What have been some of the main challenges resulting from shop demand for V2500 and CFM56 family engines?
In particular, the availability of spare parts is a concern and puts high pressure on the total supply chain. Delays in that area can lead to engine turn-around time increases. This can lead to a higher level of spares demand and a higher pricing for those spares. Early scheduling and planning of shop visit inductions jointly with our customers is imperative in the current environment--especially to proactively manage supply chain challenges. Luckily, our leasing arm, MTU Maintenance Lease Services B.V., also can support our customers with immediate solutions, such as short-term leasing or engine exchange, if required.
When do you expect LEAP and GTF overhauls to start picking up?
We are already performing GTF and LEAP shop visits within our network, the PW1100G-JM in Hannover since 2016 and we just started with the LEAP-1B in Zhuhai. However, these visits represent so-called early technical removals which are linked to introducing new engine types to the market. We expect scheduled shop visits on the GTF and LEAP around 2021 or 2022. These typically will then be repair shop visits, later on also performance restoration shop visits. We are expanding our network and increasing our capacity for those engines. EME Aero, our joint venture with Lufthansa Technik for the GTF, will induct the first engine this year and build up to a capacity of 450 engines per year. In parallel, we are expanding our facilities in Hannover and Zhuhai to cope with increasing LEAP and GTF demand. We are planning to introduce the LEAP-1A version in Zhuhai in 2020, and smaller GTF models at EME Aero from 2021.
Turnaround times in the MRO supply chain are challenging. How has MTU looked to combat these issues? Has it sought improvements in its supply chain?
Generally speaking, we approach this in two ways. First, we ensure that we follow a double source policy so as to increase our stability in cases of supply fluctuation. Furthermore, we try to repair as many parts as possible instead of replacing them, which also is more cost-efficient for the customer. Usage of used serviceable material can also positively impact TAT. Basically, we are more focused on scheduling and planning shop visits jointly with our customer to ensure a timely induction into the MTU MRO network. The earlier we engage the better prepared we are.
MTU’s shop visits exceeded 1,000 in 2017. What did they reach in 2018, and are they expected to further climb for 2019?
Our shop visits levels keep on increasing we expect to do well above 1,100 shop visits in 2019. These numbers include industrial gas turbines turboprop and turboshaft engines, as well as for business jets applications. We expect to far surpass the 1,000 mark for commercial jet engines in 2020--up from close to 800 in 2017.
MTU has been adding new capacity at sites such as Hannover and Berlin to create more space for MRO operations. Will MTU continue to go down the expansion route in order to meet demand for engines like the CFM56 and V2500, or will it consider other methods?
We are adding capacity at all locations to serve demand across our portfolio. This ranges from mature engines such as the CF6-80C2, which we are introducing in MTU Maintenance Canada alongside the recently introduced V2500, We also maintain current generation engines such as the CFM56 and V2500 at MTU Maintenance Zhuhai, for which ground was broken on the 50% expansion (to 450 shop visits p.a. in 2021) in September. In Hannover, we are adding 22,000 sq. metres of hall space. Furthermore and previously mentioned, LEAP capabilities are being introduced at MTU Maintenance Zhuhai and we are building EME Aero in Poland specifically for the geared turbofan family. Also, we are expanding Airfoil Services Sdn. Bhd. and planning a new repair site in Serbia to meet parts repair demand.