Global Maintenance Repair and Overhaul (MRO) Service Providers Competition Benchmark

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MRO Industry

Competition Benchmark

January 2014

www.reyyandemir.com

[email protected]

www.linkedin.com/in/reyyandemir

+90 535 2346818

@reyyan_demir

REYYANDEMIR2014

“If you know the enemy and know yourself, you need not

fear the result of a hundred battles.

If you know yourself but not the enemy, for every

victory gained you will also suffer a defeat.

If you know neither the enemy nor yourself, you

will succumb in every battle.”

― Sun Tzu, The Art of War

Introduction

REYYANDEMIR2014

MRO competition hots up !

REYYANDEMIR2014

Who are Our Competitors?

Employee BenchmarkEmployee Benchmark

Aftermarket Competitive LandscapeAftermarket Competitive Landscape

Airframe/Engine/APU/

Landing Gear Benchmark

Airframe/Engine/APU/

Landing Gear Benchmark

Airframe Man-hour BenchmarkAirframe Man-hour Benchmark

Top MROs by Revenue in 2012Top MROs by Revenue in 2012

Business Segment BenchmarkBusiness Segment Benchmark

Facility & Hangar ComparisonFacility & Hangar Comparison

33

4-64-6

7-87-8

99

1010

11-1311-13

14-1714-17

Global MRO Investment Activities

in 2013

Global MRO Investment Activities

in 2013

Certification benchmarkCertification benchmark

Global PresenceGlobal Presence

Global Patent NumbersGlobal Patent Numbers

SourcesSources

1818

1919

20-2120-21

22-2422-24

2525

Slide # Slide #

REYYANDEMIR2014

Air Transport Aftermarket Competitive Landscape

NEW MATURE

Aircraft OEM

Engine OEM

Systems OEM

MRO Integrator

Independents

Airline 3rd Party

Aircraft Lessor

Source.

REYYANDEMIR2014

# Company Country Revenue ($m) Change

1 GE Engine Services United States OEM 6.900 -4,2% ▼

2 Pratt & Whitney United States OEM 6.312 -6,0% ▼

3 Rolls-Royce AerospaceUnited

KingdomOEM 5.577 3,8% ▲

4 Lufthansa Technik AG Germany MRO 5.177 -9,5% ▼

5Air France Industries-KLM

EngineeringFrance MRO 4.043 -7,1% ▼

6 Honeywell Aerospace United States OEM 2.947 4,2% ▲

7 AMR Corporation United States Airline 2.875 1,8% ▲

8 Goodrich Corporation United States OEM 2.447 1,0% ▲

9 MTU Maintenance Germany OEM 1.684 7,9% ▲

10 ST Aerospace Singapore MRO 1.622 5,5% ▲

11 SR Technics Holding Switzerland MRO 1.179 -5,6% ▼

12 US Airways United States Airline 1.111 0,4% ▲

13 Singapore Airlines Singapore MRO 921 -1,7% ▼

14 HAECOChina, Hong

KongMRO 752 13,1% ▲

15 Sabena Technics France MRO 613 -

16 Delta TechOps United States MRO 600 -7,7% ▼

17 Ameco Beijing China MRO 488 14,8% ▲

18 Turkish Technic Turkey MRO 468 -4,5% ▼

19 Embraer Brazil OEM 451 -31,6% ▼

20 AAR Corporation United States MRO 450 6,6% ▲

21 Timco United States MRO 255 21,4% ▲

22TAP Maintenance &

EngineeringPortugal MRO 240 9,6% ▲

23 Malaysia Airlines E&M Malaysia MRO 130 -11,0% ▼

Top MROs by Revenue/Growth in 2012

Selected Civil

Maintenance

Providers with

Airframe/Engine

Capabilities

NOTES: Revenues for airline groups

include service for in-house carrier and

third parties. Estimates have been used

where commercial maintenance

revenues are not published. SOURCE:

Airline Business research, annual

reports, US DoT form 41 and ICAO.

All changes based on US dollar figures.

Credit:

REYYANDEMIR2014

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000 Revenue ( M) in 2012

OEMs grew in aftermarket services in 2012

MRO

OEM

REYYANDEMIR2014

0

1.000

2.000

3.000

4.000

5.000

6.000 5.177

4.043

1.622

1.179

921 752 613 600 488 468

Revenue ( M) in 2012

3rd patry MRO Revenue Comparison

REYYANDEMIR2014

Total Employee Overview

02000400060008000

100001200014000160001800020000

19777

14000

9600

80006500 6000 6000

4000 3845 3250 3100 3000 30002000

Total Employee in 2012

Source:Companies’ own web sites

REYYANDEMIR2014

0

50

100

150

200

250

300

350

400

380

289

262

204 203

144 142

8175 63 60

Re

ve

nu

e/

Em

plo

yee

Revenue ( Thousand) per Employee

Revenue per EmployeeT

REYYANDEMIR2014

Total Airframe Man-hour in Million

Sabena Technics

ADAT

Turkish Technic

Iberia

Ameco Beijing

Bedek

AFI-KLM Eng.

Lufthansa Technik

Singapore Airlines

AAR Corporation

HAECO/Timco

ST Aerospace 11,5

10,6

3,7

3,9

4,1

4,25

4,6

2

2,3

2,8

1,8

1,8

Source: http://www.aviationweek.com/Article.aspx?id=/article-xml/awx_06_26_2013_p0-591584.xml

REYYANDEMIR2014

Business Segment Benchmark

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my

Lufthansa Technik ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

AFI-KLM Eng. ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

ST Aerospace ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

SR Technics ▲ ▲ ▲ ▲ ▲* ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Singapore Airlines ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ∼∼∼∼ ∼∼∼∼ ∼∼∼∼HAECO/Timco ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ▲ ▲ ∼∼∼∼ ▲

Sabena Technics ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ∼∼∼∼ ▲ ∼∼∼∼ ▲

Delta TechOps ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ▲

Ameco Beijing ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Turkish Technic ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ∼∼∼∼ ▲* ∼∼∼∼ ▲

AAR Corporation ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ▲ ∼∼∼∼ ▲ ▲

TAP Main. & Eng. ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ∼∼∼∼ ▲

Malaysia Airlines

E&M▲ ▲ ▲ ▲ ∼∼∼∼ ∼∼∼∼ ▲ ∼∼∼∼

Bedek ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ▲ ▲ ∼∼∼∼ ▲ ▲

Iberia ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ∼∼∼∼ ▲ ▲ ∼∼∼∼ ▲

ADAT ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

∼ shows partial capability

▲ shows full capability

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Aircraft and Bay Capacity

Company NB WB Total AC Capacity # of Hangar Bay CapacityCompany

Lufthansa Technik 37 23 60

AFI-KLM Eng. 41 36 77

ST Aerospace 39 28 67

SR Technics Holding 9 6 15

Singapore Airlines NA 9 9

HAECO/Timco 16 20 36

Sabena Technics- 18 8 26

Delta TechOps 17 14 31

Ameco Beijing-- 14 7 21

AAR Corporation 22 5 27

TAP Maintenance & Eng. 10 8 18

Malaysia Airlines E&M 9 9 18

Bedek 8 10 18

Iberia 15 24 39**

Turkish Technic 27 11 38

Lufthansa Technik 28

AFI-KLM Eng. 24 77

ST Aerospace 44

SR Technics Holding 7

Singapore Airlines 6 9

HAECO/Timco 17 33

Sabena Technics- 10 30

Delta TechOps 7 16

Ameco Beijing-- 4

AAR Corporation 13 22+

TAP Maint. & Eng. 9

Malaysia A. E&M 6 18

Bedek 12 18

Iberia 7

ADAT 6

Source:Companies’ own web sites; ACAS Database; MRO Yearbook 2014Source:Companies’ own web sites; ACAS Database; MRO Yearbook 2014

REYYANDEMIR2014

Aircraft Capacity

LHTST Aero

3X NB 3X WB

AFI-KLM AARIberia Turkish

Technic

HAECO/

Timco

Note : Icons show total NB and WB

capacity of each company based on

thier hangar capacity

Delta

TechOpsSource:Companies’ own web sites; ACAS Database; MRO Yearbook 2014Source:Companies’ own web sites; ACAS Database; MRO Yearbook 2014

REYYANDEMIR2014

Facility/Hangar Space Comparison

LHT

1.3M m²

AFI-KLM

1.2M m² 915.000 m²

Delta Techops ADAT

573.000 m²

HAECO/Timco

547.000 m²

Bedek

422.000 m²

ST Aero

310.000 m²

SR Technics

265.000 m²

Sabena

255.000 m²

Iberia

200.000 m² 165.000 m²

AAR

Facility Space 596.000 m²

Hangar Space 216.654 m²

Turkish Technic Source:Companies’ own web sites; ACAS Database; MRO Yearbook 2014Source:Companies’ own web sites; ACAS Database; MRO Yearbook 2014

REYYANDEMIR2014

Airframe Benchmark

A300 A310 A320F A330 A340 B737 B747 B757 B767 B777

Lufthansa Technik ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

AFI-KLM Eng. ▲ ▲ ▲ ▲ ▲ ▲ ▲

ST Aerospace ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

SR Technics ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Singapore Airlines ▲ ▲ ▲ ▲ ▲ ▲ ▲

HAECO/Timco ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Sabena Technics ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Delta TechOps ▲ ▲ ▲ ▲ ▲ ▲

Ameco Beijing ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Turkish Technic ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

AAR Corporation ▲ ▲ ▲ ▲

TAP Main. & Eng. ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Malaysia E&M ▲ ▲ ▲ ▲ ▲ ▲

Bedek ▲ ▲ ▲ ▲ ▲ ▲

Iberia ▲ ▲ ▲ ▲ ▲ ▲ ▲

ADAT ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

A350 A380 B787

LHT ▲ ▲ ▲

AFI-KLM Eng. ▲

SR Technics ▲

SIA Eng. ▲

Ameco Beijing ▲

Malaysia M&E ▲

ADAT ▲

TAP Main.&Eng ▲

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Engine Benchmark

GE CFM Pratt-Whitney Rolls-Royce

Lufthansa

Technik

AFI-KLM Eng.

MTU

Maintenance

ST Aerospace

SR Technics

Singapore

Airlines

HAECO/Timco

Delta TechOps

Ameco Beijing

Turkish Technic

TAP Maint. &

Eng.

Bedek

Iberia

ADAT

Aveos FleetSource:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Landing Gear Benchmark

A300 A310 A320F A330 A340 B737 B747 B757 B767 B777 B787 A350 A380

Lufthansa Technik ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

AFI-KLM Eng. ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

ST Aerospace ▲ ▲ ▲

HAECO/Timco ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Sabena Technics ▲ ▲ ▲ ▲ ▲ ▲

Delta TechOps ▲ ▲ ▲

Ameco Beijing ▲ ▲ ▲ ▲

Turkish Technic ▲ ▲ ▲ ▲ ▲ ▲

AAR Corporation ▲ ▲ ▲ ▲ ▲ ▲

TAP Main. & Eng. ▲ ▲ ▲ ▲ ▲

Malaysia E&M ▲

Bedek ▲

Iberia ▲ ▲ ▲ ▲ ▲ ▲ ▲

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

APU Benchmark

APS

2000

APS

2300

APS

3200

APS

500

PW

901A

PW

901C

ST

6L73

GTCP

131

GTCP

331

GTCP

36

GTCP

660

GTCP

85

TSCP

700

Lufthansa

Technik▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲

Delta

TechOps▲ ▲

Turkish

Technic▲ ▲ ▲ ▲ ▲

TAP M & E ▲ ▲ ▲ ▲ ▲ ▲ ▲

Bedek ▲ ▲ ▲ ▲ ▲

Iberia ▲ ▲ ▲

ADAT ▲ ▲ ▲

Aveos Fleet ▲

Hamilton Sundstrand HoneywellPratt-Whitney

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Part

145

Part

147

Part

M

Part 21J

DOA

Part 21G

POASTC

Lufthansa Technik ▲ ▲ ▲ ▲ ▲

AFI-KLM Eng. ▲ ▲ ▲ ▲ ▲

SR Technics Holding ▲ ▲ ▲ ▲ ▲

ST Aero ▲ ▲ ▲ ▲

Singapore Airlines ▲ ▲

Delta Tech ▲ ▲ ▲

Ameco Beijing ▲ ▲

Malaysia Airlines E&M

ADAT ▲ ▲

Bedek ▲ ▲

ADAT ▲ ▲

Turkish Technic ▲ ▲ ▲ ▲▲

*in process

HAECO ▲

Certification Benchmark

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Global Patent Numbers

Source: WIPO-Patent Database http://patentscope.wipo.int/search/en/structuredSearch.jsf

World International Patent Organisation

(WIPO)’nun patent database’i incelendiğinde

sektördeki üretici (OEM) pozisyonundaki firmaların

patent konusunda beklenildiği üzere çok önde

olduğu gözlemlenmiştir.

MRO endüstrisi bazında bakıldığında Lufthansa

Technik rakiplerine göre bu alanda ciddi üstünlük

sağlamıştır. Lufthansa Technik global düzeyde 255

patente sahiptir.

Company Patent #

General Electric 26037

GE Aviation 273

P&W 3322

Company Patent #

MTU Maintenance 1948

Bedek-IAI 500

Lufthansa Technik 255

AAR Corporation 48

HAECO/Timco 17

ST Aerospace 12

AFI-KLM Eng. N/A

SR Technics Holding N/A

Singapore Airlines N/A

Sabena Technics N/A

Delta TechOps N/A

Ameco Beijing N/A

Turkish Technic N/A

TAP Maintenance & Eng. N/A

Malaysia Airlines E&M N/A

Iberia N/A

Mubadala Aerospace N/A

REYYANDEMIR2014

2013 Investment Activities Benchmark

I A A C C C C A I II

I

II II

JJ

I BB I I BB II

I BB I

JJ

I

I

III

I JJ I

A A I

I II II

AcquisitionJoint venture Business Agreement

AI

J

C

BB

InvestmentCapital Injection

Aircraft Engine

OverhaulLeasing

Fleet M.Overhaul Leasing

Landing

Gear

Innovation

Engineering

Composite

Tech

Completion

Interior

Logistics

Management

Freighter

Conversion

Global

PresenceMilitary

ST AERO

LHT

AFI-KLM

SR

Technics

HAECO

Delta

TechOps

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

2013 Investment for New Business Areas

AcquisitionJoint venture Business Agreement

AI

J

C

BB

InvestmentCapital Injection

A BB

BB

BBBB

I I A JJ I I

JJ

New Business Areas Next-gen Aircraft

Patient

Transport

unit

Hybrid AC

Tugs

Recycling

part outConsulting

787 Nacelle

system

787 ICS

Support

787 MRO

and Spare

parts

Production

Inspection

787 VIP

Completion

ST AERO

LHT

AFI-KLM

SR

Technics

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Global Presence

Company# of

Country

# of

Site

# of

JV& Subsidiary

Lufthansa Technik 55 NA 50 (23 sub)

AFI-KLM Eng. 1 5 10

ST Aerospace 8 24 30

SR Technics Holding 8 NA

Singapore Airlines 9 NA 25

HAECO/Timco 4 9 NA

Sabena Technics 15 18 NA

Delta TechOps 1 2 NA

Ameco Beijing 1 1 NA

AAR Corporation 17 4 NA

TAP Maintenance & Eng. 2 3 NA

Bedek 1 1 -

ADAT 1 1 2

Turkish Technic 1 2 5

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Competition Environment

ST EngineeringST Engineering

Delta TechOpsDelta TechOps

BEDEKBEDEKAAR AAR

SIA EngineeringSIA EngineeringMASMAS

TAPTAP

IberiaIberia

HAECOHAECO

SR TechnicsSR TechnicsSabenaSabena

LHTLHTAFI-KLMAFI-KLM

ADATADAT

FL TechnicsFL TechnicsDublin AerospaceDublin Aerospace

Turkish TechnicTurkish Technic

Ameco BeijingAmeco Beijing

GAMECOGAMECO

Source:Companies’ own web sitesSource:Companies’ own web sites

REYYANDEMIR2014

Sources & Credits

• Aviation Week

• Flight Global

• Ascent Advisory ACAS Database

• Companies’ own web sites

• Internet research

• ICF SH&E

• MRO Yearbook 2014

Special Thanks to following people for their contribution

to this research.

Fatih Alparslan

Ahmet Umur Çakmak

Abdullah Enes Bolat