Calling the engine service market dynamic might be an understatement, given the bulging order books for new aircraft, a bevy of used surplus material that opens up workscope options, and engines such as the V2500 and CFM56 that should generate a surge in shop visits.
“It’s a growing—and booming—market,” says Leo Koppers, MTU Maintenance senior vice president-marketing and sales. An MTU forecast predicts that from 2014-16, the fastest-growing engine programs will be the GP7000, GE90 Growth (-100B and -115B), CF34-8/-10E, and the Trent family, for which shop visits will increase at a double-digit rate. The V2500 and CFM56-5B/-7 will be the most important programs in terms of shop visits. “Except for the Trent, we entered all these platforms years ago and are now expecting to benefit from our investments,” he notes.
Koppers also reports that MTU is preparing to introduce MRO capabilities for next-generation engines such as the GEnx and the PW1000G.
Others are claiming strong growth trends, fueled by significant, ongoing investment in infrastructure and repair technology. GE Aviation Services, which did $7.8 billion worth of engine MRO business in 2013, invests $40 million annually in developing repairs.
“There is strong demand for our OnPoint risk-sharing customized service agreements, as carriers opt for next-generation engines that offer significantly better fuel efficiency, like the CFM Leap, GEnx and GE9X,” says spokesman Perry Bradley.
Rolls-Royce reports a similar trend, citing the more than 1,100 commercial airliners with Rolls-Royce power enrolled in the OEM’s TotalCare aftermarket support program, representing a 3% growth in service revenues. On the business jet side, Rolls says enrollment in the equivalent CorporateCare plan covers 1,500 aircraft, with a 70% market penetration for new Rolls-Royce-powered deliveries. Last year, Rolls-Royce’s total service revenue was £3.6 billion ($6 billion), about 54% of the £6.6 billion derived from civil aerospace.
Mark Eldred, managing director of engine and component MRO for United Technical Operations, part of United Airlines, cites engine overhauls as “a large percentage” of the company’s total commercial engine maintenance revenue, and expects to increase the number of overhauls by 10% per year. Eldred adds that about 30% of the engine MRO business volume is for third parties. “Joint ventures, particularly for engine repair and overhaul, represent major opportunities,” he notes.
Another airline-owned MRO, Delta TechOps, overhauled some 600 powerplants in 2013. Those overhauls contributed about 80% of Delta TechOps’s 2013 commercial engine maintenance revenue, says spokesman Morgan Durrant. The percentage is projected to increase in 2014, with a “significant portion” derived from third-party work, he says. The company is adding CFM34-8 MRO capability that will include increasing use of the company’s Minneapolis/St. Paul facility for engine work, focusing on increasing full engine overhauls.
At Snecma, 2013 engine MRO revenue showed a 19% increase over 2012, mainly due to more CFM56-7B, CFM56-5B and GE90 overhauls, according to Ghislaine Doukhan, vice president-material services.
“More than 80 percent of our engine maintenance business can be attributed to overhauls,” she says. “But even if overhauls continue to be the main driver for maintenance costs in coming years, data management initiatives should help to do more preventive maintenance actions on wing—and increase revenue from light maintenance events.”
AFI KLM Engineering and Maintenance serviced 500 engines in 2013, generating revenue of €1.14 billion ($1.56 billion), says Len Berrevoets, vice president-engine services KLM E&M. Of that, about 50% was from third-party work, with overhauls accounting for 85% of third-party business.
Over the next 1-2 years, AFI KLM E&M sees opportunities linked with repair development and used materials usage. The company confirms that GEnx-1B MRO capability, initially with quick-turn (minor shop visit) repairs will be available within the next 6-9 months. Major maintenance events, such as complete overhauls on the GEnx-1B, are not anticipated for at least the next 6-8 years, but Berrevoets says the company could be ready for them sooner. He adds that new repairs are being developed for other engine types, including the GP7200. The AFI KLM E&M/Bonus Aero joint venture in Miami has also started servicing the PW4000.
For 2014, Standard-
Aero expects to better the $1.6 billion of commercial engine MRO work it did last year, including 1,250 overhauls—some 70% of the company’s total engine MRO revenue. Growth opportunities include PW100 variants and PT6 turboprop families, as well as the CFM56-7B. President Rob Cords also sees growth from offering a one-stop shop for specific airframe main-thrust engines, bundled with APU and LRU work.
Maximizing use of life-limited parts on engines nearing retirement is giving rise to custom work scopes. This means -StandardAero is constantly developing new repair technologies, along with module swaps and flexible approaches to avoid component replacements and reduce major shop visits.
Engine service providers are reacting to changing market dynamics as customers seek more creative, cost efficient approaches to asset MRO.
This evolution, according to Amy Gowder, vice president and general manager, Lockheed Martin Commercial Engine Solutions (LMCES), is due to operators’ changing views on engine maintenance plans, coupled with a continued positive view on serviceable used material. “LMCES is partnering with our clients to adjust their maintenance plans, based on their new requirements,” Gowder notes. To do that, she explains, LMCES has significantly upgraded its repair technology and engine life-cycle management processes, aligning its engineering expertise and internal repair capability with the OEMs and used material providers to reduce operating and overhaul costs.
Used serviceable material is becoming more available for engine repairs as the market for new engines continues to grow and older ones are phased out. A typical example, cited by MTU’s Leo Koppers is the CFM56-3, which powers the rapidly retiring 737 Classics.
“From an MRO perspective,” says Koppers, “the availability of surplus material gives us the ability to offer customers alternative cost-effective solutions, but also to gain access to fleets that have been under OEM coverage.” This market development, he reports, has drawn increasing customer interest for asset and material management solutions that optimize engine values at the end of the life cycle.
MTU is also seeing growing demand for on-wing services. “Newer engine models have been designed so that a variety of on-wing repairs, such as compressor blade boro-blending are now increasingly feasible,” Koppers explains.
On-wing/on-site support and end-of-life MRO asset management concepts also are seen as major opportunities by Lufthansa Technik (LHT). “This is where LHT steps in with its end-of-life product that offers a customized solution for the remaining life cycle, which leads to a significant reduction of the number and costs of remaining shop visits,” says Thomas Boettger, director-customer service, engine services.
Pratt & Whitney expects more migration to long-term aftermarket support contracts with OEMs. The OEM claims 50% market penetration on such agreements covering the PW2000, PW4000 and V2500, according to Kip Wyman, vice president-aftermarket operations. The penetration rate is already 80% for the PW1100G-JM geared turbofan engine, due for entry into service on the Airbus A320NEO in late 2015. Wyman says operators of the V2500 are showing strong interest in Pure-V, a total support package launched in November 2013 for that engine family.
Sibling Pratt & Whitney Canada is investing in technology for next-generation regional turboprops, targeting 30% lower maintenance costs, and 20% better fuel burn than current production turboprop engines, says Jackie Khougaz, director-commercial services and support.
In the Asia-Pacific region, Hong Kong Aero Engine Services Ltd. (Haesl) expects to increase its broad component repair capability, volume and range of engine types over the next few years, reports Summit Chan, group director commercial. A Rolls-Royce-accredited, Gold Level Center of Excellence, Haesl anticipates expanding repair and overhaul activity on the Trent 700, given robust sales of the Airbus A330 in the region.
By 2015, Haesl expects to have Trent XWB repair capability. Anticipating a large volume of work on the engine, which powers the Airbus A350—and to accommodate the tooling and larger size—Chan says a 140,000 sq. ft. building will be added by 2016.
Overhauls, now about 63% of Haesl’s engine maintenance volume, are predicted to increase as Trent engines mature and life on wing is extended. Capabilities for on-wing services are being added for a range of engines, including the Rolls-Royce RB211 and Trent; the GE90, CFM56 and IAE V2500.
Taikoo Engine Services Xiamen Company Ltd. (TEXL)—majority owned by Haeco—is gradually adding GE90 component repair capabilities, driven by the Boeing 777’s popularity with Asian carriers. TEXL will be growing its performance restoration, quick turns and component repairs in 2014.
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EDITOR'S NOTE: A table that originally accompanied this article was removed because it contained inaccurate data.