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Give or take a few hundred million- the market today for engine and aircraft maintenance- repair and overhaul (MRO) services already easily tops $40 billion- with North America accounting for nearly $16 billion (approx)- or about 38 percent. According to Frost & Sullivan- our source for this information- MRO services should grow at nearly Four percent a year worldwide- while North America grows at a still-respectable- but more-modest 2.8 ...

Dave Higdon   |   1st October 2008
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Dave Higdon Dave Higdon

Dave Higdon writes about aviation from his base in Wichita Kansas. During three decades in...
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Powering Up:
Engine MRO services growing strongly.

Give or take a few hundred million- the market today for engine and aircraft maintenance- repair and overhaul (MRO) services already easily tops $40 billion- with North America accounting for nearly $16 billion (approx)- or about 38 percent. According to Frost & Sullivan- our source for this information- MRO services should grow at nearly Four percent a year worldwide- while North America grows at a still-respectable- but more-modest 2.8 percent.

But regardless of who you hear- forecasts leave little in doubt about one fundamental of MRO spending: it’s a lot like death and taxes; it’s unavoidable – and it’s headed upward.

As things stand- business aviation aircraft and engines make up approximately one fifth of the global MRO market – another number with strong growth potential. AeroStrategy- a consulting firm- was recently quoted as seeing the business aviation MRO market as about a $7 billion business. At a minimum- we can expect MRO to grow somewhat in proportion to the expansion of the aviation fleet. In layman’s terms: more airplanes- more work; more flying- more work.

According to the consultancy- the global MRO market should grow by an average of 6.5 percent annually through the coming few years – totaling about $9.5 billion by the close of 2012. Other sources hint that the growth rate may slow by then- mainly through a combination of two factors…

Most prominently- MRO growth could fall slightly behind fleet growth thanks to advances in reliability accompanying today’s new aircraft. Today’s new turbine business aircraft enjoy extended maintenance periods- but downtime required for their periodic and unplanned shop trips is also down.

Another factor which could slow the dollar growth in MRO spending is the growing economic disadvantages under which many an older jet labor. Higher fuel costs have hit the older jets hard- and growing maintenance and upkeep costs are also decreasing their appeal. As turbine aircraft age- their needs increase. Eventually- they become uneconomical to continue operating and face replacement by newer wings- which essentially equates as cheaper to fly and to own.

As those jets start to retire in larger numbers- the above average spending they’ve generated down the years will be replaced by the lower-cost demands of new jets… At least- that’s one view. Otherwise- as the fleet grows so will MRO services grow. After all- in between the start and end of its service life- the maintenance shop serves as the medical clinic that keeps a jet healthy- productive and cost efficient.

Institutionalizing the maintenance- repair and overhaul needs of an airplane – any airplane – goes a long way to getting out of that asset a maximum in utility at the lowest cost in surprises and availability. Meeting operators’ needs for service and upkeep stands to keep the MRO market in a state of change for years to come. Following are some examples.

MRO Expansion
Across the globe- companies are erecting new facilities and expanding staff to accommodate the worldwide growth in business aviation. Among those companies is General Dynamics- which owns Gulfstream International and its deep network of service facilities.

Earlier this year- General Dynamics announced its agreement to acquire Switzerland’s Jet Aviation- along with its international network of FBOs and maintenance facilities branded as either Midcoast or Jet Aviation. Even with the acquisition of a competitor- GD continues to focus its efforts to increase the depth and diversity of its business aviation services.

In addition to the evidence in the acquisition of Jet Aviation group is GD’s intent to continue operating the group – and its different brands – as they’ve always operated.

That means continuing with Jet Aviation’s ongoing plans to establish a new Midcoast Aviation MRO operation at Ogden- Utah- on a site adjacent to an existing Jet Aviation FBO. The new Midcoast MRO facility will focus on mid- and large-cabin business aircraft with cabin and airframe refurbishment- painting- heavy maintenance and component repair services. And it represents the opportunity service providers see in the ongoing growth in business aviation.

When you can’t get there from here…
Of course- so much business and information flows on the Internet. So it should come as no surprise that even here something as physically oriented as MRO services have something to offer business jet operators. And this sort of service holds something special for those operators who face one of those uncomfortable times when the aircraft needs service far from home – and without the immediate ability to get ‘there’ from ‘here’.

Jet Repair Anywhere (www.jetrepairanywhere.com) provides pilots- crew and operators with access to a database of MRO service providers that can serve to match up the in-need aircraft with a ready-to-help shop.

Founded in early 2007 by former corporate aircraft maintenance director Cheryl Janke- this Arizona-based web service boasts a database of turbine-specific and qualified maintenance shops numbering more than 5-500 in the U.S.- plus another 500 international facilities. That number is growing- thanks to the efforts of the very savvy Janke- who holds her own A&P technician certificates.

JRA pre-qualifies the shops its presents and provides its aircraft-operating clients with access to each maintenance operator’s certificates- licenses- qualifications – even its employee drug-testing records- which proves an important piece of information for 135 charter and on-demand operators.

The site allows client operators to search by location- services- aircraft type- even for specialized work such as engine- or avionics-only shops. Member shops subscribe according to the type of service they offer – whether comprehensive or specialized – and operators enroll according to their fleet size- with the basic membership covering up to three aircraft. Partners with JRA include some of the largest planemakers and service providers in the business aviation field.

The newest service from JRA is a free maintenance quote service- which provides operators with a tool for obtaining the best available rates for needed work. This particular service is not only free- it’s anonymous for the user and available to the general aircraft-owning population – without a subscription agreement with JRA.

There’s no place like home
The top choice among many operators for MRO needs are the folks who designed- tested- certificated and built their airplane: the factory-operated service center itself. With more than 5-100 jets in service- arguably no company offers more depth in this area than the folks at Cessna Aircraft.

Its signature service center sits adjacent to the factory at Wichita Mid-Continent Airport- a relatively new facility designed to service hundreds of Citations weekly. The ‘shop’- such as it is- seems to stretch on for a mile – though it’s not quite that long. But aside from the commercial terminal across the east-side Runway 18L/36R- the Cessna Citation Service Center at ICT is the most-imposing building on the airport.

With nine domestic Cessna Citation Service Centers – each a 24/7/365 operation – a European factory center- plus more U.S. authorized facilities and others in Canada- Europe- South America- Africa and the Pacific Rim- the company strives to meet its owners’ needs regardless of the region hosting the Citation.

Cessna’s own in-house programs- as well as maintenance-record tracking and control- provide Citation operators with service and parts at a level only factory programs can offer.

Meantime- Bombardier – with shops for all three of its lines; Global- Challenger and Learjet – Dassault- Hawker Beechcraft- and also Gulfstream all offer operators MRO services and programs tailored to keep the company jet in factory-fresh shape.

Enrollment in established programs offers operators a way to budget- account for and assure that everything from routine and planned maintenance through unexpected problems are covered.

Programs typically vary from a full-aircraft to ones specific to a system area such as engines – a particularly popular approach operators often choose through programs available from the powerplant company- whether Honeywell- GE- Pratt & Whitney Canada- Rolls-Royce or Williams International.

Third-party MRO services
There’s unlikely a reader of this piece who hasn’t been pitched an extended warranty for some product they’ve purchased – whether a consumer product like a coffee pot- or a major purchase like an auto. Business aircraft operators have some similar options for aircraft beyond the reach of factory coverage through firms such as Jet Support Services Inc (JSSI).

JSSI (www.askjssi.com) offers a variety of MRO-support programs from which operators can tailor the coverage and manage the expense of keeping the corporate wings in working order.

The company works with qualified- proven providers local to the operator’s base- which means that a company with an aircraft enrolled in one of the company’s programs knows who will be working on their aircraft- and that the work will be performed as conveniently as possible.

And JSSI taps an extensive database of service providers specializing in engines- avionics- airframes and systems knowing the shops’ capabilities and expertise. JSSI also provides an individual dedicated to overseeing the needs of the enrolled aircraft – similar to having an in-house maintenance director.

Program options available from JSSI range from engine-only coverage to what the company labels tip-to-tail coverage and degrees of coverage which vary according to the operator’s needs.

For example- within the engine-only realm- operators’ choices include a complete plan known as “Select” that covers virtually every contingency – up to- and including- rental of replacement engines – designed to eliminate the possibility of an expensive surprise. And the rental engine coverage means the plane can be kept in service with less downtime. Costs are a flexible hourly rate based on an assessment of planned use and the age and history of the powerplants.

At the opposite end of the JSSI engine service spectrum is the “Unscheduled” plan- which for a far-lower hourly rate covers the landscape of unscheduled maintenance for the engine- accessories and life-limited components- future ADs and mandatory service bulletins- a troubleshooting labor allowance and a rental-engine plan for major unscheduled problem that requires removal of the engine for five or more business days.

Another level of coverage labeled “Term” provides Complete-level coverage for a pre-defined duration chosen by the aircraft operator – for which JSSI creates a custom hourly rate tailored to the customer’s needs.

Beyond these services- JSSI offers additional options to its MRO programs- including one that gives the operator a vested financial interest in the trust account for the airplane – an option that can reward the operator with a cash return at the end of the program- depending on the services used and funds spent to cover them.

End benefits
Of course it’s appealing- the idea of enrolling in a program that keeps the airplane available and earning its keep. Even more appealing for many an operator is the cost predictability of MRO program enrollment. Not only does such help flatten the often up-and-down curve of maintenance spending; it helps manage the jet’s aircraft maintenance needs and assures those are met – on time- and expertly.

In turn- such enrollment can help the operator/owner realize a higher return on their investment when the time comes to sell off the jet. Employing established MRO programs to track- manage and accomplish maintenance- repair and overhaul needs is a proven way to increase the sale value of a pre-owned jet. And that value gain can help offset the costs of participating in such programs.

For evidence- merely take a look at many of the ads within the pages of this very magazine. You’ll frequently see a reference to an available aircraft’s enrollment in an established maintenance program. Besides- in the end- the best businesses perform best when they care for their tools. And few tools cost as much- or perform was well as the corporate aircraft.

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