AFI/KLM V
ery Big Engine (VBE) business, specifically with the GE90 family
, is an ar
ea of gr
owth for AFI KLM E & M.
Industries KLM Engineering & Maintenance (AFI KLM E&M), with an airline to give you scale, a large independent like ST Aerospace — or an OEM — life is going to get tougher.”
The MRO business is very dependent on the airline industry,
says Walter Heerdt, senior vice president marketing & sales for LHT. European airlines, like carriers elsewhere, are facing strong cost pressure due to increasing oil prices. They also face additional charges and taxes. Of course, this impacts their business as well, he says. The business climate in the aviation industry is still quite tense, with fierce competition and enormous price pressure, agrees André Wall, president of SR Technics. Growth in the European MRO market has been essentially flat, Stewart says. Airlines are continuing to defer maintenance, destock inventory and conserve cash. So actual demand in Western Europe trails current global demand growth by up to three percent per annum, he says. AFI KLM E&M’s director of marketing, product support and development, Sébastien Weber, also sees only a “very slight upward trajectory” in the overall European market. And growth is highly dependent on the hardware you’re working on, he adds. “Growth is in new technology, not in old technology.” Stewart puts the total European MRO market—West, East and former Soviet states—at $14 billion in 2012, growing to about $18 billion by 2021, at 2.7 percent per annum. The Western European market is expected to grow more slowly in this period—from $11.4 billion to $12.7 billion, a rate of about 1.2 percent per annum. In the Eastern European/former Soviet state sector, which is enjoying relatively higher growth, the MRO market is expected to increase from $2.6 billion in 2012 to about $5.1 billion in 2021, or almost eight percent per year.
Lithuanian MRO, FL Technics, epitomizes Eastern European
growth. Its parent company, Avia Solutions Group, recorded a 57 percent increase in revenues from 2010 to 2011. Avia expects 35 to 40 percent revenues growth in the next three to four years, says FL Technics CEO, Jonas Butautis. Recently acquired line maintenance provider, Storm Aviation, is now a subsidiary of FL Technics. In the future, however, Stewart says that the large opportunities for
18 Aviation Maintenance |
avm-mag.com | August / September 2012 “ Avia
expects 35 to 40 percent revenues growth in the next three to
four years.” FL T echnics CEO, Jonas Butautis
growth are in the Middle East or Asia, where most of the big players already have a presence. MTU Aero Engines, for example, and its partner, China Southern Airlines, are expanding the capacity of their joint venture, MTU Maintenance Zhuhai, by 50 percent. LHT likewise has extended existing capacities in Sofia and Manila. ATR is setting up a customer support center in Bangalore, pools in Kuala Lumpur, and soon will have a training facility in Singapore.
Strategic Alliances Independent MROs are pressed by OEMs on the one hand and large airline MROs on the other: they need to adjust. “They can develop greater scale, hone their expertise, significantly lower their costs and/ or align with an OEM, for example, as a licensed service center,” Stewart says. According to ICF, the independent engine MRO business model is under threat without scale and OEM relations.
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