STEWART PENNEY / ST ATHAN
Defence Aviation Repair Agency chief executive Steve Hill discusses the competitive challenge it will soon face
The UK's military maintenance specialist, the Defence Aviation Repair Agency (DARA), is in the final countdown to the time when it will have to compete for all Ministry of Defence contracts. In its last few months of grace, it is striving to drive down costs and to create a foundation to build on.
DARA was formed in April 1999 when the MoD rationalised the aircraft maintenance organisations operated by the Royal Air Force and Royal Navy.
The competitive process has already begun and DARA is now in the process of bidding for BAE Systems Hawk T1 advanced trainer repair and overhaul work.
In addition to bidding against other maintenance specialists, the agency is increasingly facing competition from original equipment manufacturers (OEMs), many of which see logistics services as a means of keeping highly skilled workforces employed when there are few new aircraft to build.
As well as open competition, DARA is faced with other harsh realities. Today, the UK operates fewer military aircraft - fixed- and rotary-wing - and those that it does have and is acquiring are more reliable, so require less maintenance. "The volume of work is generally falling, that is self-evident," says DARA chief executive Steve Hill.
If it is to survive, DARA must "maintain its existing customer base and get into wider markets", says Hill. It has already started to work with OEMs, signing deals with Boeing and securing engine overhaul work from Honeywell and Rolls-Royce, among others. But it is another market that may provide its greatest opportunities. "Getting into the commercial market is the key," says Hill. "We're seeking partnerships to start working in commercial markets."
Initial partners will be organisations with the relevant civil certification, he adds. DARA is JAR145 (the European regulations governing repair and overhaul organisations)-approved at two of its sites, but not for fixed- or rotary-wing aircraft. Hill says DARA has also held talks with Airbus, which uses "franchisees" offering support.
Alongside its attempts to move into the commercial world, DARA also needs to shrink its costs. A major initiative at its St Athan headquarters, near Cardiff, Wales, aims to reduce the size of its overheads, principally by shrinking to 10% of its 405ha (1,000 acre) footprint through the Red Dragon project. Hill says DARA has already rationalised its business, "removing duplication" as well as cutting staff numbers. "We have fewer people, but more output."
A major gap in DARA's capabilities is design, "but we are doing that in partnership with the OEMs", says Hill. Partnerships and joint ventures are a recurring theme of his strategy. Other partnership opportunities arise from DARA's discussions with overseas companies wanting to supply aircraft to the UK.
It has talked to Italy's Aermacchi and Switzerland's Pilatus, which are respectively offering the M346 and PC-21 for the Military Flying Training System programme, as well as contributing to Rand's study for the MoD into a possible UK production line for the Lockheed Martin F-35 Joint Strike Fighter (Flight International, 6-12 May).
The MoD now typically incorporates at least the first five years of new aircraft support in its procurement contracts. This contractor logistics support (CLS) gives the OEM a toehold in the equipment's through-life support and potentially threatens DARA's future. Hill is aware of the threat, but says DARA already has over 20% of the support contracts for the Eurofighter Typhoon. "[Eurofighter partner company] BAE and others recognise our skills and capabilities," he says.
To ensure the organisation can offer more support, it is moving towards providing its own CLS capability, adding value by managing the supply chain. "Customers want availability control, not a garage," says Hill. Modern contracts require a number of aircraft to be available for operations, and customers no longer wish to simply hand over aircraft for an x-thousand-hour service, he adds.
DARA has an early opportunity to prove it is moving in the right direction. It is competing to retain its work on the Hawk, an aircraft that DARA and its RAF predecessors have supported since the mid-1970s.
Hill is naturally cautious about revealing the scope of DARA's bid, but describes it as "innovative" and says the organisation has created a documentation system for the Hawk that is "unique and will have a significant impact on the aircraft's maintenance".
He says DARA's years of experience with the advanced trainer make it a "low technical risk and low compliance risk" bid. "We can become the CLS provider for legacy aircraft," he adds.
One element in reducing risk is DARA's investment in its future workforce by training 100 apprentices a year, says Hill. "This investment is risk reduction as skilled aircraft people are a major shortage in the UK," he says. Training is another area in which Hill has entered into a partnership, linking with North-West Training to open a school near its Sealand avionics repair base.
DARA knows it must reduce its reliance on the MoD, which means a new reality for an organisation that once had the cushion of guaranteed government work. "The future is a demanding and competitive marketplace," says Hill.
Source: Flight International
