When management of the MRO division of Sabena Technics decided to buy the entity from France’s TAT Group mid-2014, many observers doubted the long-term viability of the move. The company had posted losses for eight consecutive years in spite of cost-cutting programs, there was no dedicated sales team, and there had been a chronic lack of investment.
One year on, Stephane Burton, who led the management buy-out (MBO) and is the principal shareholder, is pleased with the venture. He rebranded the company as Sabena Aerospace and repositioned the business from being a wannabe global MRO—struggling to compete with much larger counterparts such as Air France Industries KLM Engineering and Maintenance, and Lufthansa Technik—to a niche player focusing on six or seven areas of activity. In the process, the company returned to profitability on an operating level.
“Maintenance, repair and overhaul is a difficult market and it has been challenging, but I’m happy I did pursue the MBO and I’m happy with what we have achieved so far. We have passed the one-year mark as an independent MRO and we have several new projects,” Burton tells Aviation Week. He intends to open up the company’s capital to other investors in three years’ time.
Relations with the former owner are good, Burton says, and the lines of activity well-defined. Burton is part of the TAT board and TAT CEO Rodolphe Marchais sits on the Sabena Aerospace board. The parties agreed not to compete for work in each other’s markets for three years. That means Sabena Aerospace will not launch MRO services for regional aircraft, and TAT will continue providing support for military aircraft in France, but will leave this market in the Benelux countries to Sabena Aerospace. TAT has also committed not to engage in line maintenance activities in Africa.
TAT Group is maintaining the Sabena technics brand—TAT bought the maintenance department of the former Belgian national airline in 2005, and later adopted the Sabena technics brand for its MRO division—but Burton says he’s not afraid of potential brand confusion. “We’re not active in the same segments as TAT,” he asserts, noting that he wanted to break with the Sabena technics name, which he believes is tainted by past financial difficulties, but retain the Sabena identity. “We’re proud of the Sabena history and know-how. Of special significance is the fact that we are targeting to strengthen our position in Africa, where Sabena used to have a strong presence and still is associated with quality,” he says. “We want to set up a network of line maintenance in Africa, a continent that will see strong growth in coming years and require support in the area of certified maintenance.”
In July, Brussels-based Sabena Aerospace accomplished another step in this international growth strategy for Africa, concluding an agreement with ECAir Equatorial Congo Airlines to create a joint venture to offer maintenance services to European Aviation Safety Agency (EASA) standards in the Republic of the Congo.
The joint venture, called [email protected] (for sabenaaerospace@ecair), will be majority-controlled by the Belgian MRO provider, which is EASA Part 145 and Part 147 certified. Sabena Aerospace also has FAR 145 certification from the FAA, and it is in the process of gaining EASA Part 21 J & G approvals.
Sabena Aerospace will own 51% of the joint venture and handle the operational management, to facilitate the implementation of its technical expertise and guarantee that EASA standards are met. ECAir is the Republic of Congo’s national airline and it is—like all airlines in the country—on the list of air carriers banned from operating in the European Union (EU) because it does not meet the regulatory oversight standards of the EU.
EASA-standard maintenance operations will be offered in Brazzaville’s Maya-Maya Airport starting this autumn, with line maintenance (up to A checks or the equivalent) and a wheels and brakes and small-equipment maintenance workshop. Sabena Aerospace will provide the tooling and know-how, and also train local technicians. The aim is to gradually develop a workforce through the training and recruitment of local technicians. “A lot of the success of [email protected] will depend on building local knowledge and expertise,” Burton says. “We want to train and teach them up to the EASA Part 66 license level.” The first five technicians could start their training this year and a further 10 next year.
In addition, a new hangar will be built in 2017. The hangar will be able to accommodate all types of narrow- and widebody aircraft, including the Boeing 787, of which ECAir has two on order. The first long-range, mid-size twinjet is scheduled to be delivered to ECAir in the first half of 2016; the second is due to follow in the second half of the year.
For ECAir, this maintenance joint venture is part of “the overriding objective to develop a civil aviation industry in our country, but also in Central Africa, meeting the highest quality and safety standards,” CEO Fatima Beyina-Moussa says. ECAir was created in 2011 with the assistance of Lufthansa Consulting, and operates all its aircraft under an ACMI contract with Switzerland’s PrivatAir and the Belgian TUI Group airline subsidiary Jetairfly.
Brazzaville will be Sabena Aerospace’s third line-maintenance station in sub-Saharan Africa and its second new one since the buyout. Sabena Aerospace set up a new subsidiary and line maintenance station in Kinshasa, Democratic Republic of the Congo in October 2014, and the base has been EASA-approved since Nov. 1. Customers include Air France, Turkish Airlines and Air Cote d’Ivoire. The Belgian MRO provider also operates a line maintenance station in Dar Es Salaam, Tanzania, where it supports FastJet’s Airbus A319 operations. A small facility is due to open in the beginning of September at Harare airport, Zimbabwe, also to support FastJet.
The Brazzaville-based joint venture is aiming to generate at least half of its revenue supporting ECAir aircraft, and the other half by supporting other local operators or international airlines in transit. “We are discussing this with two third-party customers, of which one operates Airbus A330/ A340s to the airport,” Burton says. There is a potential of supporting about 60 flights per week at Maya-Maya Airport, not taking into account ECAir flights.
Sabena Aerospace conducted an assessment of 50 airports in Africa, of which it has selected 30. “We target to have a presence at 10 airports in sub-Sahara Africa in the next four years,” Burton says.
The provision of line maintenance at Belgian and African airports and support for military and state operators (in particular, maintenance of Lockheed C-130 cargo aircraft) each account for about 20% of Sabena Aerospace’s revenue. Its other MRO activities include overhaul and repair of aircraft structures, wheel and brake maintenance, and all kinds of specialized support such as NDT, laboratory testing, LSE, batteries, and tubing. A new activity is aircraft leasing services to support lessors and airlines; a first contract with an operator has been signed to help with the pre-contract technical needs and the phase-in of the leased aircraft, says Burton.
Sabena Aerospace is also aiming to extend its expertise in the design and development of onboard integrated medical units for the evacuation of injured military personnel using civil aircraft.