It has been a 15-year path for what was once a maintenance department of Estonian Air in 1995 to become what it is today, Magnetic MRO. In 2002, the maintenance department was separated from Estonian Air, becoming Maersk Air Maintenance Estonia, a company owned by Maersk Air. In 2003, the company was acquired by SAS Group and changed its name to Air Maintenance Estonia. Come to 2010, the company was bought by private equity and venture capital investor Baltcap and was renamed Magnetic MRO in 2014. Then, 2018 saw Magnetic MRO acquired by Guangzhou Hangxin Aviation Technology from BaltCap.
Throughout, the culture of Magnetic MRO has remained people-oriented, said Jan Kotka, chief operations officer of Magnetic MRO.
“A company is its people, people are the company,” Kotka said. “We are expanding. Prior to the virus and, on average, we have around 650 (if to add the whole group, otherwise correct) Magnetic people worldwide. People are part of our business DNA — together with a mission to reinvent existing business models and deliver superior customer experience to the global MRO industry.”
Serving both airlines and asset owners, Kotka called Magnetic MRO a “one-stop-shop.”
“We have more than 15 various businesses that we run, with different dynamics and its own challenges to manage in more than 36 locations to operate around the world,” said Kotka. “We see the need for line and base maintenance to continue, we see increasing demand for redeliveries related maintenance and engineering support, we see that a lot of assets are changing and will change ownership, where our asset management teams can be involved.”
In the past years, Magnetic MRO has been investing in technology and ERP developments, allowing for greater control and efficiency in their global operations and better business transparency, said Kotka. In that vein, Magnetic has developed, for example, a fingerprint signature solution, which helps to electronically manage thousands of task cards and work order signatures during heavy maintenance projects. Magnetic also invested in the 3D scanning tool FreeScan X7, to scan aircraft parts and fuselage.
“It is an ultra-portable, handheld 3D laser scanner with a flexible and convenient scanning mode, providing high accuracy and stability and covering all the depth and thickness measurements. We have been developing further our 3D printing capabilities for spare aircraft parts. Products printed, for example, include tray table latches or armrest covers,” Kotka described.
Kotka added that the company has been building up their engine maintenance service unit, having bought engine line maintenance tooling and providing training for the team to expand its services this year.
“One of the things that makes us unique is our mission to reinvent existing business models and deliver a superior customer experience to the global MRO industry,” Kotka said. “We are also unique because we’re still that same team of bright-eyed aviation specialists with a passion for those big steel birds. We care. We care about our global family, our customers, partners and the industry that we’re all a part of. We care enough to keep pushing the boundaries of not only our own domain, but the whole aviation industry. After all, we are in this for the long run.”
The company at large has been going through changes, as well, in the past couple of years. In 2018, Magnetic was acquired by Hangxin Aviation Technology and at the beginning of 2019, Magnetic acquired a Dutch-based line maintenance company called Direct Maintenance with several locations in Europe and East Africa. Also in 2019, Magnetic opened spare parts trading expansions in Kuala Lumpur, Malaysia and expanded operations in Vilnius, Lithuania, as well as establishing a logistics location in Warsaw.
“All these changes, integrations, expansions, setting up of new businesses and related processes have been keeping us busy and our hands full with many positive challenges,” said Kotka.
Like many throughout the aviation industry, Magnetic MRO is feeling the weight of the COVID-19 pandemic.
“Rarely there will be an industry or region that will be untouched from COVID-19. Several industries, including aviation, were the very first ones to get impacted and very directly,” said Kotka. “Looking every day at aircrafts standing parked at Tallinn Airport and listening to the unusual silence of an airport describes the situation in aviation.
“Luckily our business is quite diversified, we have more than 15 different business areas and have work locations and maintenance stations in Europe and Africa, but also directly and through our owners in Asia. Many areas are negatively hit already; however, the main business areas are still running, although on a lower scale. However, some business areas are continuing to run on the same level and one even making all-time records. All in all, in our worst-case scenario, we are considering almost half less business revenue than estimated, which means that the year will be tough and downscaling of business and cost will be needed at least for this year.”
Kotka continued, saying the crisis will show if Magnetic MROs business model has been “well chosen” and if the company’s “heavy work” has paid off, adding he believes their diversification will act as a risk mitigation.
“COVID-19 has impacted us immediately,” Kotka continued. “There is work still available in hangars; however, we see reductions from April through May onwards and summer looks really soft. Also, as airlines already sense the need to accumulate fewer flight hours this season, then we do expect clear reductions in demand towards year end as well, although probably more busy than the summer period. This crisis will challenge us and other companies, and industries, by hitting the work the same time and in similarly heavy scale, so a really heavy trial for all.”
Once the crisis has passed, though, Kotka said Magnetic MRO’s future plans are simple: "To keep growing and expanding our business, to keep shaping the industry with our innovation, to keep offering our customers the best total technical care service that they can find on the market, and — most importantly — to keep loving what we do.
“We don’t stop to look back and enjoy the fruits of our hard work. We get our thrill from moving forward and writing our story. All of our engines are still running. Economic cycles are natural, although this crisis is special, hitting the world all at the same time and bring our volumes down and it postpones our planned growth, hence it will not change our bigger plan, developments and overall growth plans.”
It’s the same attitude that has helped Magnetic MRO from a maintenance department into a global entity.
“We have built up to our customer base with the strong and well-known, which has taken more than 10 years of hard work, commitment and reliable service, showing that an Estonian-based company can keep up and beat the global competition. That’s the biggest thanks and acknowledgement to our efforts and developments,” said Kotka.
