AAR is breaking into the Japanese MRO market through a new parts supply agreement with Mitsubishi Heavy Industries Aero Engines (MHIAEL). The multi-million dollar deal is AAR’s first with MHIAEL and its largest commercial deal in Japan to date.
Under the contract, AAR will serve as the parts supplier for MHIAEL’s Pratt & Whitney PW4000 engine maintenance service offerings with its customer base. AAR will supply piece part supplies for the engine type and offer capability for engine technological platform solutions from OEMs such as Unison and Eaton.
The deal follows AAR’s certification earlier this year from the Japanese Civil Aviation Bureau (JCAB) to serve Japan-based customers from its Aircraft Component Services facility in Amsterdam. According to Colin Gregory, AAR’s SVP of Asia-Pacific, JCAB approval has helped the company get into more critical component repairs in the region and has provided a stepping stone for repair business with Japanese carriers and their subsidiaries.
Although Gregory says the Japanese market has been tough to get into, the PW4000 engine itself has provided key business opportunities. “The PW4000 has been an engine that’s hard to find engine slots [for] because Lufthansa dropped its capability and moved that space into the newer-technology engines,” he says, which “kind of created a shortage.” Gregory adds that MHIAEL has seen increased business since introducing 94-in. PW4000 fan engines, which meshes well with AAR’s growing business on the PW4000 supply side.
Elsewhere in the Asia-Pacific region, AAR also supplies parts for the PW4000 in Korea. In addition, Gregory says China makes up 60% of AAR’s distribution business out of Asia and the company is growing there with a Shanghai-based supply hub that opened in 2017. The company is in the process of building a new MRO facility in India, which Gregory says is AAR’s planned maintenance hub for the Asia-Pacific region.
“Right now the focus is to build up the MRO in India, and once that’s established it is to bring all our other capabilities into that,” he says. “But it’s a step-by-step process because building a shop here in Asia-Pacific is not the easiest process.”
AAR says the India facility is expected to open by February 2020 in time for the Singapore Airshow. Initially, the facility will feature six narrowbody bays, including a painting bay. AAR and Indamer Aviation—its joint venture partner on the new MRO—are planning future expansions that will add 10 additional bays and component repair shops.