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Aviation Week Announces Top 10 Airframe MRO Providers

MROs are ramping up new capabilities and investing in IT to prepare for the next generation of airframes.

Aviation Week’s biennial Top 10 Airframe MRO compilation serves as a barometer of the commercial aviation aftermarket. This year’s data, more than ever, shows how much transformation is underway. While ST Aerospace continues to dominate airframe maintenance labor and Lufthansa Technik generates the most third-party MRO revenue, only five out of the Top 10 from 2013 appear there this year—mostly due to consolidation.

Major fleet shifts contribute to the aftermarket consolidation because support packages are becoming bigger and bundled, as many airlines try to use fewer vendors and OEMs widen their participation in the support market.

Looking at the fleet shows why the industry is churning. During the next decade, the global commercial fleet is expected to grow to 40,638 in 2024 from 29,909 this year—which includes 20,672 new aircraft entering service and 9,143 retiring, according to Aviation Week data. As aftermarket providers ramp up new capabilities to service the next-gen aircraft, they are also deciding when to phase out MRO services for older ones. These business decisions affect everything from tooling to spares, training, intellectual property and IT.

2014 AIRFRAME MAINTENANCE OURS AND REVENUE

Company 2014 Third-Party Airframe Maintenance Hours Total 2014 Airframe Maintenance Hours* Total 2014 Third-Party MRO Revenue**
ST Aerospace 12.0 million 12.0 million $1.5 billion
Haeco 9.4 million 11.7 million $1.5 billion
AAR 4.9 million 4.9 million $460.0 million
AFI KLM E&M 702,000 3.6 million $3.8 billion
Lufthansa Technic not disclosed 3 million $4.8 billion
Gameco 1.1 million 2.9 million   not disclosed
Turkish Technic not disclosed 2.9 million $745.0 million
Evergreen Aviation Technologies (EGAT) 1.6 million 2.2 million $465.0 million
Aviation Technical Services 2.0 million 2.0 million   not disclosed
Sabena Technics 2.0 million 2.0 million $397.6 million
Almost Top 10
Aeroman 1.8 million 1.8 million   not disclosed
Mexicana MRO 1.7 million 1.7 million $48.0 million
Flightstar 1.6 million 1.6 million $110.9 million
GMF AeroAsia 1.2 million 1.6 million $264.0 million
TAP M&E 1.3 million 1.9 million $185.6 million
Etihad 1.2 milliion 1.2 million $275.0 million
SR Technics 1.0 million 1.0 million $1.2 billion
   

         * includes parent airline figures when applicable

**Inlcudes airframe, component and engine MRO

   Source: Aviation Week & Space Technology MRO Edition

   

Meanwhile, many MROs have launched continuous improvement processes to increase efficiency—and several are using new IT systems to gain further upgrades and prepare for the bigger data requirements of next-generation aircraft and powerplants.

Etihad Airways Engineering, which acquired Abu Dhabi Aircraft Technologies (ADAT) from Mubadala last year, is a good example because it is actively developing airframe and component capabilities for new platforms, including engineering and technical training support for both Etihad and third parties. This “builds on the success of two years of nose-to-tail A380 modifications,” according to Jeff Wilkinson, Etihad senior vice president-technical. 

Etihad, which typically filled 30-40% of ADAT’s load before the acquisition, plans to operate a large fleet of Boeing 787s, and the engineering group is “determined to become a 787 center of excellence.” It also soon will develop a plan to support the Airbus A350. The carrier implemented the AMOS IT platform for the Airbus A380 and 787 and upgraded its enterprise resource planning system to Oracle.

Haeco, whose purchase of Timco Aviation Services in 2014 sent its airframe hours vaulting, also plans to add A350 MRO capabilities. Its IT projects targeted to drive efficiencies include planning and optimization, business intelligence to insure consistent data integrity and analysis, and mobility for front-line staff.

The Cathay Pacific group accounts for one-fifth of Haeco’s airframe hours, with the rest generated by third parties. Haeco expects cabin interior work to generate the largest growth.

ST Aerospace also is expanding its interiors and VIP completion services. It has delivered 120 of 144 contracted 757 passenger-to-freighter (P-F) conversions, and expects to complete the critical design phase for an A330-200 conversion with Airbus and EFW in 2016. It will soon start providing 787 line maintenance and light checks, with base maintenance to follow by year-end.

ST Aerospace, which has global capability to service 36 widebodies, 29 narrowbodies and 24 general aviation aircraft, is setting up an MRO facility in Pensacola, Florida, for two widebodies that should open in late 2017.

Lufthansa Technik expects to open a new hangar in Puerto Rico in July that will handle five lines of heavy (C, IL and D) checks for narrowbodies. The first line is scheduled to open in July, followed by a second in November and three more through 2017. The company, which generated $4.8 billion in 2014 third-party MRO revenue across its network of 21 companies, expects its greatest growth to come from component, engine and overhaul services.

SR Technics, which produced 80% of its 1 million airframe maintenance man-hours from its Zurich hub, and 20% from Malta, plans to add 787 and Airbus A350, A330neo and A320neo airframe and component capabilities. Like Lufthansa Technik, engine maintenance and component services generate most of its MRO revenue—$1.2 billion in 2014.

Several other MROs plan to add hangars in the new future.

Aeroman, which logged 1.8 million airframe maintenance man-hours in 2014 from 12 bays in El Salvador, expects that number to climb to 2 million this year after opening a five-bay hangar in July

AFI KLM E&M, which logged a 3.4% increase in MRO revenue in 2014 over 2013, has been actively adding A350 and 787 capabilities and plans to open an aerostructures and composites workshop later this year in Paris centered around next-gen composite aircraft.

Guangzhou Aircraft Maintenance Engineering Co. (Gameco), a joint venture with China Southern Airlines as majority shareholder, already has capacity for seven widebodies (including the A380), 14 narrowbodies and three in paint simultaneously. It now plans to add a component repair center, composite repair shop and a hangar that can hold six widebodies and four narrowbodies at one time. Within the next year, Gameco also plans to open a new overhaul facility with complete plating and machining capabilities to accommodate the expected surge in demand for landing gear overhauls due to hard-time requirements, says General Manager Norbert Marx.

Over the next couple years, other new capabilities will include widebody landing gear services and improved cabin refurbishment, says Marx. Gameco also is working with partner Pacavi on an A320/A321 P-F program.

To help support this growth, Marx says Gameco upgraded its IT systems and started to use wireless devices for line and base maintenance.

In Jakarta, GMF AeroAsia plans in the second half of the year to open a 6,500-sq.-meter (69,970-sq.-ft.) hangar that can accommodate 15 narrowbody maintenance lines and one for painting. CEO Richard Budihadianto expects the MRO’s maintenance business to “double revenue in the next five years.” In 2014, GMF generated $264 million—a 14.7% increase over 2013—from its three hangars that can accommodate five lines of widebody work, plus a hangar for minor maintenance.                   

To help support this growth, GMF AeroAsia is upgrading to Swift MRO 2.0, which is integrated with an SAP enterprise resource planning system (ERP).

Flightstar Aircraft Services in Jacksonville, Florida, filled 73% of its capacity, opened a 135,000-sq.-ft. hangar in December 2014 and retrofitted a 50,000-sq.-ft. warehouse, providing  an additional 25-30% capacity, says Chief Operating Officer Tucker Morrison.

The MRO, which voluntarily participated in FAA’s Safety Management System program, also completed the “implementation of a proprietary ERP system during 2014 that allows for greater operational and financial visibility, as well as providing numerous paperless solutions such as e-non-routine task cards and customer-related reporting tools,” Morrison adds. 

Evergreen Aviation Technologies (EGAT) in Taiwan generates 27% of its airframe business from parent EVA Air and regional subsidiary UNI Air—with the rest coming from third parties. It plans to add capacity in the fourth quarter of 2016 that should generate 350,000 more man-hours annually. EGAT says its biggest growth drivers are 787 maintenance and GEnx engine repairs and, like other MROs that are adding next-gen capabilities, EGAT plans to upgrade its legacy IT system starting in the fourth quarter. Full system implementation is planned over three years.

Mexicana MRO survived the demise of its parent airline and saw its revenue increase by 78% in 2014, or $21 million over 2013. It expects to further increase revenue by $13 million this year by adding 737 MAX and A320neo services, introducing a second widebody line for major checks, expanding component repairs and increasing line maintenance at Mexico City Benito Juarez International Airport, where it hopes to get new facilities. Its new ERP system should be operating in October.

Aviation Technical Services, which CEO Matt Yerbic and a group of investors purchased from Macquarie Group in 2013, leased part of the former American Airlines base in Kansas City, Missouri, in 2014. It expects most of its airframe MRO growth to come from that facility this year. Aviation Week reported on April 16 that Air Canada is sending its 787s there for entry-into-service work.

AAR predicts airframe MRO will be relatively flat this year, but it is performing more interior modifications, landing gear overhauls and widebody maintenance. Its seventh facility—in Rockford, Illinois—is on target to open in late 2016 or early 2017.

Most major MROs use Lean, Six Sigma or Theory of Constraints to gain efficiencies, but one to highlight comes from TAP Maintenance & Engineering. It conducted a pilot project  in May 2014 involving aircraft inspections that resulted in a 30% reduction in aircraft downtime. TAP rolled out the methodology to aircraft inspections in September and by year-end, 11 aircraft—seven from TAP’s fleet—reaped the benefits. TAP reduced the downtime for its own aircraft by 21%, which resulted in 27 additional days of aircraft availability.

As MROs ramp up new capabilities and capacity, efficiencies like this—and new IT systems to make the aftermarket back end smoother—result in better operational performance. That doesn’t add man-hours, but it enhances revenue. 

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