Now an independent company, this MRO plans to double its capacity, taking full advantage of a favorable geographic location. We sent our editor at large, Dave Jensen, to Turkey to learn about their plans for growth.

Asked how his company can successfully compete against Europe’s long-established MROs and the Middle East’s up-and-coming, well-invested MROs, Dr. Ismail Demir gives an answer one might describe as typically Turkish. "We can provide European quality at prices comparable to the MROs in the Middle East," replies the general manager of Turkish Airlines (THY, from the Turkish spelling Turk Hava Yollari) Technic Inc.

THY Technic, Demir believes, is positioned to benefit from the best of the MRO markets in both continents: Europe’s aviation experience and Asia’s market growth. It’s an understandable viewpoint from someone living in a country that is the gateway between Europe and Asia and, as a result, can boast some 200,000 overflights annually. Indeed, THY Technic’s headquarters and main facility at Yesilkoy Ataturk International Airport are a short drive from the narrow Bosporus Strait, which separates the European part of Turkey from the Asian part in the country’s principal city of Istanbul. Most of Turkey is in Asia Minor, but the Texas-sized country (larger than all European nations) long has been an associate member of the European Union and entered full-membership negotiations in 2005.

Likewise, THY Technic has European Aviation Safety Agency (EASA) Parts 145 and 147 approvals, covering repair station maintenance and training, and plans to gain Part 21 Subpart J (design organization approval, or DOA) certification through a bilateral agreement. The company’s initial target is the capability of approving its own designs for minor cabin interior changes. When the agreement is signed, Turkey’s civil aviation authority will audit THY Technic; then EASA, in accordance to the agreement, will accept the DOA granted by the Turkish authority.

"More than 90 percent of our technicians are [Part 66, Cat] B1 or B2 licensed, another way of showing we can compete and offer quality," Demir adds.

Growth and Independence

How much THY Technic capitalizes on its cross-continent wlocation may be arguable, but the MRO’s financial growth and plans for expansion are not. Its revenue increase has been steady and impressive over recent years, escalating from $300 million in 2006 to $350 million in ’07 and to a projected $400 million this year. Its major, third-party customers include most (about 15) of the domestic carriers — Pegasus Airlines, with about 15 B737s and more on order, is the largest — and about 30 foreign customers, including Lufthansa and Lufthansa Technik, SR Technics, Bulgaria Air, Air Moldova, TAP-Portugal, Air One, German Wings, Mahan Air, KLM and Ariana Afghan Airlines.

What’s more, THY Technic has just completed its first year as an independent company, separate from Turkish Airlines, the country’s principal carrier, and is set to launch an expansion program that will essentially double its capacity. Combined with partnership agreements with OEMs, these developments place THY Technic in an advantageous position, geographical and otherwise.

THY Technic can attribute part of its growth to the fleet expansion of its principal customer, Turkish Airlines. The 75-year-old airline operated 60 aircraft in 2004; it now has 103 aircraft and another 17 are planned for delivery soon. Turkey’s flag carrier flies most of the Airbus models, from the A319 to the A340, along with Boeing 737s.

Since many of its third-party customers operate the same aircraft, THY Technic can provide them with full maintenance support. "There aren’t many 757s, 767s and 747s in our market area," says Demir. He considers THY Technic’s market reach to be within 3.5 flying hours from Istanbul, which covers much of Europe, the Middle East and northern Africa, some 55 countries in all.

The Turkish MRO provides full support to all Airbus aircraft, except the A380, and the Boeing 737. "Years down the road, we’d like to work on the 787," says Demir.

Currently, 15 – 20 percent of THY Technic’s maintenance work is for third-party customers. However, now that his company is an independent MRO, Demir’s goal is to achieve a 50-50 workload, with half for Turkish Airlines.

Turkish Airlines’ board of directors first discussed recasting THY Technic as an independent company in 1989. Some eight years later, it conducted a feasibility study, the results of which encouraged THY Technic’s self-direction, beginning May 23, 2006.

"Now we can schedule better and plan better because we treat all of our customers, including Turkish Airlines, equally," says Demir. "Before becoming independent, we were not using our facilities efficiently." Equal treatment also benefits THY Technic’s marketing efforts because third-party customers feel "more comfortable" having an independent MRO satisfy their maintenance needs. However, Demir acknowledges that becoming an independent company did entail a "culture change" internally.

HABOM

Growth in maintenance activity has THY Technic at full capacity, which is why the company plans to expand operations and establish an international MRO center in a program called HABOM (an acronym that stands for maintenance, repair and overhaul facility, in Turkish). Expansion will not be at Ataturk International, but at Istanbul’s other commercial field, Sabiha Gökçen International Airport, about 43 miles away. Turkish Airlines operates out of both airports.

(Interestingly, Yesilkoy Ataturk Airport, on the European side of Istanbul, was named after the Republic of Turkey’s revered founder and first president, Mustafa Kemal Ataturk, and Sabiha Gökçen International, on the Asian side, was named after Turkey’s first female aviator and the world’s first female combat pilot, flying for Turkey’s air force in the late 1930s. Yesilkoy is an area just west of Istanbul.)

"We selected Gökçen Airport because this [Ataturk] airport is full, and what land is still available is expensive," Demir explains. Ataturk is one of the world’s top 40 airports, taking in 730,000 tons of cargo and 25 million air travelers in 2007. "Also, the government plans to make Gökçen a hub for advanced technology, and Turkish Airlines Technic will be the first major company to be its occupant." A new terminal also is planned for Gökçen Airport.

Like its break from Turkish Airlines, planning for the HABOM project called for a feasibility study. It noted the trend in maintenance outsourcing and a market demand for a full-service provider for both widebody and narrowbody aircraft. The study no doubt also took into account Turkish Airlines plans to place 59 new-aircraft orders within the next few years and become one of the top 10 carriers in the global market, eventually with more than 300 planes in its fleet.

Also supporting THY Technic’s plans at HABOM are partnerships the company has formed with OEMs. In November 2007, the MRO signed a memorandum of understanding (MoU) with Goodrich Corp. to form a joint venture, Goodrich HABOM, and establish a certified repair station at Gökçen Airport. In a 43,000-sq.-ft. (3,995-m ²) facility the new entity will repair engine nacelles and thrust reversers. It will provide maintenance and rotable support for Turkish Airlines’ Airbus and Boeing aircraft, as well as for the fleets of other carriers in the region. The repair center is scheduled to open in 2009.

In January THY Technic signed a joint-venture agreement with Pratt & Whitney (P&W) to establish the manufacturer’s eighth commercial engine overhaul center. (P&W’s seventh engine center, in Shanghai, will be operational this year.) Also located at Gökçen, the Pratt & Whitney Turkish Technic Aircraft Engine Maintenance Center will support CFM56 and V2500 powerplants. A site has been selected and construction is to be completed in time for the first engine’s induction, in 2009.

THY Technic currently offers full support of the CFM56-3C/5C/7B, as well as the GE CF6-80A3/C2 and Honeywell LF507-1F engines. The company will add the IAE V2500 to the list of overhaul and repair capabilities when the new Turkish center opens.

"We currently overhaul about 70 engines a year," Demir reports. "In three years, we plan to overhaul as many as 200 annually and then double that number in five years."

THY Technic estimates investing $200 million in HABOM and expects to generate from the facility a $500-million share from a target market of $15 billion within a couple of years. The company will move its heavy maintenance activity to the new facility, leaving lighter maintenance — A-checks, light C-checks and line maintenance — at its current facility in Ataturk Airport. "We also will move our headquarters to Gökçen Airport because the work there will require more management," says Demir.

Two hangars will be built for HABOM: one will accommodate three widebodies and the other, up to nine narrowbodies. THY Technic’s engine test cell will be moved to Gökçen, as well. The company’s initial plan was to build HABOM in two stages but because of a 1-year delay in launching the project, the stages have been combined. Groundbreaking is scheduled to take place in October, and the new facility’s completion is expected in late 2009.

The capacity at HABOM will almost mirror that of THY Technic’s existing facility at Ataturk International. Hangar one, built in 1987, has 270,000 sq. ft. (25,000 m ²) of enclosed space that can take in up to two widebody and three narrowbody aircraft. Hangar two, built in 2000, covers close to 645,900 sq. ft. (60,000 m ²) and can accommodate up to three widebodies and four narrowbodies. Hangar two is equipped with two telescopic platforms that allow access to the aircraft from all sides and a curtain system that converts part of the building into an environmentally controlled paint facility. In back of hangar two, on upper floors is THY Technic’s headquarters and Dr. Demir’s office.

The THY Technic campus also includes back shops, a ground equipment shop, pneumatic shop, power station, scrap depot, chemical depot, employee dining hall, medical center and training facility. Across the airport — and seldom mentioned for security purposes — is another hangar in which THY Technic maintains three government aircraft, an A319 for Turkey’s president and prime minister, and two Gulfstream IVs for other official government use.

Keeping Staffed Up

Demir says that through greater efficiency THY Technic has been able to accommodate more work without increasing its staff of more than 3,000 employees. But with the HABOM expansion project plus the company’s goal of building up its in-house design and engineering, the staff must grow. "We plan to hire at least 150 to 200 new people every year until our needs in HABOM are fulfilled," says Demir. "There could be up to 1,000 new people hired."

THY Technic’s managing director sees no problem in achieving a qualified workforce, for several reasons. "Some of our back-shop people don’t need an aviation background," he says, citing work on composite materials as an example. For the aerospace technicians needed, Demir says THY Technic works in partnership with four technical schools in Turkey.

However, there is urgency in securing qualified technicians. "Our goal with these partnerships is to work with the schools so we can shorten the time it takes to have fully trained technicians from five years down to three years," he says.

THY Technic offers in-house training, as well. On the third floor of hangar two, its training academy has 15 classrooms and employs 20 maintenance instructors. It provides instructional modules for maintaining Airbus aircraft, several Boeing models and the BAE Avro RJ70/100, also in Turkish Airlines’ fleet.

While its training and recruitment of new employees makes no distinction regarding gender, THY Technic officials are proud of the fact that 8 percent of the company’s workforce is female.

Lean and Green

As THY Technic grows, it simultaneously works to make operations lean and green, two topics on which Demir is often asked to give speeches. To make the company’s maintenance operations more cost efficient while shortening turnaround times, THY Technic entered a partnership agreement with Boeing in January 2006.

A Boeing official describes his company’s work at THY Technic as follows: "We use the method of ‘learn by doing,’ where we teach the lean modules to their managers, technicians and engineers, and then go out to the shop floor or offices and practice using the tools where the actual work is being done. At THY Technic, we have done a number of workshops over the past two and a half years in their heavy maintenance, line maintenance, back shops, stores, shipping and receiving, engineering and planning offices."

So far, Boeing consultants have taught THY Technic employees such lean tools as an accelerated improvement workshop, value stream mapping and production preparation process. THY Technic also has designated eight of its engineers as full-time lean leaders and sent them to Boeing’s annual Fall Lean Conference.

"All departments have project leaders for the lean program," says Demir. "They make sure the departments stick with the project."

THY Technic employees are encouraged to suggest ways to make processes leaner and are rewarded if a suggestion is put into action. "Among the different processes, we’ve been able to save from 20 to 80 percent," says Demir. "Last year, our target was to reduce costs by a half-million dollars a year. We made that, but we don’t plan to stop there."

Demir offers an example of how THY Technic’s lean efforts have reduced the turnaround time on narrowbody landing gear. "We conducted a trial and found we could reduce the turnaround time from 40 days to 14 days," he reports. "Currently, we have the process down to 28 days, but we now know we can get that number down, and we plan to do so."

Since partnering with Boeing, THY Technic also has adopted the manufacturer’s Maintenance Performance Toolbox, a web-based selection of modules to improve maintenance on the B737NG and Classic. The program is meant to streamline such activities as managing technical publications and training, customizing online maintenance manuals and updating and tracking maintenance task cards.

Proud of his company’s environmental record, Demir says THY Technic is ISO 4001 certified, spent $1.5 million to upgrade its waste-treatment facility and insists on high environmental standards from its contracted, waste-receiving companies. "Also, we have an agreement with GE and give them all our turbine-blade scraps," he adds.

Offering the Gamut

THY Technic offers the gamut in aviation overhaul and repair, from line and heavy maintenance to modification work and cabin installations. Its current major modification job is a cabin retrofit for Turkish Airlines’ fleet of seven A340-311/313s.

THY Technic selected Air France Industries (AFI) to be the integrator and certificate holder for the retrofit. "Since this is a major modification, changing the aircraft electrical load and weight, an integrator such as Air France was needed to issue a SB/STC [service bulletin, supplemental type certificate] under Part 21," says a THY Technic official.

AFI completed the first two A340s in Paris, and THY Technic is in the process of retrofitting the remaining five. The Turkish company is equipped to provide a wide variety of cabin mods, from decorative lamination to textiles for seats and carpeting. It also can remove, repair and install galleys, lavatories, oxygen masks, power supply units and plastic and non-honeycomb composite parts.

Demir sees cabin modifications as an area of growth for THY Technic and also wants to enter the cargo conversion market. "We don’t do [cargo conversions] now," he says. "But we’re working with Airbus and Boeing to provide the data to do this."

THY Technic provides line maintenance services to more than 30 operators at 21 of Turkey’s 87 largely state-owned airports and 29 foreign airports (see chart). For information sharing among the line maintenance stations, Turkish Airlines’ IT group developed a web-based software solution called LIMAS (line maintenance automation system). The software includes the following modules:

• Documentation – THY Technic maintenance documents and organization manuals;

• General information – regulations, IATA publications, aircraft specs, addresses, phone numbers and other communications information;

• Inventory data for the stations – entered, updated and reported information, plus an apron vehicle tracing system;

• Station information – contacts, contracted companies and handling companies; and

• Defect trace and record system – includes job recording, tracing and reporting on line as well as minimum equipment list (MEL) records and repetitive defect recording and tracing.

Turkish Airlines’ IT group also updates LIMAS data.

Sixty percent of THY Technic’s avionics repair is in-house. Demir believes the company’s extensive, in-house capability is preferential over outsourcing a component’s repair, which would entail an additional five or so days for shipping and Turkish customs paperwork.

THY Technic’s avionics facility includes harness shops, test benches and three automatic test equipment (ATE) units: two ATEC series 6s and one ATEC 5000, from EADS Test & Services. The series 6s test equipment on the A320, A321, A330 and A340 and the B737NG and 737-400, while the ATEC 5000 is used for systems on the A310 and B737-400.

BAE Systems has certified the THY Technic ATE shop for testing electronic engine control units for CFM56-5C/5B/7B/80E engines. These full authority digital electronic control (FADEC) systems must be tested for about 16 hours, in temperatures ranging from -54 to 77 degrees Celsius.

For 30 years, THY Technic has been repairing, overhauling and testing auxiliary power units (APUs), and in 1981 it built its own APU test cell. The MRO works on Honeywell APUs and is an authorized repair station for Hamilton Sunstrand units. It overhauls about 60 APUs a year, but Demir believes that number will grow.

In addition to repair of APUs and engines, THY Technic’s managing director envisions his company’s growth in airframe repair (including composite structures), landing gear maintenance, component overhaul and parts pooling.

THY Technic appears prepared to take advantage of any MRO service needed. It has been a heavy maintenance provider since 1938, five years after Turkish Airlines was launched, and has long offered full array of services. In short, THY Technic appears be well positioned market-wise as well as geographically.

THY Technic’s Line Maintenance Stations Country Number of Stations Austria 1 Azerbaijan 1 Belgium 1 China 2 Denmark 1 France 1 Germany 6 Israel 1 Japan 1 Kazakhstan 1 Kosovo 1 Kyrgyzstan 1 North Cyprus 1 Netherlands 1 Russian Federation 1 South Africa 2 Saudi Arabia 2 Switzerland 1 Syria 2 Thailand 1 Turkey 21 Turkmenistan 1 United Kingdom 1 United States 2 Uzbekistan 1