AAR did feel the need to address the shift from airline thinking to MRO thinking when hiring this many former airline people. Part of the new hire indoctrination training was an explanation of the business model differences between an MRO and an airline maintenance organization, and what it takes to be profitable as an MRO.
Plans for Duluth
Martinez says they are all very proud to see the building put back to use for what it was intended, and to see the talented people here doing what they like to do. It’s exciting for the city of Duluth, for Minnesota, and for AAR.
The long-term plan is to build up to a top-notch facility primarily dedicated to one core customer and fill the multiple check line gaps with AOG, drop-in, and modification work. They intend on keeping three to four steady check lines of maintenance going full time and appear to be on-track with this plan anticipating having three steady lines of heavy maintenance this year. AAR feels this facility has the size and the area has the talent to generate the revenue necessary to stand on its own two feet. The facility has ample space for developing any number of back shop capabilities as the need increases.
Estimates are a full complement at the Duluth facility will be approximately 250 employees. Discussions have begun with the local Air National Guard unit, Northland Community & Technical College, and Lake Superior College on ideas for programs to create the pipeline of future aircraft maintenance technicians.
AAR’s outlook for narrow body MRO
I discussed with both Danny Martinez and Chris Jessup, senior vice president sales and marketing for MRO division, what they see as industry trends and to share their outlook for narrow body maintenance in North America. Both feel there continues to be a need for narrow body heavy maintenance and modification services. Martinez says, “All the MROs seem to be busy and capacity in North America is getting filled. I talk to our competitors and other MROs in the industry and everyone is busy.”
Jessup agrees with this view and says, “The outlook remains strong and I don’t see demand going down.” Jessup adds that a significant volume is taken up in the market with modifications and upgrades. For example, across the AAR MRO network the current annualized labor run-rates are greater than 4.5 million man-hours and 30 percent of these man-hours come from modifications and upgrades, most times embedded into C-check packages.
Jessup went on to share a few more interesting points and observations. In the last 12 to 24 months more carriers are interested in developing relationships and long-term commitments to maintain a dedicated fleet or to provide an MRO with steady lines of work for years. The movement by airlines from one MRO to another chasing cost has slowed. Airline customers have always wanted a quality, reliable, on-time aircraft and still do. But today they want more. Many want a one-stop shop with engineering support, parts and material support, logistics, and component repair and overhaul. Airlines want to know how the MRO can provide detailed data and performance metrics, and look to partner with an MRO having IT systems that interface with the air carriers systems.
It appears the ability for an MRO to provide more services and manage the complex interface has become an increasingly large part of the MRO airline relationship.
Ronald Donner has spent his entire life devoted to aviation and he holds FAA certificates as an A&P/IA, and a Commercial Pilot with Single and Multi Engine Land, Instrument Airplane and Glider ratings.
This success marks a major milestone for AAR's newest aircraft maintenance facility, which commenced operations last month, and sets the stage for the company’s next phase of growth in Duluth.
AAR representatives will be in Duluth from 10 a.m. to 6 p.m. Wednesday to talk to applicants and accept resumes for managerial and leadership positions.
The Lake Charles MRO has now received its own operating certificate bringing the total number of FAA-certified AAR repair stations to 14.
Industry leader to expand support for commercial airline customer