In an increasingly crowded and competitive aftermarket comprised of airline-affiliated MROs and the advancing service divisions of OEMs, independent maintenance providers are having to be more resolute in finding ways to retain and expand their market share. Nevertheless, in an industry that Aviation Week’s 2017 Fleet and MRO Forecast predicts will generate revenue in excess of $100 billion globally by 2026, the expanding global aircraft fleet indicates strong customer demand. But those who follow the MRO industry suggest many independents operating today find themselves doing so in a time of relative prosperity.
Jonathan Berger, managing director at New York-based consultancy Alton Aviation, says in the past few years independent aftermarket providers have benefited in terms of stability and profitability from the regular influx of work from airlines and lessors. “Previous reports of the death of the independent MROs have been greatly exaggerated,” Berger tells Inside MRO. He says that the relative stability and healthy financial state of independent MRO providers has led to some consolidation in the form of merger and acquisition activity, with investors such as private equity firms snapping up these companies.
Among those thriving as an independent operator is AAR. As one of the industry’s largest independent players, posting a 4% year-on-year sales jump to $1.77 billion in July 2017, the company operates five airframe maintenance facilities in North America and three component-repair shops, including a landing gear facility. According to Dany Kleiman, its group vice president for MRO services, AAR’s standalone status gives it a greater level of operational autonomy.
“Operating as an independent MRO allows us to serve almost every platform and cater to a wider variety of customers—from low-fare, narrow-body regional airlines to widebody intercontinental carriers,” he says. This view is shared by another independent company, France’s Sabena technics. Philippe Rochet, chief operating officer of the Paris aftermarket specialist, which services airframes and engines in both the commercial and military segments, says: “Not being affiliated with an OEM or an airline allows us to reach all types of customers without any competition concerns.”
When approaching the next era of the commercial MRO industry, one of the recurring words heard from independents is flexibility. “With new-generation aircraft and the new technologies that they bring with them, we have to adapt and be flexible,” says Sabena Technics’ Rochet. He expects Sabena to keep doing this and believes the company has shown a good track record of keeping up with both OEM and airline needs. “We learned how to constantly come up with new solutions, and improve our technologies and operation processes in order to remain competitive,” he adds.
Looking ahead, Berger foresees more independents partnering with OEMs on total support programs—demonstrated this year by the example of Estonian independent Magnetic MRO becoming part of Boeing’s GoldCare network. He also points to specialized areas of the modifications segment—such as passenger-to-freighter conversions, cabin interiors and in-flight connectivity work—as potential sweet spots for independent providers.
Meanwhile, AAR’s Kleiman suggests a similar path to that of AJW, embracing technology as a means of leveling the playing field with its larger competitors, along with a select list of other aims. “We will continue to focus on developing innovative digital tools to enhance customer access and service,” he says. “This will mean continuing to improve our execution, enhancing quality and safety, aggressive recruitment of skilled technicians and leveraging our wide range of services.”