Chris Dare, managing director and chief information officer of Monarch Aircraft Engineering (MAEL), spoke to James Pozzi at MRO Europe about the future plans of the UK-based MRO.
Monarch Airlines was the recipient of a £165m ($201m) investment from its main shareholder Greybull Capital earlier this month. How significant is this investment for the engineering and maintenance business?
For us [MAEL] it delivers a lot more certainty in terms of in-house revenue and the work we will get through the airline. It gives the airline the funding to continue its growth strategy over the next five years which has been in place for the past 18 months which will also drive incremental work through us as well.
What’s the current ratio split of MAEL’s work between Monarch Airlines and third-party customers?
At the moment it’s around a 50-50 split between Monarch and third-party customers, but this will increase slightly in the coming years as the airline goes through its fleet renewal. To ramp up for this, we’ve put in a new lease team who will be taking care of aircraft handbacks specifically in engineering. We will focus on Monarch to start with before exploring other opportunities for that. We will work with the lessor to agree what a return will look like – creating a new business strength going forward. Announcements for a new team of around 15 people are expected in the next month and it should be in place by January 2017 based out of Luton. MAEL has an engineering strategy looking beyond just Monarch work to third-party work. I’m fully expecting to open a new UK-based line station either this year or certainly in the next 12 months. There could possibly be another, with the second more likely to be overseas. There’s a couple of potential destinations we are assessing, but we are being strategic about this and seeing who else is operating in those markets.
In recent years MAEL has added a number of new capabilities to its portfolio, including A350 and A380 line maintenance. Where do you see the business heading in terms of future approvals and capabilities?
We have such a broad spread of approvals already, and I don’t want to dilute these too much unless there’s a real core business need. My view is we’ve probably reached about 90 per cent of the approvals we need. Now it’s about using the investment we’ve got through the business to strengthen the depth of our footprint.
What technologies have you focused on for other parts of the business such as IT and training?
We’re going through an upgrade of our AMOS system worth nearly three quarters of a million pounds. We’ll be also reviewing electronic approvals and doing some trials of technology for line maintenance engineers. This is intended to speed up their time when they are out looking at aircraft and also give them the technology to look at things out in the field rather than returning to base. In terms of training, we have our training academy which is due for another intake of apprentices this year. 12 apprentices graduated last year from the fourth year. My expectation is that we will increase the number of apprentices – probably double it – in the next 18 months because of the shortage of engineers across the market. I don’t believe doubling it will take care of our requirements in five to six years’ time – there will likely be a bigger hole. The skills gap is definitely something both MAEL and the wider industry need to look at.
Has the UK voting to leave the European Union last June had an adverse effect on business in the past four months?
While it’s no secret that airline businesses have seen prices in areas such as fuel and leasing effected by the weakened pound, from an engineering perspective, it’s probably made us slightly more competitive. This is because we are basing ourselves on a weaker pound. However, over time, I believe this will balance itself out and will reach an equilibrium. Right now we certainly aren’t seeing this as a negative position.