When Evergreen Aviation Technologies (EGAT) and GE Aviation announced a joint venture to provide major maintenance on the GEnx engine, the Taipei-based MRO made what appears to be a sure bet on the continued success of the GE-built, widebody aircraft powerplant. The GEnx MRO joint venture, to be marketed under GE Evergreen Engine Services, was formally launched in March and is slated to have full overhaul capability by 2019. In an interview with Aviation Week, EGAT Chairman Michael Chang discusses the joint venture and other plans to grow what has been a successful boutique MRO operation since its establishment in 1998.
AW&ST: Why did GE Evergreen
Engine Services decide to focus exclusively on the GEnx?
Chang: The GEnx family is the best-selling engine in GE Aviation history, with more than 1,500 engines currently on order. Over the last two years, GE Aviation has increased production and will deliver close to 300 GEnx engines in 2014. There will be a significant need for a best-in-class overhaul shop, and GE recognized the potential of such a competitive facility in EGAT.
Will EGAT compete for GEnx maintenance globally, or mostly within the Asia/Pacific region?
GEnx maintenance services are jointly marketed by GE and EGAT through GE Evergreen Engine Services. After customers contract with GE, maintenance services are distributed to GE’s network of GEnx MRO facilities, including GE Evergreen Engine Services.
Will EGAT have to build new facilities to accommodate GEnx work?
We have no plans to build new facilities for engine overhauls. Our new hangar, scheduled for completion in mid-2016, will be used for airframe maintenance.
Are there plans to expand the joint venture to other engines?
Currently, we have no plans to extend the joint venture beyond the GEnx.
EGAT is a well-known commercial airframe MRO. Which airframes are EGAT’s specialty today, and on which new airframes will EGAT plan to develop maintenance expertise?
Boeing airframes are our specialty. Our expertise includes the 737NG, 747, 767 and 777 airframe families. Our capabilities and experience also include the Airbus A320 and A330 Airbus airframe series. In addition, we are developing our 787 airframe capabilities.
EGAT is a designated Boeing Edge program service center. Will it be doing major airframe work on the 787 and 737 MAX families?
Barring unforeseen circumstances or major changes, EGAT will handle major airframe maintenance on both 787 and 737 MAX airframes.
Does EGAT plan to expand its Airbus maintenance to include the A350 or A320neo?
We have no plans to expand EGAT’s Airbus product MRO offerings, beyond the A320 and A330.
Where do you see the most opportunities for EGAT in airframe maintenance within the next five years?
Our greatest opportunities are in our ability to deliver high-value service solutions to airframe customers. EGAT expects to be working on a steady stream of A320s, 737NGs, 747s, 767s, 777s and 787 airframes over the next five years. In addition to letter checks, we expect winglet modifications, interior and inflight entertainment system upgrades, nitrogen-inerting gas system and WIFI-installations to be prominent portions of our service menu.
Will most of your opportunities in airframe maintenance be generated by the emerging low-cost carriers in the Asia/Pacific region, or by large international carriers operating widebodies?
International carriers make up a sizeable portion of EGAT’s customer base. Low-cost carriers amount to a considerably smaller volume of business. By default, low-cost carriers focus on the lowest costs. While EGAT is highly competitive, we are not and will not be the cheapest MRO.
What are some of the challenges you face over the next five years?
Training in the aircraft MRO industry is time-consuming. It takes time to develop critical hand skillsets. We also face the challenges of a limited pool of young adults interested in entering the industry. Cost-growth pressures are also a concern. EGAT effectively manages this issue by making mechanics stakeholders in the company. The greater the company’s profit, the better our employees’ bonuses.
Are you considering any expansion of your facilities beyond Taiwan?
EGAT is a mid-sized, boutique aircraft MRO with a controlled growth projection. To ensure consistent delivery of quality services to our customers, we plan to keep our operations here in Taiwan. MRO services are labor-intensive. Understanding the workforce and effectively managing the productivity is critical to the high quality of consistent services that EGAT’s airline partners have come to expect. Any expansion outside of Taiwan would bring additional management challenges and risks.
A version of this article appears in the November 3/10 issue of Aviation Week & Space Technology.