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Monday, September 1, 2003

Maintenance in the United Kingdom

Thierry Dubois, European Contributing Editor

The maintenance industry in the United Kingdom is experiencing tough times, as in the rest of the world. To survive, not all companies use the same recipe. Some concentrate on their core business. Others prefer to keep a broad range of service offerings. There are also those who rely on innovative services to their customers. But the common trend is toward downsizing the workforce, although exceptions exist.

FLS Aerospace

At FLS Aerospace, the priority is to do what it takes to survive, said Mary Mannion, head of communications. This means, she added, "we have to keep the business we have." The company has simplified its business. "We look after our key customers," she said.

This is done in accordance with a core portfolio that includes, on the widebody side, the Airbus A330/A340, the Boeing 767 and the 757 [in FLS’s widebody category although it is a single-aisle aircraft]. On the narrowbody side, FLS services the Airbus A320 family and the Boeing 737, the latter both in its classic and next-generation variants. "We put less of an emphasis on the 747 and the 727 in heavy maintenance, as we are trying to focus on newer models," Mannion said. On the other hand, these relatively older Boeings provide FLS with significant work for its modification business.

Revenues in 2002 stood at $369 million, down by $40 million against 2001. Due to the current crisis, workforce was down by 440 to 500 people at the end of last year–compared to December 31, 2001–at 3,150 people. Another consequence of the downturn was "our writing off some $9 million in consumable parts," she said. Some 500 aircraft are serviced under long-term contracts, the same number as one year ago.

In late 2001, FLS formed a joint venture with MyTravel Airways. The new, Manchester-based entity is called MyTravel Aircraft Engineering. "Two hundred of our staff were transferred to the joint venture, which handles line and light maintenance for MyTravel with associated maintenance control," Mannion explained. Separately but still at its Manchester facility, FLS is in charge of heavy maintenance work for MyTravel and has a nose-to-tail contract with FedEx. These activities saved 140 additional jobs but could not prevent the closure of some "excess hangar capacity." Since September 11, 2001, approximately 280 people left the Manchester facility and 340 jobs were saved, Mannion said. In November 2001, FLS announced that 620 jobs at the Manchester facility were "at risk."

The Manchester hangar was not the only one to be disposed of since September 11. Another one was sold in Copenhagen in March, with 110 employees transferred to the buying company, Northstar Aerospace. And the smaller hangar of the Stansted facility was closed. "We are tightening up," Mannion emphasized. Still, the spokeswoman is optimistic for 2003 and 2004. The events that plagued the last 24 months were exceptional, she said.

A priority for 2003 is now ensuring that the implementation of a single computer enterprise resource program for the whole company will be successful. In future, the modification business could be a growing one. "Airlines all want to have the best cabin and the latest in-flight entertainment system," Mannion said.

Rolls-Royce Engine Services

At Rolls-Royce Engine Services, the good penetration of the parent company’s engines on the market should help it weather the crisis. Mike Terrett, Rolls-Royce’s president for civil aerospace, said in a Paris Air Show briefing in mid-June that the hours flown by Rolls-Royce-powered aircraft were up by 7 percent in 2002. This is in contrast with a 2-percent drop globally.

In addition, the average age of the in-service fleet is eight years for Rolls-Royce engines versus nine for General Electric and 18 years for Pratt & Whitney, according to Terrett. This means "our aircraft are less vulnerable to grounding and they are still flying," Jim Sheard, Rolls-Royce Engine Services director of marketing, told Aviation Maintenance in early July. Less than 20 percent of the aircraft parked in the desert are said to be equipped with Rolls-Royce engines.

"The old paradigm of unreliable engines yielding money to the manufacturer thanks to high needs in terms of maintenance and spare parts does not work any longer for us," Terrett stated. He stressed all-inclusive schemes, such as power-by-the-hour and TotalCare, are real incentives to improve engine reliability. Setting common goals for the customer and the engine manufacturer is a way to address the fact "this industry is in a desperate need for efficiency," Terrett said.

Currently, Rolls-Royce’s TotalCare package represents 44 percent of the service business. On large engines, 60 percent of Trent customers have signed up for TotalCare, and "90 percent of our regional fleet is now covered by TotalCare," Terrett added. Emirates Airlines has all its fleet serviced under a TotalCare agreement. "We offer airlines a maximum transfer of risk and a reduced need for in-house inventory," Terrett stressed. In return, Rolls-Royce secures work on a long-term basis.

In 2007, a joint venture with Lufthansa Technik, dubbed "N3 Engine Overhaul Services," should start operations. It will offer servicing of the Trent 500, 700, and 900 engines. The latter power long-haul Airbus aircraft, namely the A330, the A340-500/600, and the A380. The European location for this $115-million facility will be chosen by 2004.

Total workforce at Rolls-Royce’s Engine Repair and Overhaul business is "close to 6,000, with little change since last year," Sheard told AM. Revenues in 2002 were $1.9 billion, a 5-percent increase over 2001’s $1.8 billion. "Our revenues have jumped five-fold since 1995, when they were close to $400 million with a workforce half the size of today’s," Sheard emphasized.

Marshall Aerospace

At Marshall Aerospace, the number of employees is said to have been steady for the past two years, at 1,500 employees. Asked how business conditions have been over the past 12 months, Mick Milne, the Cambridge-based company’s marketing director, answered, "as with all MRO facilities, they have been difficult. There was a definite pick-up towards the end of 2002, and 2003 started very well continuing throughout the first quarter. Since then anticipated programs have been canceled, as major airlines downsize their own workforce and typically are able to undertake maintenance checks in-house. We look forward to some improvement in 2003, however we believe the market will still be very difficult."

One sector looks better than the rest of the activity, though. "Larger modification programs are more encouraging and we look forward to a return to relatively normal business in the final quarter of 2003 going forwards," Milne told AM. In a way different to that of FLS, which has elected to focus on core skills and customers, Marshall Aerospace has sought to maintain its broad capability over a difficult period. "We continue to actively seek longer-term programs with blue-chip airlines, OEMs, and leasing companies," Milne added.

ATC Lasham

Smaller companies, too, are facing the downturn. ATC Lasham, a 290-employee firm, has experienced a drop in revenues from $28.3 million in 2001, a busy year, to $26.7 million in 2002. "We are coping with a large amount of indecision and delays in projects at our customers," spokesman Nigel Bruce told AM.

However, capacities have just been increased two-fold with the addition of four bays in a second site—namely London Southend airport—last fall. As a result, revenues in 2003 should increase significantly. The number of serviced aircraft this year is already at 92 versus 130 for the 12 months of 2002 and 75 in 2001.

"We are looking at offering Airbus narrowbody aircraft servicing in Southend," Bruce said. Some technicians are currently attending a training program that should allow the company to perform all kinds of maintenance up to C-checks on the A320 family. The approval is expected for this October.

Workforce in the company is already at 290 employees, versus 220 in 2002. This number should not change this fall but may ascend later. Despite the current gloomy climate in the industry, it is not easy to hire new technicians if needed, Bruce said. "This is especially true for avionics technicians, and the issue may become more important in the near future," he said.

Bruce is quite confident business will pick up soon, with airlines booking maintenance slots for their winter programs. "I see an interesting, dynamic spring with new opportunities," he added. Boeing 737s and 757s now represent the majority of serviced aircraft, as the number of 727s in service in Europe has decreased. A recent success was a contract signed in June with DHL for its fleet of 34 Boeing 757 freighters.

BMI, British Airways

Although major players in the maintenance industry in the U.K., neither BMI British Midland nor British Airways Engineering would comment on their current health. British Airways Engineering employs 9,000 people at more than 100 locations worldwide. Its core capabilities are centered on the Boeing 737, 747, 757, 767, 777 and the Airbus A320. They also include the Boeing DC-10, the Lockheed L-1011 Tristar, and the British Aerospace ATP. Supported is the fleet of British Airways but also of other airlines.

Main BA maintenance bases are Heathrow, Gatwick, Manchester, and Glasgow airports. In South Wales, three operations are dedicated to Boeing 747 and Boeing 777 maintenance, avionics, and interiors. An extensive maintenance network includes some 160 British Airways Engineering line maintenance stations established at airports around the globe.

U.K. Maintenance Demographics

  • Number of commercial air transport operators: 6
  • Number of maintenance providers:
  • Approximately 500 (this is the number the CAA is responsible for on behalf of the JAA)
  • Number of aircraft registered:
  • 1,582 (maximum takeoff weight more than 2,730 kilograms)
  • 8,246 light aircraft (maximum takeoff weight less than 2,730 kilograms)
  • 1,134 helicopters
  • Number of aviation technicians:
  • 800 license holders

Regulatory climate:

JAR recommendations from the Joint Aviation Authorities (JAA) prevail. Most engineers are licensed and are approved by the JAR 145 organization to work the relevant aircraft types. The engineers are generally split into two categories, avionics and airframe/engine. Under JAR 66, there are B1- and B2-licensed technicians, which are basically the same as the avionics and airframe/engine engineers. However, a Cat A-licensed mechanic is qualified for simple and limited tasks on the line, such as wheel changes, oil refill, etc.

Some technicians still hold "historic" licenses issued by the British Civil Aviation Authority. These technicians will have to get JAR 66 licenses by 2011.

The main issue in the near future is the introduction of the EASA (European Aviation Safety Agency) now scheduled for´┐Ż September 28, 2003. Initially, few changes are expected in maintenance regulations apart from the name at the top of the document. But the EASA will have more direct power than the JAA and regulations should evolve in a swifter manner, when required, in future.

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