Franck Terner EVP Engineering and Maintenance AFIKLM E&M Commercial


In your opinion, what is the state of the aviation maintenance industry? This is a state of contrasted and fragile growth: we have seen in 2012 a decline in the world growth pace of MRO revenues, with some casualties, but also consolidations or new ventures. There is still an appetite for the MRO business, but the MRO customers, in other words the airline community, are more and more looking for cost reductions and therefore asking to the MRO suppliers to bear more risks and lower their prices. This pressure, along with the necessity to be closer to the market, led some MRO players to open new facilities or establish partnerships or joint ventures in regions with sustainable air transport growth. What were the biggest developments for your company in 2012? • Successful positionning on the 787 component support (Contract with LOT, European launch airline). Our strength : we are the MRO branch of an airline group which ordered the 787.


• Full Very Big Engine maintenance operator, main alternative to the OEM on GE90. Opening of a new engine test cell fitted to VBEs in 2012. • Announcement regarding a dedicated offer on Embraer Ejet component support, together with LHT • Revenues 2012: 1.1 bn€, +5.4% ; operating result 145m€, compared to 110m€ in 2011. What are the biggest changes you have seen in the MRO industry in the last several years? • Because of the economic crisis, the market was adversely affected by the adjustment measures adopted by most airlines. Measures included reductions in flight schedules, route closures, and early retirement of older aircraft. These effects persisted throughout 2012, on the European market in particular.


• This trend results in Airlines need for cash and increased competition among MROs. • OEMs want to develop their after-sales services on this market. This positioning reflects a long-term strategy based on leveraging intellectual property through the marketing of licences for maintenance services providers wishing to exercise their activity in certain products. If this orientation results in reducing competition, it could have a negative impact on airline maintenance costs. What did your company do in 2012 to adapt to changes in the market? As you know, “adaptiveness” is a key attitude for us in this changing market. We are permanently developing our offer on new products and services, such as 787 or very big engines. In the framework of the Transform 2015 plan, several initiatives are taken in order to increase and/or restaure competitivity, depending on the products. Productivity and cost saving measures in our european facilities will help to strengthen AFI KLM E&M position on the component and engine support market. For more of Franck Terner’s answers go to www.avm-mag.com


Peter Turner Vice President of MRO Services Delta TechOps Commercial


In your opinion, what is the state of the aviation maintenance industry? The state of the aviation maintenance industry is relatively strong following a few strong years in the broader aviation industry. However, MRO customers continue to demand higher standards of service delivery through increasingly valuable combinations of services, quality and total cost performance. What were the biggest developments for your company in 2012? Delta TechOps was voted “Best Total Solutions Provider” in the 2012 OneAero MRO Top Shop Awards. The awards, which were presented to only 17 out of 500 eligible aerospace repair centers around the world, recognize companies with superior customer support, excellent turn-around times and competitive repair pricing. What are the biggest changes you have seen in the MRO industry in the last several years? OEMs have gained significant control over the aftermarket for MRO services in the last several years with maintenance contracts being bundled with aircraft acquisitions. OEM partnerships with formerly independent MROs have decreased competition. Strengthened licensing agreements have limited cost-saving opportunities to airlines meanwhile, OEM catalog pricing continues to escalate. What did your company do in 2012 to adapt to changes in the market? We have focused on cost control and are implement these improvements across our business to ensure a cost competitive alternative to the OEMs exists for our airline customers. In order to provide an alternative to the OEMs, Delta TechOps has focused on offering a broader service across a greater number of product lines that we operate. We are further focused on developing new capabilities and expanding product lines to drive cost improvements and offer a broader choice to our current and expanding customer base. What are the trends, big or small, you are beginning to see in the MRO business? More and more operators are looking for a one-stop shop for all of their maintenance in order to stay focused on their core business of flying. Integrated programs like Delta TechOps Complete Fleet™ Services provide operators a custom-tailored solution through which the MRO provider can seamlessly manage any portion or all of an operator’s maintenance. We believe as Delta’s maintenance provider, we are uniquely placed in the MRO market. We experience the same challenges as our airline customers and experience the same operational and technical issues. We are therefore uniquely placed to deliver a service here different from the OEMs or other non-airline MROs. How is your company leveraging partnerships and alliances for success? Delta TechOps has joined hands with Aeroméxico to create an airframe MRO joint venture to be based in Mexico to provide airframe heavy maintenance to Delta, Aeroméxico, and third-party customers. The new JV is an expansion upon the close relationships among not only both of the MROs but also both of the airlines. Delta Air Lines acquired a 4.17 percent stake in Grupo Aeroméxico in 2012.


Aviation Maintenance | avm-mag.com | April 2013 23


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