December 10, 2012
Sean Broderick Washington
Timco MRO Services is confident its new Cincinnati area regional jet heavy maintenance facility will drive business to other parts of the company, notably a pair of support shops and its aircraft interiors product line.
Timco purchased a turnkey regional jet maintenance operation at Cincinnati Northern Kentucky International Airport from Pemco World Air Services, which was planning on shuttering the facility. Timco closed the deal and transferred the FAA Part 145 certificate on Oct. 31, acquiring assets ranging from tooling and parts to the information technology infrastructure.
One asset came as an unvalued yet invaluable bonus: access to an experienced workforce left over from Pemco's departure and the demise of Cincinnati-based regional jet giant Comair, North America's Bombardier CRJ200 launch customer and a former provider of third-party regional jet (RJ) work out of Cincinnati. Timco MRO Services President Bill Norman tells Aviation Week that the new Cincinnati facility has a staff of about 50, and the company is eager to add more employees as demand warrants.
Several factors underscore Timco management's confidence that the customers will be there, Norman explains. In the North American market, existing regional jet MRO work is handled by the OEMs, Bombardier and Embraer, or by carriers that operate the jets. Some of Greensboro, N.C.-based Timco customers tell the company that independent competition would be welcomed, Norman says. He is quick to note that such overtures are hardly commitments; still, having existing customers clamoring for a new business line to meet their needs is a gratifying challenge for any business.
Another positive, in Timco's view: the demand for RJ MRO services—like the fleet mix itself—may shift, but it will not go away anytime soon. Norman acknowledges that betting on 50-seat RJ work would be a long-term loser. However, forecasts show that rapidly retiring CRJ200s will be replaced by other RJs—either larger Bombardier models like the -700 and -900 or Embraer 170s or 190s, which would create a stable, long-term demand for RJ MRO work.
Aviation Week data back this view, projecting the current fleet of North American RJs to grow slightly in the next decade, to 2,116 units by 2022 from 2,084 units. Larger models, primarily the Embraer 190 series and the bigger CRJs, will absorb the 50-seat RJ's dwindling market share as higher fuel prices drive those aircraft into early retirements.
The North American RJ fleet's near flat-line growth trend could signify a sweet spot for an independent MRO provider looking to get into the game. Rapid fleet expansion could attract too many competitors, while a steep fleet decline would obviate the need for MRO providers. A steady stream of new aircraft supplanting older, less economically viable ones means a set of operators continually searching for any cost advantages they can find.