Ryanair COO discusses its MRO plans

Michael Hickey, chief operations officer at Ryanair, talks to James Pozzi about the low-cost carrier’s recently announced heavy maintenance facility in Poland and how its growing fleet could bring about further MRO investment.

Ryanair is to open a new €6m heavy maintenance centre at Wroclaw in March 2016. What was the thinking behind Ryanair’s decision to expand in Poland?

The overriding decision is based on the fact that we’re a growing airline set to double in size over the next eight years from a current fleet size of about 320 aircraft going above 520 aircraft. That drives a requirement to put the right infrastructure in place and we have spread our bases significantly, with 73 across Europe at present. In terms of infrastructure needed to support the operation, it makes sense for us to have a support network spread around Europe that is geographically placed to support that operation. We have a facility in Prestwick, Scotland which has been very successful since opening in 2004, and we added a second facility in Kaunas, Lithuania in January 2013 that has also worked very well. Our recent decision to locate one in Poland was very much about the support of the operation. The choice of this location is always down to a myriad of different items: availability of staff, an engineering support infrastructure, alongside an airport willing to support us as well as a strong local investment agency. With this in place, the Wroclaw facility will be a continuation of the highest standards of maintenance and safety across our operations.

The new facility will be the first in Poland able to provide C-Checks. Do you envisage a facility of this kind offering maintenance to other parties aside from Ryanair?

No, everything we’ve opened so far as just been solely for us. In terms of the efficiency of the operation, and the fact we are working on a single aircraft type — the 737 — technicians can get experience and expertise on this one particular aircraft type. Quite frankly, we’ve got a big enough operation in terms of aircraft size to keep the facility constantly busy, and if we were to ever look at third party maintenance, we only lose our focus and are subject to factors such as aircraft being brought in late and spares not being available when they need to be; all the items we control ourselves which ensure maximum efficiency in these types of facilities. If we ever looked at third party maintenance, the questions we’d have to ask ourselves is would it be justified to trade off the efficiencies that we already have from a single aircraft type operation where we’ve got all the spares in place? At the moment, it’s not.

There is also an option for future expansion at Wroclaw if necessary. Would this expansion be solely for capacity or would it incorporate other maintenance checks and capabilities?

In terms of the expansion of capabilities, that allows us to double the size of the footprint of the facility. So within that, it is really up to ourselves in terms of what mix of workshop support and other additional work we’d want to put into that. In time, when we come to make that decision, we’ll decide what’s most appropriate.

The new facility is expected to create around 150 jobs. How will Ryanair go about sourcing the necessary talent for technical roles?

We’ve already held recruitment days down in the region which has been very positively received. The people working at Wroclaw will be a mix of B1 and B2 licensed certifiers, and people who will be given specific training in aircraft maintenance who will already have an already pre-existing technical skill that we’ll then transition across to an aircraft maintenance  through the provision of classroom based and on the job training. I’m very much in favour of apprenticeship schemes, which we’ve run very successfully at our facility in Scotland since it opened in 2004, but in the start-up phase of the Polish site, the focus will be more on bringing trainees up to speed. In the first year or two, it’ll be primarily that and any apprenticeship programme would have to be introduced later.

When announced in May, you spoke of the advantage of the region’s manpower. Does Central and Eastern Europe have fewer issues around finding engineers and technicians than Western Europe?

There hasn’t really been a significant difference between the two. From our perspective, we’ve had no difficulty recruiting for any of our facilities. We are creating hi-tech, well paid jobs aligned with the most secure airline in Europe. People are quite eager to sign up and be part of that.

It’s been speculated that Ryanair is looking to further grow its maintenance capacity as the fleet expands.  Could you shed any light on other future plans for this side of the business?

Given our order pipeline, with around 180 737NG aircraft on order as well as another for the 737MAX of around 200 aircraft of 100 firm and 100 options, we are definitely going to need additional facilities. As for the actual location of these facilities, that all depends on where the airline grows to. This latest facility reflects the growth we see at the moment and to ensure we get any future locations correct and in the right places, it will be all about responding to the best locations and the growth of the airline. At the moment our focus is on Europe. Whatever happens in the future we’ll deal with when it arises.

What about the existing facilities in Scotland and Lithuania? How have these facilities progressed?

Both of these facilities have worked very well. In Scotland we started with an initial two bays in 2004, before adding another three bays around 2008. In Lithuania, we started with a single bay in 2013 before adding another a year later. When we go in and set up a facility, we like to work as closely as possible with the necessary parties to make it a success and add additional capacity. These strategies have worked very well so far.

Your low-cost rival EasyJet recently started using drones to aid aircraft inspections. Are these something Ryanair would consider using, and what other technologies are you investing in for maintenance?

Drones aren’t something we consider to be a viable or worthwhile initiative to follow up on. Our investment is focused on the facilities and the technology that supports them such as the ability of staff to get access to the real-time information on the aircraft in terms of manuals. We’ll take technology on its merits and review each item and see if it’s worthwhile. At an aircraft level, we’ve introduced electronic flight bags and we continue to introduce new items but they have to justify themselves. Technology for technology’s sake is a mistake and it needs to be evaluated and for us to make sure it is worthwhile before it is introduced.

In a competitive market, Ryanair has developed into one of the world’s most profitable airlines. But what are some of the challenges it may face in future?

I don’t see any huge challenges as such. The main challenge for us again comes back to infrastructure, which we’re working on continuously at around two to three years ahead. We’re helped by knowing what our delivery programme is for the next eight years, knowing what aircraft are coming and when so we can plan accordingly. Ryanair is in a good position bringing jobs to regions and to airports, which are welcomed with open arms. The challenge for us is to continue to make sure we have these in the right place and the right time.

Will fuel costs and the strengthening dollar prove detrimental to Ryanair? If so, how is the airline meeting this challenge?

In some way, the reduction in fuel costs has resulted in a bit of a delayed reaction for us. We have a very strong fuel hedging policy where we typically hedge 12 to 18 months out. The uplift from the reduced fuel price is a little bit out, but we’ve done a couple of things which will help us in that regard. We also have a currency hedging policy which sees the dollar hedged out at $1.37 for the next year. With the dollar being around $1.12 at present, we’re seeing significant advantages as a result of this. The real advantage in terms of fuel prices will be in 2017 when the hedging pricing that we pay is reflected of what is seen in the market today, and we can take significant advantage of that.

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