For gear on Boeings, Secord says there is an overhaul lull now, because there was a pause in deliveries 10 years ago, after the 9/11 attacks. However, he predicts demand in this segment will pick up in the next 3-4 years, driven by the renewal in deliveries in 2004-05. “Then, on top of that, older Boeing aircraft will come in for their second overhauls. The overall demand could double in the next three to four years,” says Secord.
In the past, some of the largest carriers invested in facilities to conduct landing-gear overhauls in-house. But this means major investment in plating and tanks and, now, the new high-velocity oxy-fuel thermal-spray technology that is replacing chrome in new models. Secord says even some larger airlines are considering exiting landing-gear overhaul business and he expects outsourcing to grow.
When outsourcing landing-gear overhauls, carriers typically look at their whole fleet and seek long-term deals of 4-5 years. UTAS has about 80% of the market for landing gear on Bombardier aircraft, but a lower share of the Boeing market, due to more competition in this segment.
Supporting mostly North America fleets, UTAS has two North American shops, one in Burlington, Ontario, and one in Miami. Transportation cost can be significant for the larger gear, depending on where the gear is removed and how it is transported. Secord says some airlines provide their own transportation, while others hire freight forwarders.
Being able to manufacture replacement parts and provide spare gear to support a carrier's overhaul needs may be particularly important in coming years. As Boeing ramps up production of new models and overhauls of gear on older models increase, there could be pressure on both replacement parts and rotable landing gear. Boeing has an exchange program for small airlines that do not buy spare landing gear, and UTAS has the spares to guarantee its customers' needs.
Secord sees no lack of shop capacity, given the ability of shops to increase shifts.
“2012 was a little soft,” notes Ernie Kiss, VP of quality and compliance for AAR Landing Gear Services. “But we see an uptick starting in the second part of 2013 and continuing probably at least through about 2016, in some regions much longer.” Kiss expects very significant growth in overhauls for China out to 2018 and AAR's shop in Kuala Lumpur is ready for the surge.
AAR has been overhauling landing gear for a quarter century and is now the largest independent shop, says Kiss. It works on all Boeing models, Airbus models up to the A340, and most common regional jets. Kiss sees more overhauls on the Embraer 170/190s as they come up for overhaul cycles. The A320 family and 737NGs also should be part of the pending uptick.
Carriers increasingly do not want to hold expensive spare gear assets, so AAR has its own spares and can arrange an exchange program to support a series of overhauls. The recent soft market has helped build up spares for this purpose, Kiss notes.