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Heavy-MRO Specialist Aviation Technical Services Continues Diversification

ATS’s Kansas City facility, which opened in mid-2014 and complements its original heavy-check operation in Everett, Washington, and its VIP completion-focused f

MIAMI—Aviation Technical Services (ATS), pressing on with its diversification strategy, plans to have 500 employees in its newest heavy-maintenance facility by year-end as it grows its component-repair business and explores other services, including turn-key maintenance, repair and overhaul (MRO) offerings and management of operator transfers.

ATS’s Kansas City facility, which opened in mid-2014 and complements its original heavy-check operation in Everett, Washington, and its VIP completion-focused facility in Moses Lake, Washington, is “off and running,” ATS CEO Matt Yerbic told Aviation Daily at MRO Americas. Announced customers include Hawaiian Airlines, which moved its Boeing 767 heavy checks to the U.S. facility from New Zealand, and Air Canada, which sends each of its Boeing 787s to Kansas City for an entry-into-service work package.

The facility also is in the midst of a major integration program for a third customer, taking aircraft bought on the secondary market and putting them through a 120-day refurbishment that readies them for service with their new owner.

The Kansas City facility—which Yerbic notes is handling all organic growth—is expected to touch 40-50 aircraft in 2015, he says. The ramp-up in Kansas City means that ATS is generating about 65% of its revenue from airframe MRO, with engineering and component work comprising the balance.

While the new heavy-check hangar is arguably ATS’s most-visible strategic move in the last year, it is just one part of a broader strategy to position the MRO provider for growth in a stagnant market. MRO demand in North America is projected to be basically flat in the next 10 years, with the only notable growth coming in the engine and components segments. Airframe work will begin to shift to newer, less maintenance-hungry models, and predominantly composite airframes will further reduce touch-labor demand going forward. 

But the fleet size will remain substantial—second in total aircraft behind Asia-Pacific—and its MRO demand, while flat, will be sized accordingly.

ATS, cognizant of the trends, has been branching out into ancillary services. It purchased Texas Air Composites late last year, boosting its ability to service the Airbus and regional jet composite parts that are 70% of the shop’s work. The move instantly doubled ATS’s component-repair capabilities, which included a heavy Boeing-centric service offering, Yerbic noted.

ATS also is adding more full-service management options—such as lease-transfer work—that cover everything from records audits to touch-labor refurbishment. Another target is small sub-fleets or aircraft being phased out, recently appointed ATS President Brian Hirshman explained.

“Rather than tying up precious resources internally, those are good candidates to turn over to an MRO and say, ‘why don’t you handle these turn-key, including maintenance programs, records, reliability, and engineering,’” said Hirshman. “We’ve had some recent success in that area.”

While heavy-airframe maintenance is not a growth area, Yerbic is bullish on ATS’s future there as well. He notes the company is one of the few MRO providers in the world that has done significant 787 airframe work, at its Moses Lake facility. Its FAA Class 2 airframe rating, which signifies approval to work on large, primarily composite aircraft, is a rarity in North America. 

“Our heads are getting around composite materials,” he said, pointing to both the 787 work and the Texas Air Composites acquisitions. “We’re one of the only MROs that have done real work on a 787, including major modifications. We’re ready to go on the [787]. We’re doing work on it, and we have people trained to do work on it.”

Aviation Week’s Commercial Fleet Data show that North and South American carriers have ordered about 230 Boeing 787s, and most of their heavy maintenance is expected to be contracted out.

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