MRO INDUSTRY TRENDS Four key MRO industry trends to...
Transcript of MRO INDUSTRY TRENDS Four key MRO industry trends to...
Four key MRO industry trends to watch…MRO INDUSTRY TRENDS
Surplus Parts
Fleet Role of OEM
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Source: ICF SH&E
Industry Trends
AdditiveManufacturing
FleetDynamics
Role of OEMin MRO
Today, spending on air transport surplus parts is approximately $3 billion
KEY TRENDS: SURPLUS PARTS
Airframe
5%
Air Transport Surplus Parts Market*~$3 Billion
Surplus material for engines predominantly consist of piece parts (e.g., LLPs)
Surplus material for engines predominantly consist of piece parts (e.g., LLPs)
Typically slow moving
structural parts
Typically slow moving
structural parts
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Engine
Components
65%
30%
* Sales to end customers; excludes intra-dealer sales
Component surplus are primarily rotables LRUs; Demand is driven by AOGs, BER and provisioning
Component surplus are primarily rotables LRUs; Demand is driven by AOGs, BER and provisioning
Source: ICF SH&E
Surplus dealers now obtain over 80% of their inventory from parting-out aircraft…
KEY TRENDS: SURPLUS PARTS
26%
8%20% 10%
50%60%70%80%90%
100%
2007 & 2012 Supplier Channels for Obtaining Surplus Materials
§ Leaner airline inventories
§ Improved material
ICF SH&E Insight
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54%
82%
0%10%20%30%40%50%
2007 2012
Purchase From Surplus Dealer
Direct Purchase From Airline
Aircraft Part-Out
Source: ICFI SH&E AnalysisSource: ICFI SH&E Analysis
§ Improved material planning (and MRO IT capabilities)
§ Increased component pooling agreements
§ OEM after-market material control strategies
The surplus parts value chain is evolving as suppliers pursue integrated solutions
KEY TRENDS: SURPLUS PARTS
Aircraft & Engine Leasing
Aircraft & Engine
Disassembly
SurplusParts
TradingAsset
Management
Component & Engine
Repair
GA Telesis acquires Finnair Engine Services moving from
ILFC acquires AeroTurbine (aircraft & engine disassembly and surplus trading)
GECAS acquires Memphis Group adding disassembly and surplus trading capabilities
Lufthansa acquires 15% holding in AeroTurbine
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AJ Walter acquires ex-Aveos component facility moving into component repair and asset management
GA Telesis acquires Finnair Engine Services moving from disassembly / trading into component & engine repair Finnair Engine
Services
Upstream Downstream
Kellstrom acquires AirLiance, merging surplus operations
Source: ICF SH&E
Four key MRO industry trends to watch…MRO INDUSTRY TRENDS
Role of OEMIn MRO
AdditiveSurplus
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Source: ICF SH&E
Industry Trends
AdditiveManufacturing
SurplusParts
Fleet Dynamics
KEY TRENDS: EVOLVING SUPPLIER RELATIONSHIPS
Integrators§ Scale§ Engine/
Engine & Component OEMs§ Focus on
Airframe OEMs§ Grow aftermarket services revenue§ FHS, GoldCare, MRO Network§ Part consignment programs
Relationships between the various MRO suppliers continue to evolve
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Independent MROsEvaluating strategic options§ Seek partnerships?§ Niche competitor?§ PMA/DER usage?§ Access to new aircraft IP?
§ Engine/Component JV opportunities?§ Evaluation of core
vs. non-core
§ Focus on controlling IP§ Continue
successful capture of market share (especially for new gen equipment)§ Increased support
in growth regions via licensed service centers
Source: ICF SH&ESource: ICF SH&E
Aircraft OEMs are fast becoming major MRO players…
§ The EADS Vision 2020 goal is 25% services revenue by 2020
§ Two major acquisitions in 2011: Satair and Vector Aerospace
§ Numerous FHS contracts
KEY TRENDS: EVOLVING SUPPLIER RELATIONSHIPS
50%60%
90%60%
80%
100%
Typical OEM Revenue Mix
Manufacturing
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Sources: ICF SH&E Analysis, EADS Vision 2020
§ Launched EDGE in 2012 to create coordinated services brand
§ Major player in flight training, distribution, and consumables management
§ Two new GoldCare contracts
~50%~40%
~10%
90%
0%
20%
40%
Engine OEMs Component OEMs
Aircraft OEMs
Services
Component OEMs are increasingly embracing licensed service centres and/or partnerships to address growth regions
§ The engine licensed service centre network model is being replicated by component OEMs (e.g., following success of CF34/AE3007/CFM56 networks)
§ Some of the recent signings focus on
Recent Examples ofComponent OEM Agreements
KEY TRENDS: EVOLVING SUPPLIER RELATIONSHIPS
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Source: ICF SH&E / Company press releases
§ Some of the recent signings focus on support for new aircraft such as 787
§ The licensed service centre model has several benefits for OEMsØReduced need for bricks and mortarØAccess integrated support customers
§ The upshot: creates opportunities for well-positioned independent MROs on new generation equipment
Four key MRO industry trends to watch…MRO INDUSTRY TRENDS
AdditiveManufacturing
Fleet Dynamics
SurplusParts
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Source: ICF SH&E
Industry Trends
Dynamics
Role of OEMIn MRO
Parts
KEY TRENDS: ADDITIVE MANUFACTURING
Additive manufacturing is a long-term trend to watch in MRO; Aeroengines are a near-term opportunity
Examples of Additively Manufactured Aeroengine Parts
Fuel Nozzles LPT Blades/Vanes Housings/Features
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Source: ICF SH&E analysis, GE Aviation, Avio, EU Project Merlin (Rolls-Royce)
CFM Leap Fuel Nozzles
• Improved performance, reduce part count, betterdurability
• JV with Parker Aerospace will makeLEAP fuel nozzles
• Reduced material production on expensive Ti-Al parts
• Not in production
GENX Ti-Al LPT Blade (Avio)
• External features added to forgings
• Reduces material waste and complexity
Housings/Casing Features
Applications are currently limited to complex-geometry static parts
Additive manufacturing is also being used for repairs
KEY TRENDS: ADDITIVE MANUFACTURING
Repair of Turbine Components Using Direct Metal Deposition (DMD)
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Rebuilt turbine blade tip
As deposited DMD turbine blade tip
Turbine blade squealer tip is built up using
DMD
Source: DM3D, MT Additive
DMD includes a patented closed loop feedback control of the deposition process