Steady Growth, Consolidation Characterize Business Aircraft MRO Market

April 20, 2018
Such is the consensus of nine geographically diverse business aircraft maintenance leaders.

Steady, although not spectacular, growth characterizes the global business jet MRO market over the ensuing five years — all the while, the industry steadies itself to adapt to the seemingly irresistible gravitational pull exerted by continuing consolidation. Such is the consensus of nine geographically diverse business aircraft maintenance leaders.

“From our perspective, we see expanding opportunities and expect more growth in the new and pre-owned business jet segment as the global economy continues to grow stronger,” says United Kingdom-based Mark Winzar, vice president of technical services for JSSI. “Maintenance activity will grow but owners and operators will need to engage in careful planning, management, and execution, as MRO resources continue to consolidate.”

“The business aviation maintenance market is inextricably linked to the health of the industry at large,” says Jean-Christophe Gallagher, Bombardier Business Aircraft’s vice president and general manager of customer experience. “We expect the business aviation market to remain stable in 2018 in terms of deliveries, and in the longer term, the industry is poised for growth. This is a positive signal for the maintenance market: economic growth underpins increases in flight hours.”

The same dynamic is driving Bombardier’s archrival. “The continued growth of our fleet — now at more than 2,800 aircraft — and increased flight hours in 2017 — kept us busy throughout the year,” says Derek Zimmerman, president of Gulfstream Product Support. "That level of activity has continued into 2018.” Gulfstream sports 11 company-owned service centers worldwide — eight in the United States and three international. Its maintenance base at Beijing Capital International Airport is a joint venture with HNA Technic. The company played the important China Card relatively early on, opening the joint venture operation in 2012 as China’s first factory-owned service center for business jets.

Contributing to this growth, says Nuremberg, Germany-based FAI Aviation Group Chairman Siegfried Axtmann, is “an increase in demand for major projects from general aviation operators and business jet owners. These projects typically combine scheduled base maintenance with interior and exterior refurbishment along with avionics upgrades (to have aircraft 2020-ready) and the replacement of mature cabin management, entertainment, and communication-systems."

“From our perspective, it’s growing,” says Kirya Shortt, senior vice president of Textron Aviation Service. “Throughout 2017, we saw a steady rise in flight activity both domestically and internationally, which is translating into increased activity and growth throughout our aftermarket business.”

A number of factors are influencing this growth. Canadian-based Flying Colours Executive Vice President Sean Gillespie believes being a Bombardier Approved Service Center is a strong driver of business. This can stimulate owners “to use us for maintenance on their Bombardier jets,” says Gillespie. “The Global model fleet is coming up to its first 120-month (8C) checks so we are busy with these inspections. We have enough of them going through the hangars that we have dedicated time and money to training our team and investing in our infrastructure with a custom-made tail-dock, to be ready to meet the demand.”

OEM Alliances a Must?

Here’s that gravitational pull we alluded to. It emanates largely from the OEMs. Partnering with the original equipment manufacturer is increasingly the prudent course for many an independent MRO.

Aviation MRO requires a constant update in the use and maintenance of new technologies. That, of course, isn’t new. The change is that now, and more and more in the future, the MROs will be very restricted if they are not working in partnership agreement with the OEMs. So assert Nicolas Tejera and Ronnie McCrae, director of maintenance and third-party manager respectively for Falcon Engineering. The division of Falcon Aviation Services is based in Abu Dhabi.

Tejera and McCrae believe OEMs now realize that it's better for them to maintain the link with the aircraft even longer after it has been delivered to the owner. So cooperation between OEMs, MROs, and the authorities is key.

JSSI’s Winzar reiterates, “The MRO market is consolidating; it’s becoming more challenging than ever for independent facilities to be competitive. Key drivers include OEMs' control over authorizations and parts supply, selecting the right facility to complete maintenance.” Partnerships are one way to stay independent while attracting new business."

“We’ve seen a lot of consolidation at the highest level of aviation with large conglomerates merging or acquiring each other,” says Flying Colours’ Gillespie. A classic case-in-point is Rockwell Collins and BE Aerospace. He foresees M&A trickling down to the smaller maintenance companies and alliances formed to strengthen their global presence.

ExecuJet Executive Vice President for MRO Services Graeme Duckworth puts the trend in global perspective: “In view of the increasing reliability of business aircraft, together with longer intervals between inspections, longer warranty periods, and manufacturers’ power-by-the-hour programs, business aviation maintenance relies more than ever on the relationships between MRO facilities and manufacturers. Whilst the barriers to entry for newcomers are high, which in some cases reduces the competition; longer-range aircraft have many choices for maintenance. This is because many competing facilities are within nonstop range, thus motivating all facilities to provide service excellence at competitive pricing in order to be able to compete. For these aircraft, business aviation maintenance has become a truly global business.”

Amidst all this global growth and high-flying business jets there’s still room for the savvy regional player. Oriens Maintenance Services is the newly established arm of Oriens Aviation, the authorized Pilatus Center for the British Isles. Maintaining the single-engine propjet PC-12 is the prime focus at Oriens’ Biggin Hill base. “There is some very exciting growth within the sector at the moment,” says Dave Plumpton, Oriens’ director of maintenance. This mirrors an overall 4.3 percent uptick in business aviation growth in the UK during 2017, and 5.5 percent in Europe. Despite Brexit, “Business aviation growth in 2017 in the UK was well ahead of GDP growth and never has there been as much optimism as there is now,” he contends.

That optimism is tempered by parts availability says JSSI’s Winzar for independents. “MRO consolidation and access to parts will continue to present challenges. Selecting the right facility and taking a more proactive approach to planning scheduled maintenance will be a key factor in managing maintenance costs,” says Winzar. Understanding parts requirements and having options for supply is important too.

Challenges on the Road Ahead

If parts supply is important, attracting, training, and hanging on to technicians is critical — be the MRO an indy or factory operation. Oriens’ Plumpton says the industrywide challenge is prompting his company to look for alternative solutions to the traditional recruitment options. “We have concentrated hard on developing our internal skills base, while also looking to recruit at various levels within the skills requirements. The internal motivation associated with personal development has already shown significant motivation benefits” — benefits which he says prompt staff buy-in and ultimately generate more efficient ways of maintaining aircraft. 

The internal nurturing of technical talent is also espoused by FAI Aviation Group. That doesn’t mean, however, that the company won’t recruit from outside. Chairman Axtmann says, “We undertake in-house training and also seek to hire staff from neighboring countries, where the increase of demand for such MRO services is not increasing in the same proportion as is the case in Germany.“

Tilling the soil for the cultivation of future airframe and powerplant technicians can’t start early enough. Textron is focusing its efforts far downstream, concentrating on promoting STEM (science, technology, engineering, and mathematics) efforts and partnerships with a range of local  schools — not merely high schools and vocational schools but with elementary and middle schools as well.

The recruitment and retention problem is solvable, but not immediately so. The wild card is automation. The hangar floor just could be a future habitat for robots believes ExecuJet’s Duckworth. “Although hard to imagine within the industry at present, the advances in robotics, in particular the use of drones and other remote-controlled devices, is very likely to impact our industry going forward. This will have the benefit of lowering ownership costs and downtimes — desired efficiencies for most businesses.” There are, however, a couple of caveats. “[The] downside is that the capital expense for the MRO facilities will be high, with potentially lower returns, and it will inhibit employment levels because work would be carried out by machines. The latter is a global challenge as we strive for efficiencies in a world with an ever-increasing population.”

The feedstock for robotics is data — lots and lots of data. Gulfstream’s Zimmerman says, “One change well underway is the increased use of augmented and virtual reality systems in maintenance organizations, including ours … Another is figuring out the best way to utilize and share the value from the huge amount of data generated by new aircraft technologies."

Keeping the Customer Satisfied

The importance of alliances only works insofar as it serves the end user — the business aircraft owners and operators. The sine qua non of business aircraft MRO continues to be customer service. Those who confuse pure size as a substitute for intensive, customer-centric service do so at their peril.

“Over the past few years, we have expanded across our entire network to move closer to our customers around the world," says Bombardier’s Gallagher. “We have added a dozen mobile response team vehicles worldwide, six more line maintenance stations in Europe, and new service centers and capabilities in North America, Europe, and Asia. We expanded our Biggin Hill Service Center with an additional hangar less than a year since its inauguration; we opened our Tianjin Service Center and received numerous certifications; and we expanded our Tucson Service Center’s interior capabilities with a brand new paint shop and new tooling.”

Investment in the MRO product is critical. Consider what Gulfstream is doing. "In October 2017, we announced that we would construct a nearly 70,000-square-foot/6,503-square-meter service center in Van Nuys, CA,” says the airframer’s Zimmerman. "In February 2018, we announced that we would build a nearly 180,000-square-foot/16,723-square-meter service center at our maintenance and completions site in Appleton, WI.” Operations at both new facilities are expected to begin in 2019.

Although global reach is requisite, customer service is especially important for players such as Oriens Maintenance Services, whose core business is the care and feeding of the Pilatus PC-12. “We’ve found that our … customers have varying requirements,” says the MRO’s Plumpton. “We’re learning this and developing processes that allow us to cater to each customer in a unique way.”

Perhaps the biggest challenge maintenance, repair and overhaul faces today is precisely that: catering to customers in a unique way, while ever extending its global reach at the same time.

Early evidence is the two are not mutually exclusive.

About the Author

Ronald Donner | Aviation Consultant | AMT

Ronald (Ron) 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. Ron has worked in a variety of maintenance related roles, both technical and management in general aviation as well as with a major airline. Ron was the recipient of the 2012 National Air Transportation Association (NATA) Aviation Journalism award.  

Contact: Ron Donner

Chief Editor | Aircraft Maintenance Technology

[email protected]


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