringing the first network overhaul pro- companies should not be overlooked, it is
base maintenance needs in order to win vider approved by OEMs to the region. sure to give them an additional boost and
their business. Mubadala Aerospace is also creating a further enhance their cost savings to cus-
TeamSAI is an aviation consulting firm military MRO in Al Ain called Ammroc tomers over European Union based MRO
providing strategic and tactical solution in Advanced Military Maintenance Repair suppliers.

Western Europe
Eastern Europe

North America

Middle
ddle Ea
East
st

Asia Pacific

South America

Africa

www.airlineeconomics.co Airline Economics: MRO Global 2011 101

MIDDLE EAST MRO

The ones to watch are coming to the fore but what of Qatar?
Abu Dhabi Aircraft Technologies vices remains impressive: Services include: structure in the region, are reporting heavy
Abu Dhabi Aircraft Technologies (ADAT) Heavy maintenance services, Total mainte- utilisation, something that is a surprise
services the Etihad fleet, which, given the nance services on “Flight Hour Rate” basis, given the age of the Emirates fleet. This
age of the same leaves quite a bit of capacity On-site maintenance services, Cargo con- does mean that Emirates is in no position
for third party work. ADAT is owned by the versions - B737, B747 and B767 Aircraft, to move into third-party services in earnest
Mubadala Development Company, which Customized interiors, Avionics modern- as there remains only very limited spare
is a strategic investment vehicle wholly ization and numerous military upgrade capacity with no new capacity coming into
owned by the emirate of Abu Dhabi which programs, Life extension and aging air- play in the near term and its own airline still
also owns SR Technics. ADAT is in a position craft AD note compliance, Cabin/cockpit growing at a very fast pace. Emirates is cur-
to challenge the very best in the market as it standardization/modernization programs, rently in the process of developing in-house
now has base maintenance capabilities for Communications and navigation systems practices and skills to move forward with
all major current and future aircraft mod- modernization programs, Re-engining third party maintenance as a core business.
els and has just built its A380 hanger which and/or hush kit installation. Bedek is able to
will receive its first A380 aircraft in 2012. offer services for: B707, B727, B737, B747, Gulf Technics
A recent deal with General Electric means B757, B767,DC-10, MD-80, MD-11, A320 This MRO was formed through a joint-
that the MRO is now a specialist centre for and A340 Series among others. venture between Bahrain state holding
GE90 AND GEnx engines. ADAT caused company Mumtalakat and Singapore’s
a stir in 2010 when it launched Sanad, Emirates Engineering SIA Engineering (SIAEC). The new MRO
which provides it with a leasing and man- Emirates Engineering, which has a remit will not only service the Gulf Air fleet but
agement capability through the purchase to support the Emirates airline fleet, has will actively seek third-party work with a
of an airline’s component stock allowing confirmed that it has plans in place to seek new facility that will become operational
it to maintain the same on a contract basis third-party maintenance work in the future. in 2012. Gulf Technics (GT) is a subsid-
through ADAT and SR Technics. At the same time however its eight hangers, iary of Mumtalakat established to act as
which together form the largest free-span the Technical Investment and Innovation
IAI Bedek Aircraft Group
Thanks to its location, IAI Bedek Aircraft
Group sits alongside its Middle Eastern $35.0
peers. This MRO remains a very strong
conversion specialist but of late, in 2011 at
least, business has been quiet in the third-
$30.0
party maintenance sector. This MRO $29.6
continues to perform well but there have
been few new contracts of late to shout
about and one cannot help but see this $25.0
MRO becoming more and more isolated as
the Gulf region continues to grow rapidly. $20.8
Will the Chinese and Indian airlines look $20.0
Billions

to Israel for their MRO needs? JorAMCo is

proof that the business is there to be won.
$15.4
IAI Bedek Aircraft Group is certainly one $15.0
to watch through 2012 and as a specialist
converter the outlook in this market is far
from bleak. It will be interesting to see if this $10.0
MRO is able to make some gains in third-
party maintenance and if it will be able to
keep up the pace in the conversion market $5.0
with so many airlines opting for new air-
craft.
Moreover the European ETS will lead
to many more airlines/operators being 2010 2015 2020
forced to opt for new cargo aircraft rather
than conversions, this will hit Bedek. That Asia ME AF EE
said this MRO remains a prolific military
service provider and it will not be short of
0,''/(($670525(/$7,9(726855281',1*5(*,216
business on that front. The roll list of ser-

102 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 MIDDLE EAST MRO

arm of Mumtalakat. GT’s role is to identify to perform D-Checks on six B737NGs oper-
and establish viable industrial and techni- ated by the Indian Carrier; the confirmed Airline Financial Results
cal investments and to establish technical checks include landing gear and thrust
research capabilities. reverser removal and installation and paint.
Intensifies the COST Focus
Currently the company can perform: The agreement is another building block ‡ Profits have been elusive in many regions,
Import, export and logistics of aviation for a more tangible business for JorAMCo and the Middle East has had its troubles too
parts, aviation components repair and in the Indian Market and a continuation – Surrounding regions like Asia have been
overhaul, aviation Maintenance, Repair of JorAMCo’s strategy in that region as most profitable though
and Overhaul (MRO). JorAMCo continues to establish presence ‡ The quest for profitability drives business
GT also has a research and development there, with a noticeable increase in Indian behavior
centre. Planned for 2012 are: Line Mainte- operators frequenting JorAMCo’s facili- – Revenue focused innovation is evident
nance, modular engine repair and overhaul, ties with their maintenance requirements. – Cost improvements are needed at every
aviation components manufacturing, auto- JorAMCo has successfully positioned itself turn
motive components manufacturing. as a serious alternative option for Indian ‡ For MRO value stream, this means
GT is actively establishing research operators. – Motivation toward best value
capabilities, both numerical and experi- – Outsourcing will continue to grow
mental, in various fields including MRO, Qatar Airways – Supply chain innovation will be imperative
NDT, reliability, aluminum and steel met- Qatar is the big question out there at the – Preparing for a new generation of technol-
allurgy, energy, aerodynamics, combustion, moment - Will the airline move to create ogy
and heat transfer. an MRO arm in the near future? Qatar’s – Consolidation will be important to value
fleet is growing at a staggering rate and creation
JorAMCo more aircraft orders are being announced – Value-oriented innovation will be rewarded
JorAMCo a Jordanian based Maintenance, at the 2011 Dubai Air Show. The airline, by
Repair and Overhaul (MRO) facility is a the time of the FIFA World Cup in Qatar in
dynamic aircraft maintenance center that 2022, will have a huge fleet with a massive is the best option to take. If there is spare
specializes in aircraft airframe services, network and will need maintenance facili- capacity for third party maintenance then
component repair and overhaul covering ties to match. The investment going into so be it.
Airbus, Embraer and Boeing products. the new Doha International Airport, open- The current crop of global MRO provid-
JorAMCo is an EASA- and FAA-approved ing in 2012, gives Qatar Airways the option ers needs to have presence in the Middle
MRO supplier and performs all levels of to start bringing fleet maintenance services East if they are to be at the forefront of the
aircraft maintenance for a number of air- in-house. Any other airline in the US or the market in fifteen- to twenty-years time. The
lines in the Middle East, Europe and Asia. EU would be mad to bring maintenance in- problem for many MRO companies is that
2011 has been a success story for JorAMCo house as high labour costs means it would financing is very hard to come by. Some pro-
and has seen it collect new business from not be economically viable, but, as with so viders will no doubt be looking to launch a
emerging markets. A highlight of 2011 many things in the Middle East, state own- joint venture with Qatar in the near future.
came in September when Jet Airways ership and relatively cheap labour costs This would be both a bold and rewarding
signed an agreement whereby JorAMCo is mean that bringing maintenance in house option.

16-Dec-10
ADAT unveils timetable
22-Jan-10 for GE and Engine
SIA Engineering and Gulf 15-Jul-10 20-Aug-10
21-Jan-10 Alliance Network Partner 27-Jan-11
Technics to set up and Turkish Technic and NAS Tech and Lufthansa
Mubadala and Goodrich Shop for the GEnx and ADAT signs deal to
operate MRO facility in Goodrich complete Technik sign strategic
sign JV agreement. GP7200 Engines. overhaul IAE jet engines.
Bahrain. agreement for MRO JV. cooperation agreement.

1-Feb-10 1-Mar-10 1-Apr-10 1-May-10 1-Jun-10 1-Jul-10 1-Aug-10 1-Sep-10 1-Oct-10 1-Nov-10 1-Dec-10 1-Jan-11

Mubadala Aerospace launches Mubadala and Honeywell form Pratt & Whitney and Turkish Turkish Technic, Turkish Airlines,
component and engine financing strategic partnership. Technic strengthen partnership and TAI launch cabin interiors
company, Sanad Aero Solutions. 20-Jul-10 with Advanced CFM56 and V2500 business.
3-Feb-11 Center of Excellence. 29-Dec-10
1-Nov-10

www.airlineeconomics.co Airline Economics: MRO Global 2011 103

MIDDLE EAST MRO

The Middle East may have a high por-

$110
tion of growth but it is no different to any
other region in that the most successful
$15.1
$100 MROs will be those able to offer a full array
$12.9 of services across all aircraft types offering
$90 total maintenance through a long term
$9.1 partnership. The advantage for MROs
$80
independent from OEMs as independent
third party or in house providers is data
$70
sharing. If you are able to service a mixed
$0.7 $0.4 fleet at any time in any zone with one ser-
$60
vice provider that is working with you and
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2011F
-$0.3 -$0.6 $50 will share data at all times over all types that
-$0.1 -$0.1
will also embrace the latest cost saving tech-
-$4.1
$40 nologies be they PMA, DER or whatever is
-$5.6
needed – then you have a flexible and cost
-$7.5 $30 efficient service that an operator will be at
pains to refuse. This is the blunt truth of
-$9.9 $20
-$11.3 the MRO sector moving into 2012. And
-$13.0
for many it is a truth that will require either
$10
expansion, acquisition or investment.
-$16.0
$0.0 There is no middle ground and although an
MRO may inform you that they are secure
in their sphere of influence, if they do not
*/2%$/$,5/,1(6960,''/(($67$,5/,1(6
meet the aforementioned criteria, then they
$118$/1(7352),7 %,//,21686' 96$9(5$*(:25/'&58'(2,/ 86'3(5%%/ are operating on borrowed time as globali-
sation of the aviation sector speeds.

104 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AFRICA

AFRICA MRO

A
frican maintenance, repair ing their fleets. African carriers account is not enough to make it competitive for
and operations is currently for approximately 100 aircraft in Boe- the firm to do the work alone. Yet African
estimated to be worth some ing’s backlog for delivery over the next MROs remain well positioned to provide
$1.2 billion per annum but ten years with a mix of 737s, 777s and MRO services to African airlines, and at
this is forecast to grow by 787s on order. reasonable prices.
over 40% to $1.9 billion by the end of the African MROs are no different from As new technologies are introduced,
decade. Ethiopian MRO expenditure in any other. If African MRO is to grow so African MROs need to source capital
Africa is expected to increase but forecasts beyond servicing the local airlines of the to invest in the new tooling, equipment,
differ due to the continent developing continent then they must position them- systems and training required to under-
a north-south split with the Ethiopian selves to attract business from Europe take MRO on new generation aircraft
Airlines maintenance arm with Egyptair and the Middle East in the north and, in and engines. African airlines therefore
Maintenance & Engineering looking to the case of SAA Technical in the south, need to collaborate to grow. They need
dominate the north, while South African it must expand to have teams across the to outsource work within Africa when-
Airways Technical (SAA Technical) con- local regions. The African MROs will ever possible, throughput needs to be
tinues to dominate the south. Ethiopian need to prove a record for safety, turn- increased by pooling resources and
and Egyptair are in the better position around reliability, competitive pricing creating centres of excellence through
due to geography – being on the periph- and be full service providers. African the sharing of expertise and mutual
ery of Europe and the Middle East gives MROs must know their strengths and assistance. African MRO’s best bet is to
an obvious edge. weaknesses as well as look at outsourc- partner with OEM (Original Equipment
Boeing projects that Africa will need ing areas of low competitiveness, such as Manufacturer) programs to increase
710 new airplanes between 2009 and large engine overhauls and low-volume expertise, improve systems, develop
2029 with African airlines not just components. SAA Technical outsources worldwide marketing coverage and gen-
replacing old aircraft, but actively grow- large engine overhauls as its throughput erate reciprocal business.

www.airlineeconomics.co Airline Economics: MRO Global 2011 105

AFRICA

Egyptair Maintenance & Engineering

Egyptair Maintenance & Engineering Hangar 8000 is fully equipped with tive downtimes and guaranteed on-time
(M&E) is a leading provider of aircraft docking system to accommodate A320, redelivery.
maintenance services in the Middle East A321, A330, A340 A300-600, A300-B4,  :bk\kZ_m Zk^ k^]^ebo^k^] pbma s^kh
region with over 75 years’ experience. B777 and EMBRAER 170. It obtained check-related discrepancies.
Egyptair M&E has a base maintenance the EASA approval Part 145 through the  >qm^glbo^ ^g`bg^^kbg` \ZiZ[bebmb^l
facility at Cairo International Airport. certifying staff and hangar’s facilities make Egyptair M&E a specialist in
This base maintenance has been designed to perform scheduled checks on A319, customised maintenance and modi-
to act for a variety of different aircraft A321. A320, A330 and A340. fication programmes. Examples
types, components and associated equip- Hangar 7000 is used to include various successful cockpit,
ment. Our team of highly qualified and perform scheduled checks on B737- structure and cabin modifications.
motivated engineers is ready to provide ,))(-))(.))(/))(0))(1)) Zg] 2))  > `rimZbk F> h__^kl \^kmb_b^]
all the professional services you require, and the B777. solutions for many EASA and Fed-
included in European Aviation Safety Hangar 6000 is used to perform sched- eral Aviation Regulations-driven
Agency (EASA) 145 Scope of Approval. uled checks on the A300-600, A300-B4, mandatory modifications. Smartly
Egyptair M&E provides the following :,+*%:,+)Zg]ma^>F;K:>K*0)(*2)' combining regular maintenance
base maintenance services: checks with modifications makes
 A^ZorfZbgm^gZg\^ TAKING BETTER CARE OF YOUR it possible to minimise turnaround
 :`^bg`Zbk\kZ_mikh`kZff^ AIRFRAMES AND ENGINES times.
 Bgm^kbhkk^g^pZeZg]l^Zmk^\hgÕ`nkZ- Egyptair M&E has a well-established
tion operational background and extensive TOTAL AIRFRAME CARE
 <hkkhlbhgik^o^gmbhgZg]\hgmkheikh- knowledge of airframe and engine main- Total Airframe Care services includes
gramme tenance and airline operations. regular aircraft checks, monitoring and
 >g`bg^^kbg`lniihkm  <nlmhf^kl \Zg \hngm hg \hfi^mb- scheduling of ADs.

Ethiopian airlines maintenance

Established in 1945, Ethiopian Airlines  :
 kZg`^h_li^\bZeikh\^lllahil_hk  >
 g`bg^\hg]bmbhgfhgbmhkbg`
maintains modern and complete aircraft, parts, salvage work and modification  AZg]ebg`h_3m^\agb\Zek^\hk]ld^^i-
engine and component overhaul and ing, technical planning functions,
repair facilities. With an all-Ethiopian Component overhaul/testing reliability analysis
workforce of over 750 technical person-  <hfie^m^k^iZbk%ho^kaZneZg]m^lm- Facility evaluation, development plans
nel – most of whom are trained by the ing of components fitted on the above and recommendation
airline’s Aviation Maintenance Techni- mentioned fleets M^\agb\Ze ^oZenZmbhg(]ZfZ`^ Zll^ll-
cians School and are US Federal Aviation  Ma^Zobhgb\l\hfihg^gmlahinmbebl^l ment on aircraft at any location
Administration and Ethiopian Civil Avia- a state-of-the-art Automatic Test
tion Authority licensed – Ethiopian has Equipment, ATEC 5000, for Avionics Line station technical handling
gained a distinguished recognition for its components In addition to our base at ADD, the MRO
high standard and excellent safety record. Non-destructive testing (NDT) with spe- offers service at various international
cialised inspection: x-ray, radiography, stations such as NBO, FCO, BOM, CAI
APPROVED CAPABILITIES eddy current, ultrasonic, magnetic par- and LOS.
Airframe maintenance ticles and dye penetrant. Experienced mobile technical team
The base provides complete package and crew available for a short- and long-
maintenance on: Boeing Models B767, General engineering support term assignment upon request.
B757, B737, B727; Bombardier DHC-6; Development of
Fokker Model F-50.  FZchkk^iZbk(fh]bÕ\Zmbhg Spare parts inventory
 >g`bg^^kbg`hk]^kl  >q\aZg`^(e^g]bg`h_iZkml_hk;h^bg`%
Engines maintenance  FZbgm^gZg\^ikh`kZfl Fokker, ATR, De Havilland and Lock-
 <hfie^m^ k^iZbk% fh]bÕ\Zmbhg% Zg]  < hfie^m^ bgli^\mbhg(\a^\d phkd heed aircraft.
overhaul packages  LZe^h_lnkienlZbk\kZ_miZkml'
 Fh]neZkfZbgm^gZg\^ Operational assistance through  :nmhfZm^]lmhk^lZg]bgo^gmhkr\hg-
 >g`bg^i^k_hkfZg\^m^lmbg`  :bk\kZ_mi^k_hkfZg\^ZgZerlbl trol services

106 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AFRICA

Jetworx
Jetworx (see Jetworx.co.za) in South  * mbf^ Zbkebg^ Ç *+ Zbk\kZ_m Ç +%+)) shops such as wheels and brakes, com-
Africa provides a wide spectrum of air- monthly flight hours – 1,500 sectors posites, avionics, engine shop, structures
craft maintenance functions. Anything per month and painting makes it an ideal one-stop-
from minor maintenance, major main-  L Z_Zbk Hi^kZmbhgl Ç */ Zbk\kZ_m Ç shop for major maintenance and AOG
tenance, logistical support, engineering 1,000 monthly flight hours – 400 support. Boroscope and NDT services
and maintenance planning services are sectors per month are also provided.
provided. The company possesses the  :^k`h<ZibmZeÇfZchkfZbgm^gZg\^ The logistical and support centres
approvals of various African countries  :bkSZf[^sbÇ_neelniihkm provide various aerospace related ser-
but also holds FAA, EASA and SACAA  >Zlm^kgLdrc^mlÇ_neelniihkm vices with such approvals, engineering
approvals on various aircraft types such The facility is geared to do around 50 l^kob\^lZg]\hfihg^gm(^g`bg^k^ebZ[be-
as the B737, B727, MD80 and L382. major overhauls per annum. ity monitoring.
Jetworx support aircraft in various Maintenance services can be pro- Jetworx was born out of the merger of
theatres in Africa, the Middle East, vided for ad-hoc or AOG situations as Safair’s technical division and Aeronexus
Europe and even as far as Arctic areas. well as Comprehensive Maintenance Technical. Staffed with around 650 per-
It typically complies to a 98% dispatch Agreements, also referred to as Power sonnel from various disciplines it is well
reliability for its routine recurring cli- by the Hour agreements. poised to deliver a comprehensive and
ents. Major clients are listed as: Its comprehensive array of support customised solution for its customers.

SAA Technical
HEAVY MAINTENANCE Communication installation, Traffic as other centres.
SAA Technical has a reputation for high- Collision Avoidance System, enhanced Line maintenance includes A and B
quality work at very competitive labour IFE system installation, GPS (Global checks, technical defect rectification and
rates, earned over decades of providing Positioning System), HUD (Head Up aircraft exterior cleaning. SAA Techni-
heavy maintenance services to local and Display) installation and yaw damper cal is the only maintenance facility in the
international airlines. modification and cabin reconfiguration. world providing customers with the spe-
Aircraft downtime is reduced by SAA Technical has a dedicated paint cialist service of hand-polished aircraft.
world-class facilities and equipment hangar, equipped to do all levels of In addition to the normal mainte-
and through scheduling aircraft modi- painting including complete repaints as nance programme, a dedicated team
fications and repaints during C and D well as internal and external decals. SAA ensures that aircraft interiors are main-
checks. Technical is a one-stop shop for all heavy tained to a high standard. When all
SAA Technical has nearly 85,000 maintenance, including the capability to airlines have similar aircraft and techni-
square metres of hangar space. This test, repair and release components on cal facilities, the cabin appearance and
includes the 36,000 square metre major site. functionality is a key consideration in
maintenance hangar, the largest in customer satisfaction and loyalty.
Africa, capable of accommodating five Capabilities for C and D-checks SAA Technical is expanding its foot-
B747 aircraft simultaneously. A mul- include: print into Africa. It has locally trained
tipurpose dock is capable of handling  ;0-0L^kb^l technical staff placed in Lusaka, Lan-
:,-)&+))(,))(/)) Zbk\kZ_m% Zee ;0-0  ;0,0<eZllb\(G@ seria, Mauritius, Dakar, Luanda and
aircraft and MD11 aircraft.  F=** Kigali. This not only assists SAA, but it
SAA Technical does all major main-  :,*2L^kb^l facilitates the development of aviation
tenance for SAA. It also provides major  :,+)L^kb^l services, especially technical mainte-
maintenance to a number of European,  :,-)L^kb^l nance, on the African continent
African and Middle East airlines. SAA Technical provides an aircraft
The high capability in modifications LINE MAINTENANCE recovery service through a specialist
includes strut modifications, FQIS (Fuel SAA Technical has more than 700 tech- team on a 24-hour standby basis. This
Quantity Indication System) replace- nical staff providing line maintenance team is fully equipped to handle any type
ment, ACARS-ARINC (Communication services to South African Airways and a of emergency in Africa and the Indian
and Reporting System) installation, large number of international airlines. Ocean Islands and these services are
EGPWS (Enhanced Ground Proximity These services are provided at Johan- jointly conducted with the International
Warning System) installation, Satellite nesburg, Cape Town and Durban as well Airlines Technical Pool.

www.airlineeconomics.co Airline Economics: MRO Global 2011 107

AFRICA

MRO Directory: Africa/Middle East

HEAVY MAINTENANCE DIRECTORY - AFRICA/MIDDLE EAST
COMPANY CONTACT DETAILS AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

Abu Dhabi Aircraft Kirubel Tegene A300 (all) Heavy 12,268m2 area avionics upgrades, composite
Technologies Manager, Commercial Sales A310 Heavy 3 w/b bays repairs, interiors Upgrade, full strip &
Abu Dhabi International Airport A320/321 Heavy 1 w/b paint: repaint, ageing a/c progs, materials
PO Box 46450 A330/340 Heavy hangar 2 (4,100m2) process, component o/haul engine
Abu Dhabi 747-100/-200 A, B hangar 3 (2,700m2) test cell engine overhaul, aircraft
United Arab Emirates 747-300/-400 A hangar 4 (10,000m2) cleaning, aircraft weighing Cockpit
el: +971 2 505 7530 757-200/-300 Heavy 11,000m2 workshops layouts, Corrosion prevention/
fax: +971 2 575 7263 L-1011 Heavy 100,000lb control, Engineering svcs Fuel tank
e-mail: [email protected] B767 Heavy 1 APU report, Inventory mgmnt Line
B737 (NG) Heavy maintenance, Logistics support
Machining/plating, NDT. Sheetmetal
Training VIP refitting/refurbishment
Air Zimbabwe G Gambiza 707 A,B,C,D 1 w/b hangar strip & paint, NDT
Technical mktg manager 737 A,B,C,D 1 n/b hangar
PO Box AP.1 767 A,B,C 20,000m2
Harare Airport BAe 146 A,B, structural 250 engineers
Harare
Zimbabwe
tel: +263 (4) 575 111 ext. 2478
fax: +263 (4) 575 058
Air Madagascar Claude Rakotoarivelo 737 A,B,C,D 1 hangar modifications
VP Maintenance and Engineering 767-300 A 2 w/b; 1 n/b
31 Ave de l’ Independence ATR42 A,B,C,D
Antananarivo 101 DHC6-300 A,B,C,D
BP437
Madagascar
tel: 261 20 22 446 85
fax:261 20 22 446 74
[email protected]
Alsalam Aircraft Fawaz Sharabi A300 A,B,C,D 3 w/b hangars Composite repairs, Avionics
Manager - business development - 707 A,B,C,D (each B747-400 size) upgrades, CPCP, Ageing a/c inspect.,
Commercial 727 A,B,C,D Total hangar space- IFES retrofit, Full cabin refurb., VIP
PO Box 8012 737 A,B,C,D 15, 900 m2 interior design, 747 pylon mods, 747
Riyadh 11482 747 A,B,C,D section 41, Strip and paint
Kingdom of Saudi Arabia L-1011 A,B,C,D
tel: +966 1 220 3966 extn 324 MD-90 modifications
fax: +966 1 220 0199
mob: +966 553031611
[email protected]
www.alsalamaircraft.com.sa
Arkia Israeli Airlines Nir Dagan ATR 42/72 A,B,C,D 1 w/d refurbishment
Aircraft Maintenance VP, operations & maintenance B-200 6 n/b
Dov Airport Citation XL A,B,C,D 3,000m2
PO Box 39301 DHC 7
Tel Aviv 61392 BD-700 (Global 5000)
Israel
tel: +972 3 690 2222
fax: +972 3 699 1390
email: [email protected]
Bedek Aviation Group Joseph Oren 707, 727, 737 A,B,C,D 4 w/b hangars (5 aircraft) strip avionics upgrade, 747 pylon mods,
Israel Aircraft Industries (IAI) General Manager, Mkt. & Busin.Dev. 747, 757, 767 A,B,C,D & paint 747 section 41, composite repairs,
Ben Gurion International Airport MD-11 A,B,C 4 n/b hangars (10 aircraft) full cabin refurb., ageing a/c mods,
Israel 70100 MD-80 A,B,C,D cargo conv. inc. B747 components incl: hydraulics, landing
tel: +972 3 935 3979 DC-8, DC-9, DC-10 A,B,C,D 135,000m2 gears, wheels & brakes CSD, IDG,
fax: +972 3 935 4262 A320/321/319 A,B,C,DN transmissions
e-mail: [email protected]
Denel Aviation Martin Laubscher C-130/L100 A,B,C,D 6 hangar bays Mods & upgrades, Strip & painting,
Business Development NDT, Component overhaul & repairs,
PO Box 11 CPCP
Kempton Park
1620
tel: +27 11 927 4575
fax: +27 11 927 4411
EgyptAir Hassan Sakr A300B4 A,B,C,D 4 w/b bays modifications, strip and paint,
Marketing and sales director A300-600 A,B,C,D 3 n/b bays structural and comp. repairs, engine
Cairo International Airport A320/321 A,B,C,D 20,000m2 hangar space test cell, components shop, avionics
Cairo A330-431 A,B,C 350 airframe engineers shop, powerplant shop
Egypt A340-200 A,B,C
tel: +20 2 696 4842 777-200 A,B,C
fax: +20 2 696 4896 707-300 A,B,C,D
[email protected] 737-500 A,B,C,D
747-300 A,B,C,D
ELAL TECH/EL AL Ran Ackerman 747-200/400 A,B,C,D Engine Shop logistics support, engineer supp.
Israel Airlines Senior Marketing and Sales Mgr 767 A,B,C,D Hyd. Shop Mods, avionics, engine, build up,
PO Box 41 757 A,B,C,D Avionics Shop composites, & hydraulics wkshops,
Ben Gurion Airport, 70100 737NG A,B,C,D Structure Shop line maintenance, and tailor made
Israel 777 A,B,C,D Components Shop solns, FAR 145, EASA 145, CAAI,
tel: +972 3 971 7278/7748 3 Bay, 20,000 m2 ISO9001:2000
fax:+972 3 971 7849
e-mail: [email protected]
www.elaltech.com

108 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 AFRICA

HEAVY MAINTENANCE DIRECTORY - AFRICA/MIDDLE EAST

COMPANY CONTACT DETAILS AIRCRAFT CHECKS FACILITIES SPEC. CAPABILITIES

Ethiopian Airlines Zemene Nega 707 A,B,C,D 2 bay w/b strip & paint, avionics upgrades,
Director technical sales & mktg 727 A,B,C,D 2 bay t/prop hangar composite repair, CPCP/ ageing a/c
PO Box 1755 737 A,B,C,D 750 licensed engineers mods, engine overhaul, full cabin
Addis Ababa 757 A,B,C,D refurbs., component o/haul
Ethiopia 767 A,B,C,D
tel: +251 1 615 272 DHC-6 A,B,C,D
fax: +251 1 611738/474 ATR 42 A,B,C,D
[email protected] C-130 A,B,C,D
F50 A,B,C,D
Iran Aseman Airlines Mazia Darafsh 727 A,B,C 5 hangars for w/b aircraft strip & paint, avionics upgrades,
Mgr, production planning & control F28 A,B,C,D 20 bays structural repair
Mehrabad Airport F27 A,B,C,D 80 licensed engineers
Tehran ATR 42 A,B,C
IR Iran ATR 72 A,B,C
tel: +98 21 603 5310-14 ext 6330 Falcon 20 major
fax: +98 21 600 1810 Do228 major
mobile: +98 911 258 0597
Jordan Aircraft Faris Haddadeen A310 all lvls to 10Y 3 L-1011s sim. SBs, ADs, modifications, full strip
Maintenance Co Director, Marketing & Sales A320,A321,A319 all lvls to 10Y 12,162m2 of hangars & paint
(JorAMCo) Engineering & Maintenance Division A340 all lvls to 10Y 10,440m2 of eng. bldgs
PO Box 39328 707 A,B,C,D 1,600m2 of support shops
Queen Alia International Airport 727 A,B,C,D 800m2 of paint shops
Amman 11104 L-1011 A,B,C,D 146 A & P lic. airframe & Engine
Jordan Engineers
Tel : + 962-6-445 1272
Fax : + 962-6-445 2996
Mobile : + 962-777-828811
[email protected]
Kuwait Airways Ahmad Abdulla Al Zabin A300 A,B,C,D 2 w/b; 2 n/b strip & paint Dy modifications
dir. engineering affairs A310 A,B,C,D 13,246m2
PO Box 394 A320 A,B,C,D
Safat 13004 A340 A,B,C,D
Kuwait 727 A,B,C,D
tel: +965 431 747 A,B,C,D
fax: +965 474 7105 767 A,B,C,D
Oman Aviation Services Khalid Bin Al Abdesalaam A310-300 A 2 bays strip & paint, modifications,
VP Maintenance F27 A,B,C 1,020m2 floor space paintshop
Seeb International Airport ATR 42-500 A,C
PO Box 58 DHC-6 A,B,C,D
Seeb-Muscat
Oman
tel: +968 519 294
fax: +968 510 018
Royal Air Maroc Fouad Benbrahim 727 B,C,D 1 n/b hangar (4 aircraft) strip & paint, avionics upgrades,
Technical sales & contracts mgr 737-200 B,C,D 38,000m2 (hngr + b/shops) full cabin refurbs., eng. modular
Centre Industriel Aéronautique 737-300/400/500 B,C,D 1,000 licensed engineers maint., approvals: JAR145, FAR145,
Aéroport Mohammed V 737-700/800 B,C engine test cell Bureau Veritas, Moroccan DAC
Nouasser 757 B,C,D training centre
Casablanca ATR 42 B,C,D
Morocco
tel: +212 2 49 9007
fax: +212 2 53 9425
[email protected]
South African Jorge Duarte 737 A,B,C,D 8 w/b strip & paint, 747 pylon mods, com-
Airways Technical Executive mgr, tech sales & support 747 A,B,C,D 6 n/b posite repairs, CPCP, interiors, MRO
Room 309, Hangar 8 A319 A,B,C,D of Components, Cabin refurbish,
Private Bag X12 A320 A,B,C,D Avionic Upgrades – FDMP, FMS, etc,
Johannesburg International Airport A340 A,B,C,D 747 Section 41
1627
South Africa
tel: +27 11 978 9993
fax: +27 11 978 9994

www.airlineeconomics.co Airline Economics: MRO Global 2011 109

A340 MAINTENANCE

All downhill from here?

A great aircraft, but the A340 simply could not gain pace against
the Boeing 777. Airline Economics examines the history of the A340, its
investment curve, maintenance options and future parts potential.

he A340 is now perceived

T
A340S IN SCHEDULED SERVICE AS OF SEPT 1, 2011
Aircraft type Engine type Number by many as a good aircraft
that was simply offered at
Airbus A340-210 CFMI CFM56-5C3/F 13
the wrong time. The intro-
Airbus A340-210 CFMI CFM56-5C2 5 duction of the Boeing 777
Airbus A340-310 CFMI CFM56-5C3G 5 shortly after the launch of
Airbus A340-310 CFMI CFM56-5C4/P 19 the A340 effectively removed the need
for four engines and changed forever
Airbus A340-310 CFMI CFM56-5C4 150
the yield prospects of a 295-plus seat,
Airbus A340-310 CFMI CFM56-5C3/F 12 long-range, passenger aircraft in a world
Airbus A340-310 CFMI CFM56-5C2 20 of high fuel costs. If the A340 had been
Airbus A340-310 CFMI CFM56-5C2F 5 launched 10 years earlier, sales figures
Airbus A340-540 RR Trent-553-61 10
might have been very different.
Although two engines are better than
Airbus A340-540 RR Trent-553A2-61 14
four where fuel burn is concerned, the
Airbus A340-540 RR Trent-556-61 1 one area where four engines is a benefit
Airbus A340-640 RR Trent-556-61 38 is compliance with the Extended-range
Airbus A340-640 RR Trent-556A2-61 41 Twin-engine Operational Performance
Standards (ETOPS). ETOPS is an Inter-
Total: 333
national Civil Aviation Organization

110 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 A340 MAINTENANCE

o7UXHWR$LUEXVnVZHOOWKRXJKW 300
RXWIDPLO\FRQFHSWWKH$ A340-200
A340-300
777-200ER
777-200LR
250
RIIHUVDQH[FHSWLRQDOGHJUHHRI A340-500 777-300

Value in US$million
A340-600 777-300ER
RSHUDWLRQDOFRPPRQDOLW\ZLWK 200 777-200

DOORIWKHFRPSDQ\nV 150
IO\E\ZLUHDLUFUDIWp
100
(ICAO) Standard and Recommended
Practice (SARP) permitting twin-engined 50
commercial air transporters to fly routes
that, at some points, are farther than 60 0
minutes’ flying time from an emergency
List 2007 2008 2009 2010 2011
or diversion airport. The A340-600’s
four engines allow for operations under
ETOPS that mean airlines can fly more
direct routes over the poles, mountain
)$0,/<5(6,'8$/9$/8(69(56(67+($)$0,/<
ranges or long distances over water, or
on segments far from airports, saving Aircraft List 2007 2008 2009 2010 2011
travel time and cutting fuel consumption A340-200 127.5 41.65 40.25 30.5 24 18
– a significant benefit for many operators A340-300 228 98 99.35 94.25 82.25 59.75
over many routes. A340-500 261.8 112 113.25 103 101 78.45
Twenty-one years after the first flight A340-600 275.4 126.8 129.8 117 103 90.4
of the A340, this family of aircraft is not 777-200 186.5 75.2 68.35 56.25 46.75 37.05
expected to receive any further orders. 777-200ER 232.3 120.25 123.5 116.8 115.15 117.75
The type has just four further A340-500s 777-200LR 262.4 136.65 139.9 134.3 136 135
to be delivered. After this, production is 777-300 222 111.4 95.3 80.5 74.75 64
expected to cease, and production of the 777-300ER 284.1 143.3 149.8 137 136.2 147
A330 line will increase until the first deliv-
eries of the A350. dual-aisle aircraft, enabling a more var- gained by their older siblings and the
For years, Airbus’s widebody produc- ied flying experience and more flight large contribution that has been made to
tion was all about the A330/A340 line. hours for the same duty time. This is an their evolved maintenance programmes
But with the backlog of A340s down to attraction not to be underestimated in and longer check intervals.
four units, now it is all about the A330. a market where carriers are vying on a Because the A340 family did not
The final nail in the coffin for the A340 global basis for quality pilots that are in receive the orders the manufacturer
was the rise in fuel prices starting in the very short supply. expected at the outset, the aircraft ended
latter half of the past decade, which led Some operators have complained in up being grouped, through large orders
to Emirates cancelling its $4 billion order recent years that the A340-600 aircraft and subsequent follow-up orders of
for the type in 2006. cannot cope with the added weight of variants, with a select band of initial oper-
But the A340 still offers benefits to many modern first and business class ators of the early types. Operators that
operators of other Airbus types. True to seating and technical arrangements, in hindsight all admit it was a mistake to
Airbus’s well thought-out family concept, which on this stretched version of the order the A340 given the advent of the far
the A340 offers an exceptional degree of type can make the nose of the aircraft superior 777 family. These operators of
operational commonality with all of the too heavy and affect performance. large A340 fleets are the same today as
company’s fly-by-wire aircraft, allow- Demand for larger aircraft and better they have always been, due to the cut-off
ing pilots to transition from one type to passenger yield over the past decade of orders after airlines saw the potential
another with minimum training time. All has caused Airbus to stretch the A340 of the 777. This left Lufthansa, Iberia,
four A340 aircraft can be flown with the design to its limits, both in size and Virgin Atlantic, South African Airlines
same type rating, while the cross-crew weight. Its -600 variant at 75.3 meters and Air France (now Air France-KLM) as
qualification concept means pilots can (one inch shy of 247 feet) was the lon- the major operators of the A340. This is
more rapidly qualify for another aircraft gest aircraft in the world at one point, reflected in the maintenance providers
type within the Airbus fly-by-wire product while the ultra-long-range -500 is one specialising in the A340 family and where
line, leading to significant cost savings. of the heaviest aircraft in service, with a in the world expertise is located.
Adding to the advantages of com- maximum take-off weight of 372 tonnes So the leading players in the A340
monality is mixed fleet flying, which (820,000 lbs). There is no question that maintenance market come as no surprise:
allows pilots to be current on more than the -500 and -600 have both benefited AFI-KLM Engineering & Maintenance,
one type of Airbus’s single-aisle and greatly from the in-service experience Lufthansa Technik/Lufthansa Technik

www.airlineeconomics.co Airline Economics: MRO Global 2011 111

 A340 MAINTENANCE

SHORT-TERM INVESTMENT POTENTIAL OF THE A340 VERSES THE 777

Type 2007 AV 2008 AV 2009 AV 2010 AV 2011 AV

777-300ER 15.24 15.60 14.88 15.00 15.48

777-200LR 12.96 13.20 12.24 12.48 12.60
777-200ER 12.36 12.72 11.64 12.00 12.00
A340-600 10.92 12.24 11.16 11.04 10.08
A340-500 11.88 11.76 10.08 9.60 9.12
A340-300 10.68 10.80 9.12 8.64 6.96
777-300 11.88 11.28 9.60 9.00 8.52
A340-200 5.76 5.52 4.92 4.08 3.84
777-200 7.80 7.80 6.36 5.64 5.16

Philippines, Iberia Maintenance and SAA rapid decline over this decade as 787 and are going to be fighting over an ever-
Technical. The A340 global fleet is now A350 deliveries filter through to operators. decreasing slice of business for A340
at a plateau and will eventually turn into As a result, these maintenance providers maintenance over the next 10 years. The
secondary market for the A340 is also
looking limited. The story is a warning to
200 investors in aircraft that new technology
can diminish the prospects and the value
of an aircraft very quickly.
150 The performance of the aging A340
Number of aircraft

family as an investment over the five years

since the start of the credit crisis has seen
100 both the A340-200 and -300 perform bet-
ter than their original direct competitors,
the 777-200 and -300. The market lead
50 carved out by the 777 against the A340
can be seen in table 1.
Table 1 shows a direct comparison
0
between the investment potential of the
Europe Asia/Pacific Africa Middle East Americas 777 against the A340 based on a five-
year section of purchase values, average
*/2%$//2&$7,212)$&200(5&,$/)/((7 annual dry lease incomes and residual
values at the end of the period for an
aircraft around five years’ old. This chart
does not consider the airline, the ease of
9 lease or fuel burn; rather, it is a straight
8 investment comparison. Note that a 777-
300ER approaches annual return rates of
7 between 12–15% sought by investment
Number of aircraft

6 vehicles such as the Nimrod fund on its

5 A380s on lease for 10 years.

4 A340 MAINTENANCE CONSIDERATIONS

3 One of the features of early A340s (and
2 A320s) was their central on-board main-
tenance system. This was considered
1 a big step forward at the time because
0 predecessor aircraft such as the A300
Europe Asia/Pacific Africa Middle East Americas and A310 had only basic test equip-
ment to monitor on-board functions and
*/2%$//2&$7,212)35,9$7(0,/,7$5<$)/((7 no ground-desk connection to help line
maintenance. The A340 Central Mainte-

112 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 A340 MAINTENANCE

Potential yield Cost of aircraft at start Value of aircraft at end Potential profit margin % return per
for investor annum
76.20 143.30 147.00 79.90 11.15%
63.48 136.65 135.00 61.83 9.05%
60.72 120.25 117.75 58.22 9.68%
55.44 126.80 90.40 19.04 3.00%
52.44 112.00 78.45 18.89 3.37%
46.20 98.00 59.75 7.95 1.62%
50.28 111.40 64.00 2.88 0.52%
24.12 41.65 18.00 0.47 0.23%
32.76 75.20 37.05 –5.39 –1.43%

o6RKDVWKH$SHUIRUPHG and A340 MPD Revision 17 were also

Lufthansa Technik / Lufthansa
updated.
DVLWVGHVLJQLQWHQGHG"7KH The A-check interval increase will Technik Philippines (33%)
Iberia Maintenance (21%)
DQVZHUKDVWREH\HVEHFDXVH result in a reduction from seven to five
AFI-KLM E&M (21%)
A-checks a year for a typical use of 4,400
LQVHUYLFHH[SHULHQFHKDVOHG flight hours per annum, increasing aircraft
Direct Maintenance (8%)
SR Technics (17%)
WRLQWHUYDOHVFDODWLRQVp availability. Meanwhile, the new 12-yearly
heavy-check interval will allow operators
nance System was the first step toward to synchronise the six-yearly intermedi-
proactive and preventative mainte- ate-check and 12-yearly heavy checks,
nance. It meant line engineers could leading to a reduction of one heavy check
test the aircraft systems from a single in the aircraft life – a large cost saving.
point in the cockpit, while on-board data The revised intervals can result in air-
links allowed in-flight maintenance mes- frame maintenance cost savings of up to
sages and warnings to be transmitted to 6%. To ease the maintenance planning
the ground in real time and compared burden, Airbus has created a special
against manuals and databases. appendix in the MPD whereby 100%
When the A340 entered service in of the tasks are packaged into checks
1993, A-check intervals were set at 400 according to the type of aircraft operation.
flight hours with C-check intervals at So has the A340 performed as its 3(5&(17$*(63/,72)723),9(,16859(<
15 months. A-checks were increased design intended? The answer has to be
to 500 flight-hours in 1998 and subse- yes, because in-service experience has
quently increased to 600 flight-hours led to interval escalations. If it hadn’t
in 2002, when C checks were moved performed as it should, interval escala- SURVEY RESULTS
to 18-month intervals. Airbus could tions would not have been possible. In a customer satisfaction survey carried
technically justify that checks could be Now the A340 is reaching the high out by Airline Economics A340 owners
increased to 700 flight-hours, but a 40% watermark of its existence in the global and operators were asked to rate their
increase was considered too great for fleet, the next consideration is the sup- maintenance providers according to
the maintenance board. However, in ply of parts. With a limited A340 fleet their performance to date.
April 2009 an agreement was reached to size, parts for the aircraft type will be The results:
extend the A-check interval to 800 flight much harder to get hold of than for other 1. Lufthansa Technik/Lufthansa Technik
hours, while the heavy maintenance types of aircraft and will be expensive. Philippines
check interval was extended from 10 to Parting out A340s could become a lucra- 2. Iberia Maintenance
12 years. The improvements have been tive business in future. However, this all 3. AFI-KLM E&M
incorporated into Revision 11 of the depends on oil prices and with oil being 4. SR Technics
A330 and A340 Maintenance Review a finite commodity there can be no doubt 5. Direct Maintenance
Board Reports, which were approved prices will only go one way, even with the Because the top five maintenance
by the EASA, the US Federal Aviation odd blip here and there for speculation, providers on this list were all awarded top
Administration (FAA) and Transport as is happening in today’s current vola- marks by owners and operators, the split
Canada. The A330 Maintenance Plan- tile period. This means there will be few was decided by the number of replies
ning Document (MPD) Revision 16 airlines willing to take on an A340. received for each. This ranking is there-

www.airlineeconomics.co Airline Economics: MRO Global 2011 113

 A340 MAINTENANCE

fore an indication that the maintenance numerous A330/A340 operators regu- maintenance checks and two dedicated
providers have the A340 market under larly meet Airbus with the goal of direct hangars for painting, marking and label-
control and is an impressive reflection information exchange, such as cre- ling works.
on the work all five perform, be it heavy ating improvement processes more It handles a wide range of temporary
maintenance or line maintenance. Cus- efficiently. To achieve this, intensive and permanent hole and dent repairs
tomers in all instances awarded five out co-operation within the community is on wing and in shop from different com-
of five across the board. necessary, facilitated by sharing tech- posite and metallic parts in fuselage
nical and operational experience in and flight controls.
1. LUFTHANSA TECHNIK/LUFTHANSA areas such as operational problems, It also offers refurbishment, ageing
TECHNIK PHILIPPINES performance data/degradation, main- aircraft and corrosion prevention pro-
Experience: tenance and overhaul performance grammes.
‡ /DXQFKFXVWRPHURIWKH$ (tooling etc), the effects of modification
‡ /HDGHUVKLSLQVSHFLDOVSHFLILFDWLRQ campaign/SB implementation and SB 3. AFI KLM E&M
of aircraft system and maintenance evaluation/validation. The community Air France and KLM operate a com-
programme also shares information concerning bined fleet of 19 A340s. For that reason
‡ ) LUVWF,/FKHFNRQ$ available capabilities and services such AFI KLM E&M is a worldwide leader in
Technical capabilities as overhaul, repair, special task forces A340 components support, providing
‡ 0 DLQWHQDQFH PDQDJHPHQW VHU- and retrofit. such services to more than 150 aircraft
vices/engineering around the world.
‡ 6XSSRUWWRZDUGVDYLDWLRQDXWKRULWLHV 2. IBERIA MAINTENANCE AFI KLM E&M maintains A340s at
‡ 5DPSOLQHEDVHDQGKHDY\PDLQWH- Iberia Maintenance is increasingly three facilities. Heavy maintenance for
nance exploring ways to help customers long-haul aircraft takes place at Orly,
‡ &RPSRQHQW HQJLQH DQG DLUIUDPH keep not just costs but also efforts to and online as well as light maintenance
overhaul a minimum on airframe heavy mainte- DW$PVWHUGDP&'*DQG2UO\
‡ 6WUXFWXUDOUHSDLUV nance, engine overhaul, component The A330 and A340 families share
‡ $YLRQLFV FDELQ DQG FDUJR V\VWHP maintenance and field maintenance. It the same design. Based on its extensive
modifications provides essential, sector-specific ser- experience as an operator, AFI KLM E&M
‡ 5HWURILWPDQDJHPHQW vices customised to fit client needs and has led the field in stretching the mainte-
‡ 7URXEOHVKRRWLQJ budget. Some 4,000 experienced tech- nance intervals between checks, helping
‡ 6WDUWXSVXSSRUW nicians and engineers provide a wide its customers to lower maintenance
‡ 3DLQWZRUN array of MRO solutions. costs through full engineering support.
‡ &RPSOHWHLQFLGHQWKDQGOLQJ In every Iberia Maintenance service,
‡ $2*VHUYLFHV hundreds of hours are dedicated to 4. SR TECHNICS
‡ &RPSUHKHQVLYHFRPSRQHQWSRRO improving processes, reducing TATs, SR Technics (SRT) provides technical
‡ 3DUWDQGWRROLQYHQWRULHV increasing force effectiveness, and cut- solutions for airlines on a global basis.
‡ $GYDQFHGORJLVWLFVHUYLFHV ting down on logistics and engineering Services are provided either directly to
Approvals: management expenses. the airline or through other parties such
‡ 0RUHWKDQPDLQWHQDQFHRUJDQL- In the new aviation environment and as aircraft leasing companies, original
sation approvals, including JAR 145 with the expanding globalisation of the equipment manufacturers or compo-
and FAR 145 MRO industry, Iberia Maintenance has nent trading companies.
‡ $SSURYHG GHVLJQ DQG SURGXFWLRQ updated its management and techni- With headquarters at Zurich Airport,
agency cal services, gearing them towards SRT offers an extensive network of
Advantages: developing solutions to help customers maintenance facilities, logistic centres,
‡ 5HOLDEOHRSHUDWLRQIURPWKHILUVWGD\ define maintenance plans and ensure line stations and sales offices across the
‡ 7DLORUPDGH PDLQWHQDQFH FRQFHSW efficiency The installation of the SAP globe.
with lowest downtimes system for complete management has SRT is well positioned to cater fully
‡ 0LQLPXPRZQSUHSDUWDWLRQHIIRUW been a big success. for the growing demands of airlines in
‡ )XOOIOH[LEOHVXSSRUWRQDQ\UHTXLUH- Iberia Maintenance’s 150,000m2 relation to their technical needs, no mat-
ment, individual projects and daily gives it space to perform a wide range ter where their networks take them.
back-up of airframe maintenance. The facilities SRT has been providing mainte-
‡ /RZHULQYHVWPHQWLQRZQVSDUHV include the necessary back-up shops nance services to customers since the
‡ $ FFHOHUDWHG H[SHULHQFH GHYHORS- such as safety equipment, structural early 1960s as the former maintenance
ment repair, wheels and brakes, galleys, inte- division of Swissair and a founding
The Airbus A330/A340 customer riors, painting, marking and labelling, member of the largest European main-
community was created by Lufthansa providing services in material process- tenance consortium.
Technik to facilitate communication ing for wide and narrow bodies. SRT covers every aspect of operation
between operators and the aircraft Iberia Maintenance offers seven required by an airline and in line with
manufacturer. Under this initiative, complete production lines for heavy the legal requirements, from delivery of

114 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 A340 MAINTENANCE

A340-200 flight frequencies at lower costs. The type thrives standard LD3 containers in side-by-side loading.
in many market environments, and often forms The forward hold accommodates 18 LD3s or six
A340-200/300, JUNE 2011 a key part of larger international operations with 96-inch pallets, while the aft hold takes 12 LD3s
Total orders 246 major carriers, operating alongside other A330 or or four 96-inch pallets.
Total deliveries 246
A340 models. As a flagship with smaller airlines,
the A340-300 provides vital long-range links to A340-600, JUNE 2011
In operation 239 Total orders 97
less populous cities, while it serves as the most
cost-effective 300-seat long-range complement Total deliveries 97
Many A340-200s are used by VIPs or the mili- for operators of A320 family aircraft. In operation 96
tary, such as Royal Brunei Airlines, Qatar Amiri
Flight, the Egyptian government, Saudi Arabia A340-500, JUNE 2011
air force, the Hashemite Kingdom of Jordan, the Total orders 36 A340-600
French air force and the German government. Total deliveries 32
Historically these aircraft were in service with In operation 32 The A340-600 is the longest-fuselage jetliner ever
Cathay Pacific, Philippine Airlines and Air Bour- built by Airbus, and the largest-capacity member
bon. A340-200s were later given performance of the A340 family. With an overall length of 75.3
improvement packages (PIPs), which helped A340-500 metres, it has a seating capacity for 360 passen-
them achieve similar gains in capability as the gers in a three-class layout, or 419 in a two-class
A340-8000, a one-off specially configured air- The A340-500 offered highly efficient, ultra- configuration.
craft for the Sultan of Brunei. These aircraft are long-haul operations upon introduction. In a The A340-600 has a range of 7,900 nautical
labelled A340-213X. The range for this version typical three-class cabin arrangement, this ver- miles. Power plants are Rolls-Royce Trent 500
is 8,000 nautical miles (15,000 km). sion seats a maximum of 313 passengers, and its engines. On this type they typically use only 56,000
Due to its large wingspan, four engines, low cabin flexibility enables seat pitch to be adapted lbs of their certified 60,000 lbs of thrust, which
capacity and improvements to the A340-300, the in units of one inch – while galleys, lavatories should result in reduced engine wear. In addition,
-200 proved heavy and unpopular with mainstream and stowage can be located in different numbers, Airbus claims the use of four engines, as opposed
airlines. Only 28 A340-200s were produced. groupings and locations. to two larger power plants as with the 777, allows for
South African Airways is the largest operator, with With a range of up to 9,000 nautical miles, the a 13% reduction in maintenance costs for operators.
six aircraft. Other operators include Aerolíneas A340-500 is operating on some of the world’s However, as operators have found out, this does not
Argentinas (four), Royal Jordanian (five), Egypt Air longest non-stop routes, including direct Singa- make-up for the losses on fuel costs when com-
(three) and Conviasa (one). pore-Los Angeles flights of almost 19 hours. pared with the 777 burn rates.
This aircraft’s optimised 222-inch fuselage The latest version of the long range A340-600
cross-section gives airlines the cabin versatility was the last throw of the dice for Airbus on the A340
A340-300 to match market requirements, from high-comfort family. The new aircraft brought extended range,
With a service range of more than 7,400 nautical premium seating to economy class layouts in greater passenger capacity and overall substantially
miles, Airbus’s A340-300 is tailored to meet the seven-, eight- and nine-abreast layouts. Below enhanced productivity for airlines.
needs of the 300-seat long-range market – offer- the main deck, the A340-500’s large cargo holds Qatar Airways was the first customer to take deliv-
ing direct point-to-point services and increased accept a full range of freight, including industry- ery of this new, higher gross weight A340-600.

the aircraft, through to maintenance to 5. DIRECT MAINTENANCE Ababa, Ethiopia, as from January 1.
ensure safe, reliable and cost-effective Direct Maintenance was established The main operational line station is at
operation, to final decommissioning of in January 2001 and is a certified line Amsterdam Schiphol Airport in the Neth-
the aircraft from the fleet. maintenance service provider, holding erlands. It has further opened line station
SR Technics offers: EASA Part 145 approval and FAA Repair locations at airports where demand for its
‡ )
 OHHW WHFKQLFDO PDQDJHPHQW VHU- Station approval. In line with customer services was needed. Its EASA Part-145
vices requirements, aircraft line maintenance is approval covers a total of 39 aircraft-
‡ $
 LUFUDIWPDLQWHQDQFHLQFOXGLQJOLQH provided to operators of a wide range of engine combinations, and is being
maintenance, base maintenance, Airbus and Boeing aircraft types. It is the extended to include additional widebody
aircraft overhaul and additional only independent widebody line mainte- aircraft types and to provide services at
maintenance services nance provider of the Netherlands. other European airports as well as addi-
‡ $LUFUDIW$2*UHFRYHU\DQGDGKRF The addition of the Emirates A340-500, tional locations worldwide.
services powered by RR Trent engines, resulted in Direct Maintenance is part of the Direct
‡ ,QWHJUDWHG $LUOLQH 6ROXWLRQV ZKLFK Direct Maintenance being EASA Part 145 $YLDWLRQ*URXSEDVHGLQWKH1HWKHUODQGV
delivers tailor-made solutions up to approved to perform line maintenance a market leader in service provisioning to
and including complete technical out- on an impressive number of 40 aircraft- the aviation industry worldwide. It also
sourcing of all maintenance services engine combinations. The support for has offices in Ireland, Kenya, Tanzania,
for aircraft engines and components. Emirates is being provided at Addis Libya, Ethiopia, China, Japan and the US.

www.airlineeconomics.co Airline Economics: MRO Global 2011 115

 A340 MAINTENANCE

ORDERS, DELIVERIES AND OPERATORS OF THE AIRBUS A340 AS OF JUNE 30

A340-200 A340-300 A340-500 A340-600 Total
Ord Del Opr Ord Del Opr Ord Del Opr Ord Del Opr Ord Del Opr
Airbus Executive and Private Aviation 6 6 9 1 1 3 7 5 5 2 2 2 16 14 19
Aerolíneas Argentinas 4 3 7
Afriqiyah Airways 1 1
Air Canada 8 8 2 2 10 10
Air China 3 3 6 3 3 6
Air China Southwest Company 3 3 3 3
Air France 3 3 11 11 16 14 14 16
Air Mauritius 5 5 6 5 5 6
Air Namibia 2 2
Air Tahiti Nui 4 4 5 4 4 5
AirAsia X 2 2
Arik Air 2 2 2 2
Austrian Airlines 2 2 2 2 4 4
Cathay Pacific 4 4 7 7 14 11 11 14
China Airlines 6 6 6 6 6 6
China Eastern Airlines 5 5 5 5 5 5 10 10 10
Conviasa 1 1
Egyptair 3 3 3 3 3 3
Emirates Airlines 8 10 10 10 10 10 18
Etihad Airways 4 4 4 7 7 7 11 11 11
Finnair 4 4 7 4 4 7
Flightlease 2 2 2 2
Gulf Air 6 6 4 6 6 4
Hainan Airlines 3 3
HiFly 3 2 5
Iberia 18 18 19 16 16 17 34 34 36
ILFC 16 16 13 13 29 29
Kingfisher Airlines 2 2
Kuwait Airways 4 4 4 4 4 4
LAN Airlines 4 4 5 4 4 5
Lufthansa 7 7 28 28 26 24 24 24 59 59 50
Olympic Airlines 4 4 4 4 4 4
Philippine Airlines 8 8 4 8 8 4
Qatar Airways 4 4 4 4 4 4
Royal Jordanian 4 4
Sabena 3 3 2 2 5 5
Scandinavian Airlines System 7 7 6 7 7 6
Singapore Airlines 17 17 5 5 5 22 22 5
South African Airways 6 6 6 8 6 6 9 12 12 23
SriLankan Airlines 3 3 6 3 3 6
Surinam Airways 1 1
Swiss International Air Lines 9 9 15 9 9 15
TAM Linhas Aéreas 2 2
TAP Portugal 4 4 4 4 4 4
Thai Airways International 4 4 4 6 6 6 10 10 10
Turkish Airlines 7 7 9 7 7 9
Union des Transports Aériens 7 7 7 7
Virgin Atlantic Airways 7 7 6 14 14 19 21 21 25
Undisclosed 4 4
A340-200 A340-300 A340-500 A340-600 Total
Ord Del Opr Ord Del Opr Ord Del Opr Ord Del Opr Ord Del Opr
Totals 28 28 27 218 218 212 36 32 32 97 97 96 379 375 367
Backlog 4 4

116 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ASIA-PACIFIC

ASIA-PACIFIC MRO

A
s a result of the stronger includes successful outposts of European 2011, ST Aerospace entered into a joint
economic outlook, Asia’s and US MROs that are generally perform- venture with Xiamen Aviation Industry
fleet and MRO growth ing well. Monarch Aircraft Engineering (Xaico). The new company: ST Aero-
outlook is positive. Asia- (MAEL) has outposts in the Maldives and space Technologies Company (Statco)
Pacific’s fleet and MRO Goa. The Maldives facility is proving to has unveiled a new engine MRO facility
growth outstrips that of other regions as be a real winner for MAEL, with numer- in Xiamen, China. The US$78 million
a mad rush to be ready to service the huge ous deals signed during 2011, including (about S$101 million) facility has a capac-
fleets on order takes place. China’s growth a line maintenance technical handling ity to support up to 300 engines annually.
over the next 10 years makes it formidable agreement with Alitalia to support A330 It will initially provide MRO and total
in terms of fleet size, but the MRO market aircraft operating out of Male airport. support for the CFM56-7B and CFM5-
is still muted in the APAC region by the In the China/India, Southeast Asia 6-5B series of engines. Statco has received
newer aircraft that will enjoy a mainte- region, the fleet on order is mainly newly the Part 145 certification from China Avi-
nance honeymoon. This taken together delivered next-generation aircraft. As ation Administration of China (CAAC)
with the fact that most of the fleets on such, the money to be made in MRO is and has also received approvals from the
order are under OEM aftermarket con- in the engine game. Of all the MROs in US Federal Aviation Administration and
tracts means there is not at this time or the APAC region, the most active in the Korea’s Ministry of Land, Transport and
within the next five years a great deal of engine market expansion is ST Aerospace Maritime Affairs for the maintenance
business to be had in the area outside of (Singapore Technologies Aerospace). In of the CFM56-7B series of engines. The
OEM joint ventures or existing fleet ser-
vice requirements. Also note that India COMPOUND ANNUAL GROWTH RATES
combined with China has a fleet that
Fleet AP CH IN Total
will match that of the rest of APAC put
together by 2021. 2011 4.7% 8.6% 9.0% 6.4%
The APAC region presents a tale of 2016 5.2% 7.2% 8.7% 6.3%
two sides when considering MRO. There
2021 5.0% 7.9% 8.8% 6.3%
are the long-established MRO players
such as ST Aerospace, Ameco Beijing Total MRO AP CH IN Total
and HAECO, which are very busy, and 2011 4.6% 9.7% 9.8% 6.3%
then there is the substantial investment 2016 4.3% 8.5% 9.3% 6.0%
going into India and China, mainly being
2021 4.4% 9.1% 9.6% 6.2%
led by the OEMs. The former group also

www.airlineeconomics.co Airline Economics: MRO Global 2011 117

ASIA-PACIFIC

programme for Tiger Airways. The pro-

ASIA-PACIFIC FLEET FORECASTS gramme’s six cadet pilots are now under
the employment of Tiger Airways and
10,000 Asia-Pacific
have received their MPL from the Civil
China
9,000 8,635 Aviation Authority of Singapore. On
India
capability development, ST Aerospace’s
8,000 Total
affiliate, Vision Technologies Aerospace,
7,000 has entered into an agreement to acquire
6,371
100% of the shares of DRB Aviation Con-
6,000
sultants to enhance its aircraft interior
5,000 4,672 4,460 engineering design capabilities, while ST
Aerospace secured a cabin reconfigura-
4,000 3,457 3,342 tion project for Jet Airways’ Airbus A330.
3,000 2,749 Singapore has long enjoyed its posi-
2,364
tion as the APAC aviation hub, challenged
2,000 1,566 only by Hong Kong. The largest MRO
1,000 833 players in the region have their head-
357 550
quarters in these two locations. But
0 government investment agencies acting
2011 2016 2021
for Malaysia and Thailand have been
encouraging inward investment. Thai-
newly completed facility is located on a Finance. It is possible Team will cause a land has over the past year been hindered
415,702 sq ft plot of land, near Xiamen round of rate decreases in the engine leas- by political unrest and is now suffering
Gaoqi International Airport. ing market, but the impact on the market severe flooding but it has constructed the
At the Paris Air Show 2011 it was will not be clear until next year at least. world’s largest maintenance hangar for
announced that ST Aerospace and Maru- Of all the APAC MROs, it is ST Aero- three A380 aircraft and has world-class
beni Corporation had entered into a joint space that is the true global player in infrastructure in place for repair service
venture to form an engine leasing com- the region. It is the aerospace arm of ST investment. The country is currently
pany in Singapore. The new JV company, Engineering, and operates a global MRO widely recognized as one of the foremost
Total Engine Asset Management (Team), network with facilities in the Americas, aircraft maintenance centres in Asia. The
will be equally owned and jointly man- Asia-Pacific and Europe. It is the world’s location is central, and Boeing and Airbus
aged by ST Aerospace and Marubeni. largest aircraft MRO provider, employing will need to provide their services through
Team’s initial engine leasing portfolio will over 8,000 engineers, with a global cus- bases in the country. Beyond that the out-
include the CFM56-3, CFM56-5B and tomer base that includes leading airlines, look remains firmly focused on China
CFM56-7B engines, which mainly power airfreight and military operators. The key and India. MAS- GMR Aerospace Engi-
narrowbody aircraft such as the Airbus for ST Aerospace is that it is in effect an neering (MGAE), a 50/50 joint venture
A320 and Boeing 737. The JV plans to integrated service provider that offers a between Malaysian Aerospace Engi-
invest approximately US$100 million in spectrum of maintenance and engineer- neering (MAE) and GMR Hyderabad
new assets within the first two years, with ing services covering all areas, including International Airport is now launching.
equity injection of up to US$40 million. airframe, engine and component mainte- MAE is a subsidiary of Malaysia Airlines
The new JV will leverage ST Aerospace’s nance, repair and overhaul; engineering (MAS) while GMR Hyderabad Inter-
expertise in total engine support, includ- design and technical services; and avia- national is a subsidiary of India-based
ing engine technical management and tion materials and management services GMR Infrastructure. This joint venture
engine maintenance-by-the-hour, along- such as Total Aviation Support. is a third-party airframe MRO facil-
side Marubeni’s extensive experience ST Aerospace has had a bumper year, ity, the first of its kind for its scale and is
in financing and marketing knowledge. with over S$1.033 billion worth of avia- located in the Special Economic Zone at
Gentaro Toya, senior operating officer, tion maintenance contracts signed so the Rajiv Gandhi International Airport
transportation machinery division, at far in 2011. ST Aerospace secured new in Hyderabad. The MGAE facility has
Marubeni Corporation, commented on maintenance contracts worth a total one widebody hangar, one narrowbody
the deal: “By entering into the aircraft of S$453 million in the third quarter of hangar with three bays, and another
engine leasing business and strengthen- 2011 alone. Besides airframe redeliver- painting/narrowbody hangar with asso-
ing our comprehensive range of services ies, ST Aerospace serviced 70 engines and ciated workshops. It has the capability to
to airlines around the world, Marubeni 13,775 components for both commercial provide base maintenance services, start-
intends to make a further material contri- and military customers during the third ing with Airbus A320, ATR 42/72 and
bution to the aviation industry.” It is hard quarter of 2011. In another develop- Boeing 737NG, and subsequently A330
to see as yet how this JV will affect the ment, its commercial pilot training arm and Boeing 777 aircraft. MGAE currently
engine leasing businesses of firms such as successfully completed Singapore’s has close to 350 employees and the bulk
Engine Lease Finance and Willis Lease first Multi-crew Pilot Licence (MPL) of the manpower is made up of a local

118 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ASIA-PACIFIC

Indian skilled workforce, while retired

MAS engineers and technicians are also
ASIA-PACIFIC MRO FORECASTS (US$MILLION)
employed at competitive remuneration
25 Asia-Pacific
packages to kick-start operations. In China
preparation for MGAE’s operations in India $21.0
Hyderabad this year, MAE has trained 72 Total
20
Indian engineers hired by MGAE.
As mentioned previously, it is the
$15.7
OEMs that are leading the incursion into
15
India and China. One of the most recent
announcements from Airbus was also one $11.5 $12.1
of the most interesting: Pipavav Shipyard, 10 $9.8
India’s biggest shipbuilder by market $7.8
$7.1
value, has confirmed it is to form a joint
venture with EADS/Airbus and SKIL 5 $4.7
Infrastructure to set up an aircraft main- $3.0
tenance facility. EADS will acquire a 26% $1.8
$0.7 $1.1
stake in the Indian venture. EADS retains 0
an option to further increase the holding 2011 2016 2021
to 49%. Pipavav, based in Gujarat, will
hold a 51% stake in the venture that will
be used for both civilian and military o,WLVWKH2(0VWKDWDUH It is not all rosy and good in the APAC
applications. In the first phase, the facil- region though. Generally the pressures
ity and related infrastructure looks set to OHDGLQJWKHLQFXUVLRQLQWR for the MRO companies in this region
cost the JV over US$100 million. ,QGLDDQG&KLQD)RUH[DPSOH are the same as for those in the US or
Airbus has openly said it is target- Europe. Indeed, Qantas has lost a third-
ing the aftermarket to offset peaks and 3LSDYDY6KLS\DUG,QGLDnV party maintenance contract. Jetstar will
troughs in the manufacturing cycle, and ELJJHVWVKLSEXLOGHUE\PDUNHW now send fleets offshore for mainte-
that it is seeking a takeover target that nance after the ongoing Qantas conflict
already has the customer base and indus-
YDOXHKDVFRQILUPHGLWLVWR with the unions caused too much dis-
try experience to combine with Airbus’s IRUPDMRLQWYHQWXUHZLWK($'6 ruption. Qantas chief executive Alan
technological knowledge. Airbus doesn’t Joyce criticised unions represent-
$LUEXVDQG6.,/,QIUDVWUXFWXUH ing its pilots, maintenance engineers
want to get into the traditional MRO
market, and would rather focus on com- WRVHWXSDQDLUFUDIW and ground handlers for holding the
ponent repair and traditional airframe PDLQWHQDQFHIDFLOLW\p company to ransom. He revealed that
maintenance. New Caledonia’s international airline,
Meanwhile, Boeing has opened a Guangzhou station provides line main- Aircalin, has cancelled its aircraft main-
new service centre in Beijing to provide tenance and releasing for the carrier’s tenance contract with Qantas, while
enhanced product support to China’s Boeing 777. This was after a previous 2011 Qantas’s low-cost subsidiary, Jetstar,
commercial aviation industry. The facil- agreement with Turkish Airlines to pro- has been forced to service some of its
ity comprises pilots and experts in flight vide line maintenance in Beijing and aircraft overseas. In fact Aircalin can-
operations, spare parts and maintenance Shanghai. In June, Ameco Beijing com- celled its contract for line maintenance
engineering who are dedicated full-time pleted Air China’s first A330 aircraft on A320s and A330s. It is unlikely that
to serving airlines in China. IPTE project that involved the cabin and Qantas’s MRO arm will see third-party
The main third-party maintenance entertainment system. As planned, Ameco maintenance business for a while, after
provider in China is Ameco Beijing. The Beijing will perform IPTE for a total of 16 this recent disruption.
venture, set-up by Lufthansa and Air Air China A330 aircraft by the end of this The future remains fairly secure for
China some years ago, has been quietly year. In recent years, Ameco Beijing has MROs in the Southeast Asian region,
building its portfolio during 2011 and, as been successful in market development in but the rush to get a slice of the action by
international traffic expands out of Bei- North America, providing services includ- just about every major MRO and OEM
jing, this MRO provider will benefit. It is ing airframe overhauls, cabin upgrade and could lead to overcapacity before the end
not hard to see that Ameco will need to modifications, engine overhauls and line of this decade, especially with regard to
further expand its Beijing facilities before maintenance for a number of fleets of India. India represents a perfect target
long to cope with the levels of work that are the major airlines in the region, with an for MROs, and they are building infra-
sure to come over the next decade. increasing number of customers. Ameco structure at pace. With MROs securing
During 2011, Ameco Beijing’s Guang- Beijing has also been providing line sites at the initial planning stage for air-
zhou station added Turkish Airlines as maintenance services including aircraft field expansion, it remains to be seen if
a new line maintenance customer. The releasing to Singapore Airlines in Beijing. all of this investment will pay dividends.

www.airlineeconomics.co Airline Economics: MRO Global 2011 119

ASIA-PACIFIC

Ameco Beijing
Aircraft Maintenance and Engineering area of 10,000 sqm, which can meet painting or one Boeing 747, 767 and
Corporation (Ameco Beijing), located at the requirements of stripping, washing 737 for heavy maintenance
Beijing Capital International Airport, is and painting of any types of aircraft. Ameco Beijing is not only the first
a joint venture between Air China and  M
 a^^g`bg^k^iZbk(ho^kaZnephkdlahi joint venture in the Chinese aviation
Lufthansa. Ameco was established in and an engine test cell cover an area of sector but also the most powerful main-
1989, with Air China holding 60% and 26,000 sqm. tenance, repair and overhaul provider
Lufthansa 40% of the registered capital.  <hfihg^gmphkdlahil\ho^kZgZk^Z in China. Ameco Beijing has more than
The registered capital is US$187.53 mil- of 20,000 sqm including tempera- 5,000 employees and holds 14 certifi-
lion and the joint-venture agreement was ture-controlled avionics and electric cates issued by airworthiness authorities
signed for 40 years. workshops, landing gear overhaul including the FAA, EASA and CAAC.
Ameco Beijing adjoins No. 2 terminal shop, and mechanic, pneumatic and In aircraft maintenance, the company
of Beijing Capital International Airport in hydraulic workshops. services almost all modern Boeing and
the north and No. 3 terminal in the east,  :g:,1)aZg`ZkpbmaZ-*%)))&ljf Airbus aircraft while Ameco provides
covering an area of more than 600,000 maintenance hall that can accom- engine overhaul on Rolls Royce and Pratt
sqm. The maintenance facilities include: modate six widebody and four & Whitney products, and offers repair and
 :_hnk&[ZraZg`Zkpbma.,%1))&ljf narrowbody aircraft at the same time, overhaul services for almost 10,000 com-
floor space, including a 35,000-sqm including the A380 super-jumbo. ponents. Aircraft painting, engineering,
maintenance hall and shop.  :g^p;0-0aZg`Zkpbmama^_ng\mbhg technical training and logistics services, as
 : _neer ^g\ehl^] Zg] m^fi^kZmnk^& of painting and heavy maintenance well as equipment calibration and repair,
controlled painting hangar covers an can host either one Boeing 747 for complete the product portfolio.

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recovery services  PZkkZgmrZg]bglnkZg\^  Fh]bÕ\ZmbhglZg]ni`kZ]^l
 :H@lniihkm management  Ihlm&e^Zl^\^kmbÕ\Zmbhg

120 Airline Economics: MRO Global 2011 www.airlineeconomics.co

 ASIA-PACIFIC

MRO Directory: Asia Pacific

HEAVY MAINTENANCE DIRECTORY - ASIA PACIFIC REGION
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 STG Aerospace unveils the latest innovation
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a unique pattern-matching service.
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<2<:( stgaerospace.com Emergency Floorpath Evacuation System

TeamSAI provides consulting and technical ser vices to aviation industr y clients including
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