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Top 10 MROs Worldwide Unveiled

Ranking the world’s largest MRO providers in Aviation Week Network’s popular biennial survey.

Lee Ann Shay | May 22, 2017

The nuances of our biennial Top 10 MRO Airframe Survey are indicative of the complexities of the commercial aviation aftermarket. In this year’s survey, based on 2016 results, the two largest airframe MROs—Asia-based Singapore Technologies Aerospace and HAECO Group—remain far ahead in maintenance manhours (see table below), but their overall revenue is less than half that of European MROs Lufthansa Technik (LHT) and Air France Industries-KLM Engineering & Maintenance (AFI-KLM E&M). 

LHT’s and AFI-KLM E&M’s MRO portfolios include a greater amount of higher-margin engine and component work. Even though some companies did not reveal their 2016 revenues, it would be surprising if any of the others manage to surge ahead of those two. 

Given airlines’ desire for more integrated engineering and MRO packages, if MROs were ranked strictly by total MRO manhours instead of by airframe-related work hours, HAECO would top that list, based on the information shared with Inside MRO. That total work-hours metric can be a harder barometer to use for making comparisons, however, because aftermarket service providers do not always measure component and engine maintenance work by manhours.

The World’s Top MRO Rankings

• ST Aerospace, LHT and HAECO top the list
• Ranking differs if total versus airframe-only revenues are considered
• Mergers and consolidations continue to change the rankings

And for the first time, MRO Holdings, a company formed in 2013, appears in fourth place, behind AAR, after buying Aeroman and Flightstar Aircraft Services, which ranked No. 11 and No. 13 in our last survey (2015, based on 2014 data).

Looking ahead, it would not be surprising to find MRO Holdings ranking even higher, because on May 1, it finalized an agreement with Delta TechOps and Aeromexico to have exclusive access to TechOps Mexico’s capacity for the next 10 years. By adding that Aeromexico and Delta Air Lines airframe MRO work to its portfolio, MRO Holdings would become the world’s third-largest airframe MRO if other service providers do not consolidate in the interim.

Some of the highest growth is being seen from MROs in the Asia-Pacific region, including Gameco (Guangzhou Aircraft Maintenance Engineering Co.), which increased airframe maintenance manhours in 2016 to 2.8 million, compared to 1.1 million in the survey two years before, and total MRO manhours to 5.2 million from 2.9 million.

Looking Ahead

The MROs in our survey have robust growth plans.

ST Aerospace plans to increase capacity in Asia and in the U.S. It recently opened its second hangar in Guangzhou, where Gameco is based, which can accommodate two widebodies and two narrowbodies simultaneously. “With the new hangar, which has 500,000 manhours in capacity when it reaches steady state, the Guangzhou facility will be able to have 1 million manhours capacity in total,” says Serh Gee Lim, ST Aero’s president.

HAECO does not plan to add capacity but is gearing up to perform its first Airbus A350 C check this year. It expects cabin integration, seats and interior projects to generate most of its growth over the next few years.

Top 10 Airframe MROs

AAR opened a 289,000-ft.2 hangar in Rockford, Illinois, its sixth facility in the U.S., which gives it increased widebody aircraft capacity as well as space to expand Embraer EJet support. It also expects growth from “additional work on cargo aircraft and some widebody aircraft platforms that we have not typically serviced previously,” says Dany Kleiman, AAR’s group vice president for MRO services.

MRO Holdings CEO Greg Colgan says Aeroman is conducting ramp work to prepare for a new hangar, its sixth, at San Salvador Airport in El Salvador. The new hangar, which could be open as early as next year, will be identical to the fifth, opened in 2015, which can accommodate eight or nine narrowbodies or three or four widebodies. Aeroman operates up to 20 production lines.

Colgan says Aeroman also could add a seventh hangar sometime after 2020 if market conditions make sense. That hangar would probably be a bit smaller.

MRO Holdings, which purchased Flightstar in September 2016, is “investing in people and processes,” Colgan says, and is exploring various options for growing the Florida-based MRO provider.

Lufthansa Technik plans to add engine capabilities through engine joint ventures with General Electric and MTU. XEOS, the joint venture with GE, will provide maintenance services for the GEnx-2B and the GE9X. XEOS is scheduled to open in Poland in September 2018. The other engine joint venture, with MTU Aero Engines, will provide MRO services for the Pratt & Whitney PW1000G family. The companies hope to have it set up by 2020. In addition to engines, expect LHT to generate most of its growth from components, base maintenance and modifications, and digital services, such as Aviatar, part of the MRO’s new Digital Fleet Solutions launched in April.

Similar to LHT, AFI-KLM E&M is targeting engines and components for future growth and is pursuing additional joint ventures. In early 2018, it is scheduled to open a joint venture with Safran dedicated to repairing CFM56 and GE90 engine compressor blades. It also continues to innovate through its MRO Lab, which develops MRO solutions for next-generation aircraft. Prognos, a predictive maintenance tool, is one.

Ameco, reestablished in 2015 through the merger of the Air China Technics and the original Ameco Beijing partners (Air China and Lufthansa), plans to add new MRO capabilities for new-generation aircraft and engines, asset management, and Airbus and Boeing corporate jet MRO.

Gameco, also in China, expects its largest MRO growth to come from landing gear, component and cabin refurbishments in the next  few years. It plans to start operating a new landing gear facility capable of up to 150 shipsets in 2017, says Norbert Marx, Gameco’s CEO and general manager. The MRO opened an additional Airbus A330 base maintenance line in Shenzhen in February. Marx says China Southern Airlines generated 1.7 million of its airframe maintenance manhours in 2016 and third-party customers contributed 1.1 million manhours.

ATS is focusing investments on component repairs—for commercial and regional airlines, as well as military operators. In the past two years it has purchased Texas Air Composites, Texas Pneumatics Systems and Aviation Industry Repair and is evaluating other acquisition targets.

Turkish Technic also is focusing on component service expansion, as evidenced by a five-year contract with Safran Electrical & Power signed in April to maintain electrical equipment in Airbus A320s and A330s in the region.

Other Players

While they did not make the Top 10 list, other MROs across the world have strategic plans that also are worthy of note.

For instance, Evergreen Aviation Technologies (EGAT) has expanded significantly in the past two years, growing to 4.1 million MRO manhours in 2016 from 2.2 million in 2014 and increasing revenue to $850 million from $465 million two years prior.

The Taiwan-based MRO plans to start three production lines for the Boeing 767BCF conversion and recently launched Boeing 787 airframe maintenance for third-party customers. EGAT, which began All Nippon Airways’ first 787 C check in March, also expects growth from its GEnx overhaul capability.

GMF AeroAsia almost made the list as well, with 1.95 million airframe MRO manhours in 2016, plus 1.7 million from line-maintenance activities, which we exclude from airframe MRO manhours. Its 2016 revenue climbed 27.2% over the previous year, to $388.7 million. It anticipates growing that revenue this year by 16.9% and plans to develop capability for the Boeing 737MAX, A320neo, 787 and A350.

Mexicana MRO generated 1.4 million airframe MRO manhours and 1.7 million total MRO manhours in 2016, which translates to $56 million in revenue, says Marcos Rosales Gomez, director general and CEO. Mexicana anticipates adding 767 passenger-to- freighter conversion, 787 maintenance (including composites) and component repairs to its capabilities.

Bedek, in Israel, performed 580,000 airframe manhours in 2016 and is also looking at adding capabilities for new aircraft types such as for the A350 and 787.

Costa Rica-based Coopesa generated 565,00 airframe manhours last year and earned $33 million in revenue. It plans to add another narrowbody line and expects lease-return services, interior modification and painting services to be some of its biggest growth opportunities.

In Asia, Air India Engineering Services increased its 2016 revenue by 15%, to $111 million.

KF Aerospace in Canada increased revenue by about 10% year over year and forecasts a 15% increase in airframe-related manhours this year, to 875,000. It also anticipates increased business from work on cargo doors and aging aircraft MRO.

LOT Aircraft Maintenance Services in Poland tallied 600,000 MRO manhours last year.

Slovenia-based Adria Tehnika and Linetech recorded 360,000 manhours in 2016, 300,000 of which were for airframes, and plans to “increase training, line maintenance activity and add a new type, perhaps the A320neo plus others,” says Mirjana Ceh, deputy CEO. She anticipates A320 maintenance and modifications, such as cabin reconfigurations and connectivity projects, to be bright spots in the business.

In Lithuania, FL Technics generated €92.5 million ($101 million) in total revenue in 2016, from about 422,000 airframe manhours. 

MROs Are Investing In IT

■ Lufthansa Technik, which launched Aviatar in April, is focused on digitization for better customer service and for improving predictive maintenance.

■ ST Aerospace is “investing in ‘smart factory’ initiatives to digitize and streamline our MRO work processes,” as well as “starting to adopt Internet of Things-enabled capabilities in 3D printing and data analytics to optimize our operations and to lower costs and turnaround times,” says ST Aerospace President Serh Gee Lim.

■ HAECO’s Line Services Mobility application gives frontline staff an integrated communication platform through mobile devices regardless of type. Compatible across multiple platforms, this app enables viewing of flight information, staff assignments, notification of flight changes and weather alerts, real-time resources such as parts and tooling, and work status.

■ AAR, which has been a forerunner in data analytics investment, expects “predictive processes based on data analytics” to deliver “high-quality maintenance checks based on customer requirements for time frames,” says group Vice President Dany Kleiman.

■ EGAT plans to deploy the Swiss Aviation Software AMOS maintenance system to reduce overhead manhours and start using remotely driven portable tugs.

Standing Up Services

Boeing isn’t the only one betting on a new, aftermarket-focused business unit.

Sean Broderick | May 23, 2017

As OEMs eye sleeker supply chains at the front end and bigger slices of the aftermarket pie at the back, component makers find themselves uncomfortably in the middle.

Efforts like Boeing’s Partnering For Success (PFS), which seek lower costs on new parts and, in some cases, aftermarket-sales rights from beholden suppliers, have many suppliers wondering if there is room left for them to boost revenues.

Meggitt, which supplies everything from brakes to smoke-detection systems for civil and military aircraft, believes it has a plan. The company last year stood up its Customer Services and Support (CSS), a dedicated aftermarket organization covering all of the company’s aerospace products. While it will honor that scope, its business development focus is in three areas: control systems, sensing systems, and the commercial part of its polymers and composites business, which draws interest from manufacturers looking to trade metal for lighter, aerospace-grade materials.

These, explains CSS President Lorraine Rienecker, are the areas “that have been most impacted by recent headwinds,” notably the rise in used serviceable materials (USM) demand and component pooling. Meggitt has been holding its own; its commercial aftermarket revenues totaled $750 million last year, up 5.4%.

But Reinecker believes the company can do better still, and a focused CSS strategy holds the key. Among the objectives: boost its surplus-parts business to claim a 25% share of the Meggitt USM market, and cut itself in on long-term component support deals that airlines are craving. Meggitt has two agreements with Airbus to support the OEM’s Flight Hour Services programs, and recently struck long-term deals with Emirates, Air France and VietJet, with more agreements poised for signatures.

Meggitt also is eyeing deals with third-party integrators, "including how we can work together to help the airlines improve their operations and explore new commercial relationships,” Reinecker says. The supplier would like at least three such deals, and reports that one is at the MOU stage.

"This is not only an important aspect of supporting our customers and finding new ways of improving operational efficiency, but it is also important revenue and cost-saving opportunity,” she told analysts at the company’s recent capital markets day. "By getting closer to our end customers, the airline operators, we're gaining better insight into their operations and access to the performance of our products in the field.”

The near-term upshot: 4-6% growth for the group's commercial aftermarket, Reinecker says. Down the road? “A [growth] level sustainably above that of the wider components market.” 

Airbus and Boeing probably know more than anyone about the products they build. But it’s easy to forget that those products feature many complex systems designed by suppliers. 

Meggitt’s is particularly well-postioned: it has content on nearly every aircraft flying (including multiple systems the Comac C919), generates 75% of its revenues from sole-source, life-of-program offerings, and has a balanced 55%-45% revenue split between original equipment and aftermarket. 

Combining this sort of knowledge with a focus on the most important commercial customer base of all—the airlines—could present too much opportunity for even PFS to snuff out completely.