MARK PILLING
Volvo Aero believes it could soon start moving into making core engine components for the big three engine manufacturers.
Up until now, the original equipment manufacturers (OEM) have viewed their core engine technologies as proprietary, and kept them to themselves.
However, Volvo Aero president Fred Bodin says: "These proprietary rights will not be as much of an obstacle as before, and we will have more opportunities to get into more core parts.
"Volume is the key. A company like Volvo can very well do the same components for all three OEMs and obtain a high volume [of business] that results in lower costs to the OEM.
Independence
"This explains why we want to be at the level we are," he says, adding that if Volvo took a "step up" and tied itself to one OEM it would lose its independence and possible economies of scale of working for several manufacturers.
"We have had discussions with all OEMs. There is mutual understanding of the need for volume."
Volvo's engine component business accounts for 45% of its revenues, with aftermarket services making up the rest.
This area has taken a much bigger hit after 11 September, in particular its business in overhauling Pratt & Whitney JT8D Standard engines, many of which are found on older aircraft types that have been grounded or retired early.
Despite this, Volvo will continue with its JT8D and JT9D work but it is examining which engines will replace these, says Bodin.
High-selling
It already has the licence and tooling to overhaul the PW4000, while other engines under consideration are the high-selling IAE V2500 and CFM International CFM56 families.
A new type could be in place by 2005, depending on business conditions.
One of the most appealing routes of bringing a new engine on board is to work with an airline to take over its own engine shop, or to establish a partnership, says Bodin.
The pressure for airlines to consider out-sourcing maintenance is more acute than ever, especially in Europe, as mainline carriers look to cut costs in the face of ever-increasingly competition from low-cost airlines, he adds.
Source: Flight Daily News
