Since we compiled the last biennial airframe MRO survey that examined 2010 data, global airline revenue increased, next-generation aircraft and engines entered service, and MRO market consolidation affected the European and Americas aftermarkets. A major business disruption occurred in March 2012 when Aveos Fleet Performance , which reported 2.6 million airframe maintenance man-hours in our last survey, abruptly closed and sent its customers scrambling to find new vendors.
In the past two years, the overall commercial aftermarket grew by $7 billion in total value, with the MRO market forecast to be worth $51.6 billion in 2013 (AW&ST MRO Edition, April 15, pp. MRO16-18). The 2012 MRO figures that we will examine in this survey reflect that the biggest MROs have become bigger—in their capabilities, footprint, labor hours and revenue. If you look at their objectives for 2013 and beyond, those trends should continue, as long as they can find enough qualified maintenance personnel to accommodate their growth plans.
Take the second-largest airframe maintenance entity in this survey, the Haeco Group, which includes Haeco, Taeco and Staeco. Combined, it accomplished 1,183 maintenance inputs and grew its profits in 2012 by 6.7% to HK$876 million ($112.8 million), which reflected a strong demand for both airframe and line maintenance in Hong Kong, in particular. It did this despite selling 1.3% fewer maintenance man-hours last year, compared to 2011, due to a shortage of experienced technical staff. In its 2012 annual report, Chairman Christopher Pratt highlighted that “Haeco expects to do less airframe maintenance work in Hong Kong in 2013 than in 2012, with labor shortages restricting man-hours expected to be sold in the first half to 1.2 million compared with 1.6 million in the first half of 2012.”
Do not equate this to lower revenues, however, because Haeco is offering more higher-value and integrated MRO solutions, such as inventory technical management, cabin completions and reconfigurations. In addition, “We see an upswing in the market demand for GE90 engine overhaul services and are positive with the potential of narrowbody passenger-to-freighter conversions,” says Summit Chan, Haeco Group director for commercial aircraft.
ST Aerospace, which has headed our Top 10 Airframe MRO list for the last several surveys, accrued 11.5 million airframe maintenance man-hours in 2012, compared with 8.78 million in 2010. The Singapore-based MRO’s global airframe capacity includes 38 widebody, 27 narrowbody and 24 general aviation bays across its network, which includes facilities in the Americas, Asia-Pacific and Europe. Expect the MRO to open a new two-bay narrowbody hangar at Singapore Changi Airport, the primary airport for the island nation, in the third quarter that should add 200,000 man-hours to its annual capacity.
“While we recognize that the global airframe maintenance market is expected to experience slower growth with the retirement of older aircraft and the introduction of less-maintenance-intensive aircraft, we hope to maintain comparable global airframe man-hours for the next 1-2 years by growing our capabilities,” says Chang Cheow Teck, ST Aerospace president.
The MRO says its Boeing 757 freighter conversions are steady—it has redelivered 70 of the 102 aircraft for which it has orders, and its expects 767 freighter conversions to resume “once the feedstock becomes available as the 787 deliveries stabilize,” says Chang.
Like Haeco, ST Aerospace, which recently acquired Volant Aerospace and DRB Aviation Consultants, has expanded its interior reconfiguration offerings—including a new line of seats branded ERGO—and expects this area of its business to bring a steady flow of work during the next 1.5 years.
Many MROs in the top 15 expect cabin interior projects to be one of the strongest growth areas in the next couple years. In particular, Sabena technics, with 1.8 million airframe maintenance man-hours in 2012, forecasts cabin modifications and VIP completions to be robust. It expects its 2013 numbers to be similar. SR Technics, with 881,000 airframe maintenance man-hours in 2012, includes inflight entertainment.