Engine overhaul shop Aero Norway has carved a niche as an independent CFM56 support specialist – a role the company plans to assume for CFM International's Leap powerplants from 2020.
The Stavanger-based outfit started life as Braathens' engine shop, and then became a wholly owned Pratt & Whitney subsidiary until it was closed by the US manufacturer in 2012, only to reopen with new investors the next year.
In withdrawing, P&W cited concern over surplus capacity in the CFM56 overhaul market. But arguably, the shop would sit oddly within the P&W network of today. The manufacturer's overhaul joint ventures with airlines in China, New Zealand, Singapore and Turkey, plus its wholly owned MRO shop in the USA, all service its own engines or those of its OEM joint ventures, albeit that some offer CFM56 services too. But under P&W ownership, Norwegian Engine Center – as it was then known – never developed capabilities for its parent's products.
Its 2013 reopening followed its acquisition by Bahrain-based Aero Gulf Group, aided by investors from Dubai and Qatar. Under the name Sola Engine Center, it restarted overhauls in 2014. Its current owner, Qatari businessman Tariq Al Jehani, acquired the business in 2015.
The shop serviced 30 engines in 2014, says general manager Glenford Marston, and the per-annum figure had doubled to 64 by 2016. This year, Marston forecasts, the shop will handle 80 engines. Aero Norway employs a staff of 136.
CFM56-3 engines – which power Boeing 737 Classics – account for around 70% of volume today. The balance is split between CFM56-5B and -7B engines, which respectively power Airbus A320ceo-family jets and 737NGs.
Marston targets parity between the CFM56-3 and CFM56-5B/7B from 2018. But he notes a resurgence of CFM56-3 shop visits as operators continued using 737 Classics for longer than planned amid lower fuel prices and, in a volatile economic environment, risk aversion.
By Marston's estimate, only 15-20% of CFM56 shop visits are available to independent service providers as most engines are either covered by aftermarket agreements with the manufacturer or supported by airline-associated MRO facilities such as Air France-KLM's maintenance division and Lufthansa Technik.
He believes airline-associated MROs can negotiate more favourable terms because their parent carriers are the OEMs' customers. Independent shops "don't get any kind of rebate" from OEMs, says Marston.
Furthermore, airline-associated MRO can avail of scale economies. The parent fleets provide a baseload, and surplus shop capacity can be used to serve third-party customers.
Aero Norway thus needs to differentiate itself by providing customers with more customised service and flexibility, says Marston. He argues that large overhaul shops are geared up to support large fleets and lack flexibility to focus on individual client requirements. "The small customer doesn't get a fair deal," he says. "You are not going to get the same treatment as you would coming to an independent shop, because all my customers are [treated as] Number 1, whether you have one aircraft or 20 aircraft."
About two-thirds of powerplants processed at Aero Norway have their high-pressure compressor and turbine system disassembled. The rest involve lighter tasks and create less than $700,000 revenue each.
In 2016, the company generated a turnover of $44 million.
Marston says Aero Norway's business since the reopening has developed "much better than I actually thought". This reflects longer-than-expected service of 737 Classics, but also the balance of quality, efficiency and flexibility, he argues. "Pratt brought a lot of great processes and left it here... The only thing they didn't have and which held them back [is], they didn't have any flexibility." This he labels "OEM arrogance".
With CFM56-3 shop visits set to decline, Aero Norway aims to service Leap engines from 2020. There have been preliminary discussions with CFM about expanding capabilities to the new engine generation. But Marston says the shop is still evaluating investment requirements and market potential.
One option to ease access to repair licences and technical data might be to partner with an airline that operates Leap engines. "If that's the only way we can get there, we have to," says Marston. He is confident, however, that Aero Norway will support the new generation in future. "It is a CFM shop and it will remain a CFM shop," he says.
Source: Cirium Dashboard
