The American Airlines-Rolls-Royce joint-venture (JV) engine-overhaul shop tabbed for closure in 2016 is running at about one-third capacity, and demand is sagging enough that the facility could practically handle the entire global RB211 and Trent 800 shop-visit workload, Aviation Week data suggest.
The two companies announced this week that they will shutter Texas Aero Engine Service, LLC (TAESL) early next year. The shop was set up in 1998, largely to handle American’s RB211, Trent 800 and Tay engine work. American’s Tay-powered Fokker 100s are long gone, and the carrier’s RB211-powered 757 fleet is scheduled to shrink from 106 at the end of 2014 to 61 by the end of 2015 as part of the carrier’s fleet renewal. Its 47-aircraft, Trent 800-powered Boeing 777 fleet averages 15 years of age, Aviation Week data show.
TAESL—which bills itself as the largest RB211-535 shop in the world—can handle about 300 overhauls per year. Its current figure is closer to 100, a Rolls-Royce spokesman said.
With TAESL’s top customer phasing out even more of the shop’s bread-and-butter product, the companies made the call to shutter their 50-50 JV and move its work to other Rolls-Royce facilities.
“Unfortunately, after reviewing load forecasts for the TAESL programs, Rolls-Royce has concluded that declining future volumes of overhauls for Trent 800 and RB211 will no longer support a commercially viable operation,” Simon Burr, Rolls-Royce chief operating officer for civil large engines, said.
Data from Aviation Week’s Commercial Fleet & MRO forecast shows that global demand for RB211 and Trent overhauls is expected to total about 250 shop visits in 2016, climbing to just about 300 in 2017, and topping out at 350 in 2019. From there, the figures fall again, and are expected to be below 140 in 2025. The annual average number of visits for all RB211s and Trent 800s is about 250 for the next decade, the data show, with just three years—2017-19—projecting more than 300 annual overhauls.
The majority of the demand is in RB211-535 work, the forecast shows. The 757 powerplants will have about 130 shop visits next year, and hit a high-water mark of 200 in 2019. In 2026, the figure will be around 70 shop visits.
Trent 800 overhauls will approach 60 next year, and rise steadily, to above 100 in 2017-19, before falling off. By 2025, the forecast projects fewer than 50 Trent 800 shop visits.
The most recent RB211 delivery was in 2009, Rolls figures show, and the company has delivered 77 since 2002. Trent 800 deliveries also ceased in 2009, and have totaled 234 since 2002.
The company’s civil-aftermarket revenue was up 7% in the first half of 2015, totaling about £1.8 billion ($2.8 billion), or 56% of all civil-engine revenue. RB211 revenue was down, but Rolls-Royce Holdings CFO David Smith said on the company’s first-half earnings call that the drop was attributable to older versions of the engine being parked. RB211-535 revenue was up.
American said that TAESL’s 600 American Airlines employees will be offered work elsewhere in the airline’s system, including at as-yet-unidentified “additional new maintenance opportunities in the Dallas-Fort Worth area,” according to David Seymour, the carrier’s senior vice president for Technical Operations.
Harry Lombardo, president of the Transportation Workers Union of American International (TWU) that represents about 500 of the American employees at TAESL, has said the facility’s management informed the union “mere minutes” before news of the closure went public. “We barely had time to break this news to our own members before their families read online or heard about it on television,” he added.
Lombardo said TWU officials will meet with airline executives “in the coming days,” and the union will form a committee to monitor the shop’s closure process.