Fresh from the groundbreaking of its new engine maintenance facility Canadian MRO StandardAero is examining an expansion into maintenance of engines larger than the those it currently maintains that power regional and business aircraft.
Among the engines StandardAero maintains for commercial aircraft include the GE CF34 powering Bombardier and Embraer aircraft and Rolls-Royce AE3007s supplied on 50-seat Embraer ERJs.
Once completion of the 800,000 sq ft expansion at StandardAero's Winnipeg facility is complete engine throughput should double, Robert Mionis, CEO of the MRO's parent company DAE Engineering and Manufacturing, tells ATI.
Mionis explains StandardAero is evaluating the business case of moving into larger product offerings, noting the compound annual growth rate of the CFM56-7 engines is around 21% for the next five years.
"We hope to make an announcement within the next three months," the CEO says, adding that the placement of some -7 engines in their current operating cycle could produce robust growth from an MRO perspective.
Snecma Services, which opened its Snecma America Engine Services facility in Queretaro, Mexico earlier this year, hopes to offer maintenance on CFM56-7Bs by late 2009.
Elements included in StandardAero's evaluation of the business case to enlarge its engine maintenance offerings are tooling and equipment, including potentially purchasing a test cell. The company would likely start offering maintenance on large engines roughly a year after announcing its intent to enter that business, says the DAE executive.
Mionis dismisses any overlap in StandardAero's foray into large engine maintenance with another wholly-owned subsidiary of DAE SR Technics, who also performs CFM engine maintenance.
Since both MROs are located in different geographical regions Mionis doesn't foresee a conflict and envisions some sharing of resources between the two companies.
As a decision nears on StandardAero's engine maintenance offerings Mionis explains that the company is in the heart of evaluating the company's overall strategic plan. Last year DAE purchased StandardAero and business aviation provider Landmark Aviation for $1.9 billion, and the two companies now operate under the StandardAero brand.
Emerging markets of the Middle East, Latin America, the Asia-pacific and India all look attractive to StandardAero. That growth could occur organically, through an acquisition or with the establishment of joint ventures.
StandardAero has no plans to develop extensive airframe maintenance capabilities, as Mionis explains excess capacity exists in that particular aspect of the maintenance business worldwide, and in general, airframe work produces lower margins. Most companies choosing to enter into airframe maintenance are opting to do so in low cost countries, he notes.
On 7 August StandardAero won new business from Mexican Bombardier CRJ200 operator ALMA for maintenance of the CF34-3B1s powering the aircraft and for 36 auxiliary power units.
While new business is always tough to predict, StandardAero does not foresee any new CF34 deals being announced before the end of the year, says Mionis.
Source: Air Transport Intelligence news
Source: Air Transport Intelligence news
