Selecting the right MRO
Maintenance houses offer a wide range of capabilities. Choice can be difficult but good service relationships are worth the effort.
By Doug Wilson
Dir Business Devt & Mktg, Galvin Flying Services
With cowling removed, a Dassault Falcon 2000's PW308C engine undergoes inspection. Duncan Aviation holds service center authorizations for the PW300 series and CFE738 at its LNK (Lincoln NE) and BTL (Battle Creek MI) locations.
While there are many litmus tests of the aviation industry's overall health —student pilot starts, piston or turbine aircraft deliveries, announcements of new aircraft—there may be none so consistent or accurate as those of the maintenance, repair and overhaul (MRO) businesses.
During the recent NBAA convention in Las Vegas NV, we took the opportunity to sit down with a random sampling of MROs, to check the pulse of those companies that keep business aircraft in the air.
The findings are overwhelmingly positive compared with previous years and, while the study is admittedly less than scientific in nature, its findings point to an industry on the rebound.
MRO facilities are expanding the number of days on backlog for work, and spending on discretionary maintenance items—paint, interiors, certain avionics—is on the rise. Pre-buy inspections—perhaps the biggest single indicator of the aircraft transactional market—have largely returned.
Duncan Aviation LNK (Lincoln NE) VP Service Sales John Slieter describes the feeling at both Duncan and many other MROs the past 2 years.
"These days," he says, "I think we all gauge our business on the crash of 2009. For the MRO industry, 2010 was a real rebuilding year, and for Duncan, we finally saw our maintenance business come back to capacity in late 2010.
Duncan Aviation VP Service Sales John Slieter is optimistic about MRO business so far this year. In particular, Duncan has seen some return of discretionary maintenance business.
The main difference in 2011 is that we've finally seen the discretionary maintenance work return—and that means our customers are flying again."
He continues, "In 2010, people were healing. By 2011 they had the confidence to start reinvesting in the aircraft. This year has seen the resurgence of interior work and painting—items that got deferred."
Slieter also notes that the number of days of backlog for maintenance work—one measure of demand—has increased. "We're not quite back to 2008 numbers," he admits, "but in general it's better.
Backlogs are a mixed blessing—we love having them, as it lets us breathe a little easier, but it's harder for our customers. On average, I'd say we're in the 30-day-backlog category. That said, some paint and interior businesses are backlogged into December or January now."
Most recently, Duncan Aviation's newest facility, at PVU (Provo UT), celebrated its 1st year in operation.
Originally slated to be a very large maintenance base for Duncan, the economy had other plans and the scope of the facility was scaled down accordingly on opening. Says Slieter, "At Provo we've got a small team of 25 people in a nice facility [where] we specialize in Challengers and Learjets, Embraer aircraft and interestingly, Astras.
One of our team leaders [who] went to our Provo location is an Astra expert, and we've been pleased to see operators of these aircraft—particularly in the northwestern US—have followed him."
There is an interesting and well documented correlation in the MRO business which demonstrates loyalty. It is as company specific as it is individually specific. A favorite shop, or a particular mechanic, can make all the difference in customer confidence and in turn create a long-term relationship.
StandardAero's Fast Lane
Standard Aero Business Aviation VP Strategy, Business Dev & Product Mgmt Mark McGowan points to an increase in pre-buy activity as one bellwether of MRO industry health.
StandardAero VP Strategy, Business Development & Product Management Mark McGowan notes that the company's pre-buy activity and RFQs are both on the rise. "We're seeing a little upswing in pre-buy activity," he says. "The economy drives our business, and airframe quote activity is at an all-time high for us right now, as are engines."
McGowan also notes that avionics and interiors, "although a discretionary spending item, are still pretty strong." StandardAero specializes in Dassault Falcon products, Hawker aircraft and Bombardier Global Express and Challenger models.
Says McGowan, "Falcon aircraft are seeing an all-time high of C checks, which are 6-year checks, and more of those coming due.
We see that trend continuing, largely because of the manufacturing cycles—the rate [at which] the aircraft were being produced at that time."
Nordam Group employee positions an aft-center body in a vacuum brazing furnace.
Like many MROs, StandardAero has mobile maintenance support teams throughout the US. However, another rapid-turn type program that McGowan points to is something quite special, and not AOG related.
Under its "Fast Lane" program, StandardAero has been able to create a 12-day turn on a core zone inspection (CZI), as opposed to the typical 28-day industry average on turbines.
Fast Lane was developed by StandardAero's LAX-based engine team, which recently did an overhaul in a mere 6 days.
"We do logbook research [and] identify the parts that may be needed in advance," he says. "We've worked out agreements with those suppliers [where] we can get the parts we might need for the CZI—whether we need them or not—and then send them back if they're not needed.
The cost savings on the Fast Lane program for an operator who would typically have to 'hang' a loaner engine for 28 days is $40,000 in rental engines alone."