Two Central American MROs have especially compelling stories. Aeroman launched service from a single-bay hangar with just a roof—and no walls; now it comprises 12 production lines in four hangars—with more on the way. Coopesa, the older of the two—it celebrated its 50th anniversary in 2013—has been working toward expansion for years and recently broke ground on a facility that should open in 2016.
In a region of seven countries and home to about 200 aircraft, these two MROs dominate—Aeroman in San Salvador, El Salvador, and Coopesa in San Jose, Costa Rica. While ST Aerospace took a stab at becoming a third player in the region, operating as Panama Aerospace Engineering, starting in 2007, that effort lasted only about six years because there was not enough demand in the region for three major players, according to the company.
Aeroman has grown exponentially since it started pursuing third-party work in 1998—despite some dramatic business challenges.
Originally an offshoot of TACA Airlines’ technical department, Aeroman built its first hangar in 1994. TACA work filled just 75% of the capacity, so third-party clients were sought. Aerolineas Argentinas started sending Boeing 737-200s to El Salvador for the cost advantages, says Ernesto Ruiz, the MRO’s chairman, who was then in charge of TACA and third-party MRO. “But in 2001, the economy of Argentina turned and became the cheapest country on the continent, so Aerolineas went home and we had capacity again,” says Ruiz.
Then in 2001, TACA decided to switch from five models to one—the Airbus A320. This streamlining meant a reduction in maintenance requirements; instead of filling 75% of Aeroman’s hangars, the figure was closer to 25%, according to Ruiz. At that time, the MRO operated four production lines and had to drop to three.
That prompted Aeroman to ramp up training on the A320 and pursue new customers—a move that proved pivotal.
“Attracting America West and JetBlue changed our lives,” in 2004, says Ruiz, because they were U.S. airlines. And JetBlue, a newcomer on the low-cost carrier scene, was making a splash with LiveTV. “A satisfied customer is your best advertisement,” he adds—and they really helped put El Salvador on the MRO map.
Aeroman became a founding member of Airbus MRO network a year later and by 2006 decided to build another hangar and aggressively pursue the third-party market. It found a minority investor and secured the holding company that owned ACTS, the spin-off of Air Canada’s maintenance arm. ACTS, which later became Aveos, shut down in 2012, but its demise did not affect Aeroman’s finances because the latter was a separate legal entity. That holding company withdrew from the MRO a year later, so a group of local and foreign investors took over in 2013, and “they believe in the company, as evidenced by our expansion,” says Ruiz. Aeroman added its third hangar in 2008 and a fourth in 2012.
By 2014, Aeroman was at capacity and considered building a facility outside San Salvador. After carefully weighing the expansion/productivity balance, all signs pointed to growth. The company also explored taking on Embraer or widebody maintenance.
As these decisions were being pondered, a new government took over and made expansion and foreign investment easier. Aeroman signed a longer lease for its land—four years—at a more competitive cost than it had previously. “The growth in this country is slower than the rest of the Central American region,” so the government is starting programs to attract investment, says Ruiz.
Today Aeroman operates 12 production lines and is scheduled to open its fifth hangar in late July. This 116,000 sq. meter (28.6-acre) hangar will be its biggest—capable of holding any aircraft (except for the A380)—up to eight narrowbodies or two A330s and three narrowbodies simultaneously. A second phase will include shops and a dedicated training building, and if workload dictates, there is space for a third, mirror-image hangar.
The fifth hangar introduces widebody work—A330s in particular. “Customers were asking for A330 MRO and there is not much capacity,” says Ruiz, who also anticipates European operators flying to Mexico as potential customers. A330 training, which builds on the A320 experience, starts in May.
If tooling—a critical component—arrives on time, Aeroman could be ready for its first A330 in September.
Bosco Rico, commercial director, says Aeroman also is looking at Boeing 767 and 777 maintenance.
Ruiz reveals that Aeroman and a potential partner are in discussions about developing composite repair services in San Salvador to enable in-depth structural repairs.
Aeroman’s growth trajectory has been impressive—and sustainable. The company has been able to attract production lines—so it has steady, nose-to-tail work for major airlines. Although it lost JetBlue to Lufthansa Technik, which is scheduled to open a facility in Puerto Rico later this year, it still counts Southwest Airlines, American Airlines, Delta Air Lines and Avianca’s Central American fleet as major customers.
The MRO’s workforce is stellar, Rico says. “Walking around the floor, you see the energy and motivation, which is key to what we do.” Southwest Airlines named Aeroman its top supplier during its most recent periodic review.
Aeroman recruits technicians from high school and pays for 1.5 years of external training. Afterward, the recruits receive at least two years of on-the-job training—with a salary and benefits. “We provide a career path here and don’t just pay the minimum wage,” says Ruiz. Turnover rates are only 2-3%, he notes.
Ruiz cites his employees’ strong work ethic and notes that the MRO provides generous benefits, including services such as transportation to work, an on-site medical clinic, a daily cafeteria-provided meal and compensated time off for family matters.
Aeroman always has a pipeline of people in training, too—right now it stands at 200.
Given the competitive landscape—including aftermarket growth in Mexico (see page MRO18), Ruiz says Aeroman stays strong, and profitable, by delivering high-quality products on time—or ahead of time. It is also located in a free-trade zone, which means parts move in and out of the country easily and are not taxed. Aircraft land at El Salvador International Airport and taxi straight to Aeroman’s hangars where staff immediately unload parts from the belly.
Coopesa, like Aeroman, is situated in a free-trade zone and also is building new hangars—but Coopesa will replace its functional (and full), but aging ones—so the whole company will have a fresh look. The more-than 50-year-old MRO has been planning for years to relocate—and admittedly, it has been “a bumpy process,” says CEO Gabriel Gonzalez. But the good news is that ground was broken on March 17 and the facility is on schedule to open in 2016—14-16 months after construction starts.
The government needed Coopesa’s land to expand the San Jose International Airport terminal—but because the MRO is a cooperative, the government is mandated to provide space at the airport equal to what it has now. While this is appreciated, it limits Coopesa’s growth—so the MRO secured land adjacent to the new space for expansion.
The first hangar mirrors what it has now and will house six narrowbodies; the second hangar, which would double capacity and add workshops, could open as early as 2017.
Coopesa’s existing hangars are full, bustling with 55% of work from lessors and 45% from airlines on Boeing 737s and 757s, Airbus A319 and A320s, MD-80s and Embraer 190s. Given the high percentage of lease returns, maintenance scheduling can be tricky because these types of projects can hit snags and fall behind schedule.
“We’re hoping for more nose-to-tail lines with the new hangars,” says Gonzalez.
The facility already provides heavy checks, paint and post-delivery mods such as winglets for Copa Airlines, a strategic partner.
Other airline customers include Ecuadorian flag carrier Tame, VivaAerobus, Aeromexico, Gol, Bahamas Air, Cayman Airways, Avianca and Boliviana de Aviacion—along with most of the top leasing companies.
The MRO’s upcoming facility transition has sparked palpable enthusiasm among employees and prompted capability expansion. Sidewall replacement services were introduced in late 2014, and the MRO would like to offer component maintenance, such as brakes, wheels and landing gear. “Our intention is to look for joint ventures,” or other strategic alliances such as the ones it established with Pemco for 737 cargo conversions or the Canadian training company FlightPath in January.
Coopesa completed four 737 conversions for Pemco last year and anticipates the same number in 2015.
In the meantime, it gained Airbus approval in December 2014 and hopes to become part of the Embraer maintenance network in June. In the first quarter, Coopesa employees were enrolled in structural engineering classes in Toulouse, logistics training in Miami and material planning in Ashburn, Virginia, all related to Airbus work.
The Costa Rican MRO employs 702, of whom 480 are associates, or cooperative owners. The rest of the staff are in the process of becoming associates.
Like Aeroman, Coopesa says it has very low turnover, but it faces a shortage of mechanics because of growth projections.
To solve this, it initiated an alliance with a local training school, whose graduates can come to Coopesa for additional, financed training before applying for their license. In 2014 this yielded 32 graduates with a local license and six with an FAA-issued license.
Coopesa is totally booked through the end of May and is 70% booked for the second half of the year. The only remaining slots are available during the airlines’ peak summer and December flying seasons.
It performs 90% of line maintenance at San Jose International.
Given the growth at both Aeroman and Coopesa, it would be difficult for another MRO to gain a foothold in Central America.
Galleries See Aeroman’s and Coopesa’s expanding MRO operations: AviationWeek.com/AeromanCoopesa