Air Canada Technical Services Looks Forward to Independence

As of September 30, 2004, Air Canada Technical Services (ACTS) joined the ranks of independent MROs. It's a move that was long anticipated by ACTS president and CEO Bill Zoeller. In a January 2004 interview with Aviation Maintenance, he anticipated the change and said, "in the future, we will be spun off as a wholly-owned subsidiary."

Eleven months later, ACTS seems to be on a path that will fulfill this prediction: under the corporate restructuring plan that is allowing Air Canada to emerge from bankruptcy, ACTS is actually a stand-alone sister firm to the airline, with both being owned by a new holding company called ACE (Air Canada Enterprises). ACTS isn't the only former Air Canada (AC) division to be cut loose: the AC regional carrier Jazz is also taking the standalone route, as is AC's Destina online travel business, and the airline's cargo and ground-handling operations.

Today, Zoeller remains bullish about ACTS's fortunes as an independent MRO. "As a division of Air Canada, we were a cost center that was often competing for funds with other parts of the company," he told Aviation Maintenance recently. "As an independent MRO reliant on our own revenues, we're in a position to make money, and to decide how much to spend to improve ourselves competitively."

In truth, ACTS looks well-placed to profit from independence. Under its new relationship with Air Canada, this 8,000-person MRO already has maintenance agreements with Canada's national carrier and Jazz that should keep its shops busy. Under these agreements, "we will charge them market rates for the services we provide," Zoeller said. Meanwhile, ACTS's expertise in maintaining Airbus aircraft should make it attractive to American carriers needing these services. In addition, the fact that ACTS has heavy maintenance hanger spaces in Montreal, Winnipeg, Calgary, and Vancouver--plus line maintenance in these and three other Canadian cities--means that this MRO's facilities are conveniently close to a number of major U.S. hubs.

In a bid to improve revenues through sales volume, ACTS has decided to focus its activities on a few key aircraft and aircraft engines. "In Vancouver we will be doing B767s and A310s, plus some B737 Classics and NGs," Zoeller said. "In Winnipeg, we are focused on the A319, A320, and A321s; in Montreal it's the A330 and A340; and Calgary will work on smaller aircraft such as the BAe-146 and the Bombardier Regional Jet." Among the aircraft no longer serviced by ACTS are the B747, DC-9, DC-10, and MD-11. "On the engine side, we have decided to narrow in on General Electric's CF34 and CFM56, while dropping the Pratt & Whitney PW4000," he continued. "We're keeping the CF34 and CFM56 because they're still in production and are widely used on newer aircraft. In contrast, the PW4000 is no longer being made, and the aircraft which use it are in the latter stages of their careers."

ACTS has spent the last few years improving its mechanics' productivity from 1,000 to 1,625 man hours of billable work per year; has cut its material costs from 30 to 20 percent, and has even reduced its payroll without cutting jobs. "We have also rationalized the number of skills sets in our shops from 918 to just 11, which vastly improves our ability to reassign and retrain technicians," Zoeller said. "The bottom line is that we are looking forward to the future as an independent MRO." -- By James Careless

MRO Profile

Victorville Aerospace

Located at the former George Air Force Base in California's Mojave Desert, Victorville Aerospace LLC is an MRO with a few distinct advantages. First, the Southern California Logistics Airport (SCLA) that has taken over the George AFB has access to two runways measuring 10,050 and 9,116 feet respectively. The site also comes with 6.3 million square feet of ramp space; combined with the Mojave's dry climate, this has made SCLA into a prime aircraft storage and engine swapping site with more than 200 commercial airliners stored on the tarmac.

Victorville Aerospace is the successor to BAE Systems, which operated MRO facilities at George AFB. -- By James Careless

MRO Victorville

Facilities: aircraft servicing and storage at the Southern California Logistics Airport in Victorville California. SCLA is a 24/7 operation offering customs and immigration services onsite. There are no landing fees; SCLA is located 45 minutes away from Ontario airport and 1.5 hours from LAX.

Total Hanger Space & Bays: more than 190,000 square feet of space. One hanger is 54,000 square feet, supported by 17,000 square feet of shops and offices. The second hangar is 26,000 square feet, supported by 15,000 square feet of shops and offices.

MRO Capabilities: Victorville Aerospace provides

� A- through C-checks
� Line maintenance
� Aircraft modifications
� Aircraft deactivation, storage, and reactivation
� Engine removal, installation, and operational checks

Aircraft serviced include:

� Airbus A320� Boeing B717, B727, B737, B747, B757, B767, and B777
� McDonnell Douglas DC-9, DC-10, MD-11, and MD-80
� Fokker F-28/F-100

Certifications/Approvals: FAA A-C-checks, line maintenance, modifications. Limited instrument/limited radio, JAA certification.

Partnerships: Cooperation agreement with Southern California Aviation

Total Staff: 90+
Total Engineers: All engineering is outsourced
Goal: "We want to secure a solid customer base by offering complete aircraft services from storage and maintenance to disassembly/parts distribution and asset recovery management," says Tad Jakes, Victorville's vice president.

Gearing Up for the Airbus A380

When the 555-seat, double-decker Airbus A380 enters service in 2006, maintenance professionals will be watching closely. The reason? With 139 A380s already on order by airlines such as Lufthansa, Air France, Emirates, Singapore Airlines, and Fedex, this high-tech wonder is destined to enter service shops worldwide for regular maintenance and--eventually--overhauls as well.

To service the 239-foot A380 (seven feet longer than the Boeing 747), MROs will have to do more than expand their hangars. They will also have to upgrade their equipment to tend this aircraft's composite metal/carbon fiber airframe, two 5,000 pound per square inch Eaton hydraulic systems (other Airbuses use three Eaton hydraulic systems pressurized at 3,000 psi), Thales Avionics digital heads-up display (HUD), and either Rolls-Royce Trent 900 or General Electric/Pratt & Whitney Engine Alliance GP7200 engines.

Obviously, such extensive upgrades will take time to design and implement. However, independent MROs that responded to questions from Aviation Maintenance are not gearing up to service the A380, either now or in the immediate future.

Why are third-party MROs taking a wait-and-see attitude to servicing the A380? "There will be the extensive warranty period covering each new aircraft," replied Fred Zimbelman; president of the Soundair Repair Group in Snohomish, Washington. "This will drive most component removals back to the OEM or to the large operator's back shops where warranty support agreements have been established."

So will third-party MROs start getting A380 work once its warranty periods have expired? Zimbelman isn't holding his breath. "It has been Airbus's policy to not support third parties on any Airbus product, especially in the U.S.," he explained. "This policy is accomplished in a number of ways, starting with restrictions on the availability of ICAs [instructions for continued airworthiness]. At the component level, Airbus addresses ICA requirements simply by instructing the operator to remove and replace the component on the aircraft." This policy effectively prevents third-party MROs from repairing Airbus components, a limit that has motivated some U.S. MROs to file a complaint on the matter with the FAA.

"We are not certain what opportunities for A380 support will be the greatest," Zimbelman concluded. "But as a domestic [U.S.] third-party provider, we know that any opportunity will not come easily."

Fred Zimbelman's second point is echoed by R.C. Cannaday, chairman of Aerotron AirPower in LaGrange, Georgia. "Aerotron AirPower has no plans for future participation in MRO for the A380," Cannaday said. "Regrettably, Airbus continues to block access to the instructions for continued airworthiness and thus has prevented the possibility of independent MRO providers participating in maintenance for this aircraft and its components, and for that matter, for any of the other Airbus models. Most regrettably, there has yet to be any regulatory enforcement by the FAA requiring the airframe and equipment OEMs to make these ICAs available to those who are required by law, under the FARs, to utilize this data."

In contrast to third-party MROs, airline MROs, including those independent MROs that serve Airbus-owning airlines on a full-time contractual basis, are looking forward to servicing the A380. However, not all are undertaking major facility upgrades at this time.

A case in point is Swissport, which serves U.S. and international airlines. According to Hasnain Ansari, Swissport USA's vice president of aircraft maintenance, his company will definitely be acting as an A380 MRO. However, given that this aircraft has yet to fly, "modifications to our facility will not be necessary at this time," he said.

In contrast, Lufthansa Technik is already deep into its A380 upgrades. Although Lufthansa Technik has become an independent MRO with many airline clients worldwide, "Lufthansa is still our single largest customer and they have ordered 15 A380s," said Aage D�nhaupt, Lufthansa Technik's manager of international communications. "Even though Lufthansa's first A380s won't be delivered until 2007, we have to start getting ready now to take care of them."

Lufthansa Technik has struck a component support alliance with Air France Industries and a 50/50 engine overhaul venture with Rolls-Royce called N3 Engine Overhaul Services. The Lufthansa Technik/Air France components alliance will both share parts to service the two airlines' combined fleet of 25 A380s and also seek to serve A380s owned by other airlines worldwide. Meanwhile, N3 Engine Overhaul Services is due to start business in 2007 at a location in Paris, France.

For Lufthansa Technik to fulfill its part of the bargain, it needs a hangar capable of housing multiple A380s. To meet this need, Fraport AG (the body that operates the Frankfurt International Airport) is building a new A380 maintenance hangar, taxiways, and parking spaces on a 20-hectare site south of the airport. "This new hangar, which will be operated by Lufthansa Technik, will cover 49,000 square meters [527,436 square feet] and have room for four A380s at a time," said D�nhaupt. "This will be the main center for Lufthansa Technik's A380 line maintenance services."

Line maintenance is just one of four MRO elements associated with the A380, according to D�nhaupt. The other three are component support, engine support, and heavy maintenance. As noted earlier, Lufthansa Technik's alliance with Air France Industries will aid it in managing component support, while N3 will take care of engines. However, at press time it wasn't known where Lufthansa Technik would be conducting heavy maintenance on the A380. "We haven't made a decision about heavy maintenance, because the first A380 to require it won't be due in the shop until at least 2012 to 2013," explained D�nhaupt.

Given Airbus's preference for dealing with airline MROs (both directly owned by Airbus customers or contracted to them on an ongoing basis), Lufthansa Technik will likely be seeking relationships with MROs supporting other A380 customers such as Emirates, Qantas, and Singapore Airlines. For Lufthansa Technik, the goal will be to extend the reach of its A380 servicing without having to build hangars of its own in other countries. "Maybe Lufthansa Technik doesn't have to directly take care of its client A380s outside of Germany," said D�nhaupt. "Maybe other A380 owners in Asia and the Middle East can help us to keep our clients served, and vice versa." -- By James Careless