Independent MROs Investing In Capabilities, Growing Profits

By Henry Canaday
Source: Aviation Week & Space Technology

The company will probably invest between $20-50 million over the next couple of years, contingent upon on whether it finds attractive acquisitions for component repairs.

Engines on new aircraft are “a little out of our range at this point,” Cords says. StandardAero waits until engines need a significant volume of maintenance at full overhaul centers, not just warranty repairs. “We can't invest five years ahead of the maintenance curve.”

Relationships with OEMs vary. StandardAero sometimes competes with OEMs, sometimes OEMs own the customer but offload work to StandardAero, and sometimes an OEM teams with the MRO in selling long-term support. “The customer wants the OEM offer but also wants to work with us,” Cords explains.

Operators often come to independents like StandardAero to modify maintenance programs. “We do LLPs or parts replacement differently. We are creative,” Cords says. That and turn times that can be 30% faster than rivals' keep StandardAero busy and investing.

Smaller engine MROs also see opportunities. Jet Aviation Specialists (JAS) grew to 75 employees in 25 years, repairing components such as combustors, cases, rings and honeycombs on CF6s, CFM56-3s, -5s and -7s, and PW4000s. JAS just invested $4 million in offices, facilities and equipment. President Diego Beltran aims for a 20% average annual growth rate.

Beltran sees room for expansion because JAS serves a niche, not competing with engine OEMs but supplying them on beneficial terms.

JAS budgets 10% of revenue for investments needed for technology changes. “Once you may have used a plating process; now you use HVOF [high-velocity oxygen fuel] or another process,” Beltran notes. “You must make sure you have equipment to support newer engines.”

Sixty percent of investment typically goes to equipment and machinery, 30% to tooling and 10% to upgrading facility layouts. Requirements must be planned at least a year ahead to be available when needed.

JAS recently brought honeycomb repair work in-house that used to be outsourced. Beltran also is interested in adding GE90 capability, if he can find a way to work with the manufacturer. “OEMs tie up new engines for 10 years, so they need to mature a bit before we start to see them. But there may be an opportunity with the GE90.”

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