AMG-Barfield Merger Impacted By Faster-Changing Airline Fleets

AMG CEO sees synergies, better customer service for airlines and improved technical capabilities resulting from merger with Barfield, which is nearing completion.

The merger between Aero Maintenance Group (AMG) and Barfield is gathering momentum, says the new CEO of AMG, Johann Panier, who has just finished a year as CEO of sister company Barfield. AMG itself already owns three MRO subsidiaries: Precision Electronics, Aero Technologies and Air-Pro. These, as well as the AMG and Barfield brands, will all be rolled into one within the next six months.

Shortly after his appointment, Panier told Aviation Week: “We’re really excited about becoming one big MRO for the U.S. Our headquarters is working on what its brand will be, to be revealed by early 2016.” He went on to stress how the complementary skills and expertise of the component companies would allow the fully merged company to become greater than the sum of its parts.

“Our main priority for the moment is to reorganize and realign the structures of these different companies,” to gain technical capability and realize customer portfolio synergies, says Panier. “At 70 years old, Barfield is really well-established and is widely known, with strong processes. AMG is far larger and really keen on learning from Barfield. Together, they will be an excellent team, giving us both the agility and the processes when we need them,” he adds.

Air France Industries-KLM Engineering & Maintenance (AFI-KLM E&M) bought Atlanta- and Miami-based AMG in 2011, having held a majority share in the company since 2008. The merger has been underway since AFI-KLM E&M later bought Miami-based Barfield from Sabena Technics in July 2014.

“By building this big group, our intent is to be as close as possible to our customers,” explained Panier. “Within it, we have all the major companies as customers. The merger will mean they can all deal face-to-face with a single company, which will not only be more competitive for them but which will also reduce a lot of their turnaround time due to the proximity we are giving them.”

Together, the companies have six locations: Atlanta, close to Delta; Phoenix, close to US Airways/American Airlines; Louisville, Kentucky, close to UPS; and three facilities in Miami, which is the main gateway for South American airlines.

“The idea is to eventually gather all the capabilities we currently have in Miami under one roof,” says Panier. “We already have 200,000 sq. meters [2.15 million sq. ft.] across the three facilities, so you can imagine how interesting it will be to have all of that in a brand-new facility.”

Founded in 1945, Barfield specializes in component support and provides services ranging from repairs to flight-hour solutions, including spares support, test- equipment design, and spare parts distribution. The company employs 230 staff at three U.S. facilities in Miami, Phoenix, and Louisville.

AMG has an Atlanta facility that maintains and repairs electronic, electro-mechanical, hydraulic, and pneumatic instruments and accessories for regional and business fleets. Its two Miami facilities focus on support, repair and overhaul of pneumatic, hydraulic and electro-mechanical systems, as well as avionics suites, cabin and safety equipment repairs, and modifications.

The challenge, Panier admits, is how to efficiently share skills, knowledge and expertise. “We have several big projects at the moment, such as enterprise-resource planning to align the IT systems and so on; but an important part of the merger is to find out how to share the information and processes the same way within the group. We already have the structure in place and haven’t had any surprises, so it’s more a matter of aligning than inventing.”

Another difficulty is external. “The American market is changing faster than we anticipated a couple of years ago. Right now, the major airlines have money and they are changing their fleets sooner than anticipated,” so the group needs to develop capabilities for the new fleets, he says.

“Fortunately, one of our big strengths is that Europe already has a new fleet in place, so we have the knowledge from that to work on [Boeing] 787s, 737NGs, [Airbus] A350s, A380s, A320neos and so on. The new fleets also have a lot of technological changes such as in their avionics, but we have avionics in our DNA and are already innovative with it,” says Panier.

Asked what he would like to change about the aviation MRO industry, Panier admits to having a little frustration at the irregularity of the supply chain.

“It’s difficult, so you really have to adapt to the ecosystem of the market,” he says. “We need to work [more closely] with the OEMs as much as we can, in order to deliver the best service to the airlines.” 

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