World Commercial Aircraft Modernisation, Repair and Overhaul (MRO) Market

Size: px

Start display at page:

Download "World Commercial Aircraft Modernisation, Repair and Overhaul (MRO) Market"

Antonia O’Brien’
7 years ago
Views:

1 4.5 Evaluating the HMV/Mods MRO Submarket Table 4.5 HMV/Mods MRO Submarket Forecast ($bn, AGR, CAGR, Cumulative) Sales $bn AGR () CAGR () CAGR () Figure 4.11 HMV/Mods MRO Submarket Forecast ($bn, AGR) Sales $bn AGR Year Mkt Value ($bn) AGR () 0 Figure 4.12 HMV/Mods MRO Submarket Share Forecast 2013, 2018 and 2023 ( Share) Page 47

2 5.5.3 The Next Few Years will be Crucial for AFI-KLM Although AFI-KLM is one of the largest providers of MRO service activities to have operations there, the company has not escaped the effects of the economic downturn on its business. With fuel prices continuing to eat into its profitability margin, the company has resorted to a programme of restructuring in order to return to sustainable profitability. The three year transformation plan will see a slight reduction in the active fleet belonging to Air France whilst the company plans to maintain existing flight capacity. It also plans to increase its share in the engine MRO submarket by improving its economic efficiency, increasing its revenue generated from third party airlines and restructuring hangar space. Whilst AF-KLM is just one of many companies which operate in the French MRO market, it current state of affairs is reflective of the challenges facing many other MRO providers. For this reason, Visiongain predicts that the French MRO market will lose market share and only achieve a moderate CAGR rate during the forecast period. Table 5.13 France Commercial Aircraft MRO Major Contracts & Programmes (Company, Date, Details) AFI-KLM October 2012 Signed a long-term maintenance and pooling contract with Flybe- Finnair joint venture Flybe Finland. The agreement covers an extensive array of components, including the propellers of the turboprop aircraft which included three ATR 42s and eleven ATR 72s. The contract includes access to a spares pool located at AFI KLM E&M's Roissy-CDG Logistics Centre, and the lease of a Main Base Kit, to be positioned at Flybe Finland's Vantaa-Helsinki airport main base. AFI-KLM E&M July 2012 LOT Polish Airlines signed a long-term component support agreement with AFI KLM E&M for its fleet of Boeing 787 Dreamliners, which will ultimately comprise eight aircraft. LOT was scheduled to deploy the Dreamliner in January The support provided for LOT Polish Airlines covers repairs and pool access for more than 600 part numbers, together with logistics support and the provision of a stock of spare parts at the customer's main base. AFI-KLM E&M May 2012 Aigle Azur renewed work with AFI KLM E&M by signing a component support contract for its fleet of A320s. The contract is a flight-hour agreement for component support, with pool access and repairs. It also includes major overhauls (C-Checks) on a nonexclusive basis. Page 67

3 5.10 Indonesian Commercial Aircraft MRO Market Table 5.25 Indonesian Commercial Aircraft MRO Market Forecast ($bn, AGR, CAGR, Cumulative) Sales $bn AGR () CAGR () CAGR () Figure 5.21Indonesian Commercial Aircraft MRO Market Forecast ($bn, AGR) Sales $bn Year Mkt Value ($bn) AGR () Figure 5.22 Indonesian Commercial Aircraft MRO Market Share Forecast 2013, 2018 and 2023 ( Share) AGR Page 83

4 7. Expert Opinion 7.1 AFI-KLM E&M Sébastien Weber is the Vice President of Marketing and Product Development at AFI KLM E&M. AFI KLM E&M is an international recognized major provider of maintenance, repair, overhaul and modification services for commercial aircraft. Sébastien Weber kindly provided answers to Visiongain s questions in April Understanding AFI-KLM s Involvement in MRO Visiongain: Could you outline your involvement with MRO and some of the recent work that you have been doing? Sébastien Weber: As you know, before 2004, AFI and KLM E&M were competitors in the MRO market. We maintained the fleets of our parent companies, AF and KLM respectively, and we provided MRO services to external customers. In 2004 AF and KLM merged to form a joint commercial organization. AFI-KLM E&M became a division of this organization meaning that we have one target plan, one budget and one reporting system. Subsequently, we created centers for excellence to deal with specific products and services based on each company s experiences. Traditionally, KLM were Boeing orientated before they ordered the A330 whilst Air France was more Airbus orientated even though it had some 777 and some 747s. Following the merger, both companies split and spread the work which they were able to do at their own facilities in order to avoid overlaps. Of course, KLM still performs line maintenance on their own fleet and they do their own work for the 777 and the A330 whilst Air France does the same thing for its own aircraft at its main base. But component and engine maintenance, heavy checks modifications and secondary services like working on APUs and thrust reversers are all done at these centers of excellence. Presently, AFI KLM E&M is in the middle of a programme, known as Transform 2015, to reduce costs and restructure the company in such a way that will bring us closer to our customers. Our involvement within the MRO business is to serve our customers with a whole range of services including engineering and airframe, component and engine maintenance, APUs, modifications and even training services. We can provide a turnkey solution to our customers who might need work done on a very specific aircraft type, component part, or who have a limited budget or time frame in which they need to get work done on their aircraft. We also provide other customers with Total Care packages. So our MRO services encompass a broad range of services from individual aircraft to airlines requiring maintenance on an entire fleet. We service every type of Airbus and Boeing Page 101

5 8. Leading Companies in the Commercial Aircraft MRO Market 8.1 AAR Overview Table 8.1 AAR Overview 2011 (Total Revenue, HQ, Ticker, Contact, Website) 2011 Total company revenue $bn $2bn Headquarters Ticker Illinois, USA AIR IR Contact Tel: Website Table 8.2 AAR Products / Services (Product, Specification) Product Specification Overhaul and Maintenance Duluth 80,000 Sq ft. Hot Springs five nose to tail maintenance lines Indianapolis 10 bays Miami - 226,000 Sq ft. for C and D checks Oklahoma - Full Service at seven hangars Component Repair Overhaul, Replacement, Exchange, Scrap Replacement Options Composite Repair Produces advanced structures using autoclave cure, oven cure, resin transfer moulding (RTM), compression moulding and vacuum assisted resin transfer moulding (VARTM) Engineering Services Landing Gear, Wheels and n/a Repair for 43 types of aircraft, both commercial and military Breaks Page 104

Trends in Aviation & Impact on MROs. Khwaja M. (KM) Ali Director, Maintenance Economics

Trends in Aviation & Impact on MROs Khwaja M. (KM) Ali Director, Maintenance Economics 7 th Maintenance Cost Conference Singapore, October 19-21, 2011 Seven Trends Are Shaping The Long-Term Structure Of