MGT Aero stated in late 2017 that it wished to develop its spares capability in some of its existing programs. How has this progressed?
Until now we’ve mostly focused on new parts in our landing gear and hydraulic activities, meaning we will typically buy new components from manufacturers and re-sell them to customer MROs and airlines. Now we are looking at bigger parts such as rotables. To drive this, MGT has a couple of partnerships with companies for tearing down aircraft, one in North America and the other in Europe. Through this partnership, we are granted access to the landing gears either as a complete shipset or individual parts. Over time, we’d like to offer this distribution service mainly to airlines.
Do you see a big opportunity for increasing airline work on larger components?
Definitely. Most airline requests to us have typically been for larger sized parts such as sliding tubes. This differs from MRO customers, which are typically attracted to using smaller parts when overhauling landing gears. A good market for these larger parts will be in Airbus family aircraft, particularly for the A320 narrowbody. Our knowledge and experience is strong on this aircraft type which is why we’ve decided to grow our parts activity. Selling new parts is one thing, but selling overall components and rotables is almost a different thing entirely as it means ensuring traceability on all the parts. As well as being the right part, having the required traceability is equally as important when proposing a component to a customer.
Last year also saw a deal signed with seating specialist Zodiac Aerospace relating to distribution of complete assembly line products for the Boeing 747 and 767. These aircraft are mature in the global fleet, with the 747 particularly seeing a string of retirements. Do you expect these services to have longevity?
The service is very fleet driven, and this meant the capability was mostly for the 767 rather than the 747, which is no longer in production and is a smaller market. It took a fair amount of time to put everything into place but over time this has developed nicely. 747s are mostly flown by cargo customers, and one of our MRO customers in Asia-Pacific is doing a lot of work on this aircraft. Customer feedback suggests there will a couple more years on the 747. Many are being torn down and sometimes it isn’t worth doing an overhaul on a 747 landing gear when there is potential on other landing gears available at cheaper prices. The focus will be on live programs such as the 767 but as long as there’s a demand for 747s, we will continue to support this.
MGT moved to a new facility in Pompano Beach, Florida in November 2017. What was the main driver of this move and how has it panned out to date?
We invested in the facility to grow capacity to 8,000 square feet, because MGT’s added value and selling point is having parts available to customers. This means growing our stock, and at our previous site in Fort Lauderdale, we’d reached capacity for stocking capabilities. At the new facility in Pompano Beach, we are expectedly far from capacity in our warehouse and having the extra space has benefited us. In terms of operations, in the past five months we’ve hired a couple of more sales and warehousing staff as planned. Since moving facilities in the U.S., our aero distribution unit has also added new approvals to become suppliers for Airbus Helicopter Inc. and Dassault Falcon Jet.
New facilities typically come with new investments in areas such as tooling, equipment and IT. Could you please share some of the investments made in these areas?
Since day one MGT has stocked parts on shelves and this is something we are looking to change at our new facility as our stock is steady enough to use other means of stocking. Right now, we are exploring ways to introduce of couple of machines to stock parts. Increasing efficiency is also a key area of improvement for us, and we’ve looked at both automatic and manual ways of increasing our workflow. Upgrading the IT system has also been integral to the organization as it’ll foster better communication between our locations in the U.S. and France. We’ve added a new member of staff to assist with this at our Florida office.