ITP Aero Sees Parts Repair Opportunity In MRO Future

BILBAO, Spain—ITP Aero expects most of its future aftermarket growth to be generated by commercial aviation activities and sees an opportunity in engine components repairs.

MRO currently accounts for around 10% of ITP Aero’s annual revenues and the company hopes aftermarket activity will account for 20-25% of total revenues over the next five years. Another key driver of this will be the expansion of its capabilities.

The former Rolls-Royce business is operating independently since being sold by the British engine manufacturer for €1.6 billion ($1.8 billion) to a group of investors led by Bain Capital in a deal finalized in late 2022. “We’ve tripled revenue since the Bain acquisition, and we’re looking to double again between now and 2030. So, there’s a lot to do make that happen,” said Eva Azoulay, CEO of ITP Aero Group at a late May press briefing at the company’s headquarters in Bilbao. “But it’s secured work, committed work, and under contract work. If you look at the balance, it’s about leveraging our capability and technology to continue to grow in MRO on other platforms and with other customers.”

Azoulay said she sees its MRO growth happening in two ways as ITP Aero targets a bigger footprint in the aftermarket.

The first would be organic growth through investment in capacity at sites in the U.S. and Spain and areas such as component repair capabilities in its operation in Aljavir, near Madrid, where it carries out MRO services. “Component repair is a big value proposition, and it is something we contribute a lot to—we have 1,500 engineers and we do these products,” she said.

Azoulay said it is also exploring the long-term possibility of introducing full overhaul capability for specific commercial engine platforms. “We are looking at the full spectrum from full overhaul to component repair to see what is complimentary us.”  Erlantz Cristobal, VP of engineering and chief technology officer, added that ITP Aero is industrializing repair capabilities and techniques at its Advanced Manufacturing Aerospace Center (ADMIRE), which opened in Spain’s Basque region in February. ADMIRE will focus on developing digital and advanced manufacturing technologies across several areas including additive manufacturing, advanced casting, advanced repair and welding, and Industry 4.0 technologies such as machine learning and AI.

Second, Azoulay said it is open to further inorganic growth through M&A activity, but this would be dependent on any acquisition being a good fit and bringing the right capability. Last year, the Bilbao-headquartered company completed the acquisition of Irving, Texas-based engine repair shop BP Aero, which provides engine maintenance, teardowns and component overhaul services on several commercial engine types. ITP Aero is also mooting the possibility of a second aftermarket location in the U.S.

Following the acquisition, BP Aero grew its portfolio by adding General Electric CF34 engine overhaul capability and ITP said it will make further investments in its hospital shop and quick-turn services this year. “We’re seeing the demand for their capability of hospital shops and component repairs for the CFM56 engine,” she said.

Across the broader business, Azoulay said the company is focused on executing its plans, as more than 90% of its long-term revenue growth from this year through to 2030 is committed under long-term agreements.  

Another driver of its future will be technology, an area which Azoulay said ITP Aero is reaping the benefits on certain commercial programs—such as the Pratt & Whitney Geared Turbofan (GTF) and Rolls-Royce Trent platforms—having become a risk and revenue sharing partner in the programs for several years. “Our fleet of engines is one of the youngest in the industry, so it’s about making sure we are well-positioned for that next cycle as it happens and positioning ourselves for that,” she said.

Since the Bain buyout, Azoulay said that the company has been investing around €100 million capital expenditure annually across its sites with another €100 million spent in 2024 on research and technology, which Azoulay said will grow further in the coming years.

Other recent investments include duplicating casting production along with building a logistics facility at its site in Querétaro, Mexico.