AFI KLM E&M has managed to have rather steady gr
owth in global external customer r
MRO recognizes carriers’ cost pressures and bases its model on “the principle that we repair rather than replace.”
Engine Business The engine OEMs now, on average, own about half of their aftermarket, and their share is growing, Stewart says. Germany’s largest engine maker, MTU, expects the global commercial engine MRO market to double in the next 10 years, from an estimated $17 billion in 2011 to about $35 billion in 2021 on an escalated basis. The company currently has about 8 percent of the market.
MTU also considers itself the largest independent provider of commercial engine MRO and among the top five players in this segment, according to Dr. Stefan Weingartner, MTU’s president for commercial maintenance and company board member. MTU has more than 500 customers worldwide. He predicts airline MROs’ portion of the engine market will decrease from their current 20 percent share.
MTU is a keen competitor on a wide array of engines, some of which — like the GE90, the world’s largest engine — it had no role in building. It vies, for example, with General Electric and AFI KLM E&M, whose parent airline is the largest GE90 operator. This summer MTU won a long-term, $200-million GE90 MRO contract from AeroLogic, a joint venture owned by DHL
evenues in the last thr
ee years.
Express and Lufthansa Cargo. AeroLogic is MTU’s fourth GE90 customer. MTU also offers on-site services, a
growing trend in the engine MRO market. Last year it purchased Dallas-based Retan Aerospace, now known as MTU Maintenance Dallas. This U.S. branch, along with teams in Berlin, Hanover and China, specializes in local hangar work, ranging from on-wing repairs to off-wing repairs that do not require complete engine breakdown and comprehensive test.
But MTU is certainly not alone in doing so. AFI KLM E&M, for example, provides expertise and resources through on-wing support teams who can perform temporary on-wing engine repairs at line stations. LHT likewise provides on-wing engine services through its airline support teams working from local stations in the U.S., South America, Africa, Hong Kong, Australia and Germany. MTU stresses flexibility. “We offer everything around engine maintenance,” including leased spare engines and real- time engine trend monitoring, Weingartner says. Engine maintenance is the most expensive area of MRO — about 40 percent of total aircraft maintenance cost — so airlines need to get their money’s worth. MTU also buys engines to tear them down and obtain used parts.
While OEMs typically want to maximize their spare parts revenues, MTU also
22 Aviation Maintenance |
avm-mag.com | August / September 2012
develops repair technologies. “Its philosophy is that repair beats replacement,” Weingartner says. The company also tailors repairs to customer needs. It considers how the engine is operated and where the aircraft is flown. For example, it offers a coating for compressor blades that help them withstand sand- and salt-filled environments like the Middle East. Such FAA- or EASA-licensed repairs, called MTUPlus repairs, typically lower operating cost, he says.
For customers who know just what they want, the company still offers time and materials contracts. For customers who are more risk-averse, MTU offers fixed-cost per flight hour, “power by the hour” agreements, as well. These are a growing phenomenon, especially among new airlines. Today some 20 to 25 percent of MTU’s MRO contracts are the fixed-price type. About 40 percent of new contracts will be of this type in the future, Weingartner estimates.
Component Repair and Overhaul The component repair business is also changing and consolidating in Europe and elsewhere. One trend is that more and more airlines are signing integrated, flight-hour- based support agreements, Stewart says. These fixed-price per flight hour agreements offload non-core services, align airline and supplier objectives, reduce internal management burdens and make costs more predictable, he says.
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