Neos, niche markets and nacelle MRO - Aircelle in the US

Richard Nevill VP of Aircelle’s customer support and services division explains why after seven years subcontracting maintenance work Aircelle has opened up its own MRO shop in the US.

What prompted Aircelle to open its first MRO facility in the US? 

We have global responsibility for maintaining, repair and overhaul capability for our nacelles in each of the regions of the world and you can do that through subcontractor arrangements or you can go further. We have a facility in Europe, located not far from the manufacturing plant, which is the nerve centre for overhaul of our nacelles and covers the European region. Then we’ve got a joint venture with AFI KLM E&M to cover the Middle East called AMES, and long-term agreements with HAECO and SIAEC in Asia.
In the US we’ve been working with a company called Applied Composites Engineering (ACE), who are based outside of Indianapolis, for about seven years. And it has reached the point with the advent of the A320neo and A330neo that we felt that a subcontractor arrangement in the US was no longer appropriate, so we purchased the nacelle repair capability of ACE and created our new company, Aircelle Services Americas, as a result of that.

Tell us about Aircelle Services Americas
Our new company is FAR Part-145 approved and we have an existing customer base which is based on the range of nacelles that we currently support in the US – largely those for regional and business jets. Aircelle Services Americas (ASA) is well placed for the regional carrier market, with Republic Airlines and its large fleet of Embraers based in Indianapolis and Compass Airlines not far away.
For the other commercial aircraft we’re moving the tools and jigs across to support the mainline carriers. We will soon have A320ceo CFM56 capability in house, as well as Trent 700, supporting the A330. We will also support nacelles on the A318 based down in Latin America and those the SSJ100 based down in Mexico.
And while the A320neo and A330neo are not yet in service, we needed to have capability to service their nacelles available, so we will be putting all that capability into ASA.

Were the next generation aircraft the key driver to expand MRO facilities in the Americas?
Basically yes. If you look at the current mainline aircraft that we have operating, there’s far more activity in Asia and the Middle East than there is in the US, so the US hasn’t required the focus of attention. Until recently we’ve been able to handle demand through the arrangement we had with ACE, but for the future we definitely need to build on that.

Will ASA provide MRO for all Aircelle nacelles?
Yes, the only tools that we’re not going to put in are the A380 jigs because, apart from being huge and expensive, there are no A380 operators in the US at this time. We have a strategic placement of emergency items in the US in case that one our Middle East or Asian carriers has need of an item, but we don’t need repair capability in the US at this point.
With significant expansion plans in the offing what do you think the ASA facility will look like in five years’ time?
That’s a really good question. At the moment it’s a very small facility, with a staff of seven. Which will double up over the next 18 months and then we plan to double up again over the 18 months following that.
We did a large analysis of all the facilities in the US and the nacelle business is quite fragmented. We think a good size to aim for is 30 MRO engineers, and in five years’ time that’s where I think we will be.
Since taking over the facility we’ve reconfigured the building and created quite a bit of space, so we can handle a reasonable amount of expansion in the facility as it stands. We’ve gained agreement enabling us to extend the facility, if we need to.

Alongside increasing staff and space, what is the strategy to cope with new MRO contracts?
The thing about the nacelle is that it’s an “on-condition” item, so there’s no scheduled maintenance pattern for it, which means that to optimise the cost of operations for the customer you have two options.
You can go for a completely unscheduled approach and wait for until something fails, but then you take the risk of the downtime at that point. Or you can go for a soft-overhaul planned schedule of maintenance which is designed to take out of the any known issues on the nacelle and refresh any components that need refreshing periodically and we do that using long-term service contracts.
We would be aiming to put long-term contracts in place with all the major customers with the US to schedule the workload for that facility

Do you think long-term service contracts are going to be a key trend in nacelle MRO?
Yes. We’ve done a number of contracts on a long-term service basis and the interest in them is growing. Having said that, the customer base is very diverse in the way it approaches the market. Some want to do a nose-to-tail deal and then sell it as part of the aircraft – so you have the Airbus Flight Hour Services team selling such a solution, as well as some of the major MROs, such as Lufthansa Technik and Air France Industries KLM Engineering & Maintenance.
As a nacelle manufacturer we cannot offer an aircraft nose-to-tail deal. With those customers that want to do a specific MRO deal for the nacelle, we’ll do it either a time and materials basis or on a long-term service basis. If we go for the long-term service approach then it helps to schedule the workflow to take advantage of the C-check schedule and when the aircraft is going to be down take the nacelle and do any work that is required at the same time.
But also, if a customer wants a full nose-to-tail agreement we’ll work with the established MROs in the industry in order to help them provide the best solution as well, which we have done.

Does having the Aircelle Services Americas site help you to build stronger relationship with US MROs?
It puts us on a stronger footing. As the OEM we’ve now put our footprint down in the Americas and as such I think we’ll get a lot more attention from the marketplace and potential competitors and collaborators, so we’re looking forward to seeing how that works.
We’ve started by concentrating on our closest customers which are the regional jet carriers and those carriers who have got aircraft with our nacelles and who know they need our help in that region.
Some of those fleets are quite small, for example, the A318 fleet in Latin America – there’s only one fleet operating in the world and it makes no sense to be sending nacelles back to Europe for that. Similarly with the SSJ100, which is doing really well at Interjet in Mexico, there’s no European fleet and so we’re moving the tooling across to make sure that we can support Interjet.
For these niche support applications it makes sense to both the customer and ourselves to have the tooling in the US.

Now you have bought ACE’s nacelle repair capabilities, is your relationship with the company over?
No, not at all, we have a great relationship with them and they attended our opening. ACE has an autoclave and some precision measurement equipment that’s very useful. It’s a long and lasting relationship which will continue and they’re available to back us up as necessary.

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