Greg Colgan MRO Holdings

Fast 5: Greg Colgan, MRO Holdings CEO On Optimizing 60 Lines of Maintenance

Greg Colgan, MRO Holdings CEO, talked with Lee Ann Shay at MRO Americas about the company’s three facilities that will operate 60 lines of aircraft maintenance after Aeroman’s Hangar 6 in San Salvador is finished the end of this year. (Author’s note: this Fast 5 is actually six questions, but one answer is very short.)

How’s business?

Business is good. We’re fortunate that capacity at Aeroman is pretty much taken up for the remainder of the year. We’re sorting through some question marks in 2019. But the reality is that we broke ground on Hangar 6 at Aeroman. It’s approximately 128-by-128 meters, so it’s larger than our Hangar 5. We’re probably six months too late in building it. The hangar will be done in December but we probably needed it by the end of summer--we played it a little conservative. But it’s fortunate for us that demand is strong. 

How much extra capacity will Aeroman’s Hangar 6 provide?

Hangar 6 should add 1.2 million to 1.5 million additional maintenance hours, so that will bring the facility to around 4.5 million hours. Ideally, we ramp that up over three years but we think the capacity will be much earlier than that. Staffing is the lever that we’re looking at—it’s not a three-year curve. Alejandro (Echeverria, Aeroman CEO) and his team are working on being able to staff a good portion of that by Jan. 1, 2019. The demand is there and a lot of our growth is focused on widebodies. We think there is good support around the Airbus A330s still. We have four on property (as of mid-April) and we think that could go higher. We’re contemplating some Boeing 767 capabilities but then we’re starting to position for the Boeing 777 at Aeroman. I think we will be ready by 2019, but we’re working with our partners to understand what opportunities will be available.

Is the TechOps Mexico facility at capacity?

The Mexico facility is at capacity. We are thinking of expansion but we need to match up the labor and capabilities that we want to expand there. Delta and AeroMexico are great partners in that conversation and we want to make sure we’re in synch with their needs first. You would do that with any core customer. We ask all of our core customers: What do you see two to three years out. That facility is neat because we’ll be expanding it to other customers, as well. We’re in a great labor position there, as well. We have a fantastic work crew and Jess (Losada, CEO TechOps Mexico) and the team have done a great job from a culture and training standpoint, and we have a great partnership with the local universities. 

How’s Flightstar in Florida?

Flightstar is a very similar story to the rest of the U.S. market. We’re pretty frustrated by the status of the labor market. It’s extremely transient right now, which I think all of us are trying to get our heads around without just throwing money at it. How do we create a great place for people to work with a strong culture, but the current state is affecting our future plans. Given the tough labor situation, we’re trying to right size the facility given the market today—certainly in Florida but the U.S. in general. The good is that we have great partners and we have been able to weather the storm, and I think we’re in a pretty good position because of the strength of our network. We are continuing to invest first and foremost in the employees there.

I honestly don’t have any growth plans for Flightstar. The focus is maintaining a good product and good turnaround time. That’s different than last time we talked, when I told you we were thinking about adding eight lines. Given what’s happened in the last 12 months, that’s not a good decision. We want a good, solidly performing facility that fits into our network.

Besides widebodies, are you looking at additional capabilities, such as components, or joint ventures?

Yes. 

And they would be…?

Those would be fun to talk about when they’re done. A lot of people are reaching out. It’s fun to have conversations, but we are extremely focused right now on being a world class airframe provider. That has positioned us well to evaluate conversations. We have an idea of where we want to go with this but it’s all centered around operational excellence. I don’t have a goal to get bigger by X% or get into components but I think we have a critical mass that makes some of those conversations interesting.

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