World Commercial Aircraft Maintenance, Repair & Overhaul (MRO) Market 2013-2023

www.visiongain.com

World Commercial Aircraft Modernisation, Repair and Overhaul (MRO) Market 2013-2023

4.5 Evaluating the HMV/Mods MRO Submarket 2013-2023

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-23

Sales $bn 8.5 8.8 9.0 9.2 9.5 9.6 9.9 10.2 10.6 10.9 11.3 107.6

AGR (%) 2.5 3.7 2.6 2.0 2.7 1.6 3.0 2.5 3.8 3.2 3.9

2018-23 3.3

2.9

2.5CAGR (%) 2013-18

CAGR (%) 2013-23

2013 2018 2023

0%

1%

2%

3%

4%

5%

0

2

4

6

8

10

12

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Mkt Value ($bn) AGR (%)

Year

Sale

s $b

n

AGR

17.3%

16.2%

15.3%

Source: Visiongain 2013

Table 4.5 HMV/Mods MRO Submarket Forecast 2013-2023 ($bn, AGR %, CAGR%, Cumulative)


Figure 4.12 HMV/Mods MRO Submarket Share Forecast 2013, 2018 and 2023 (% Share)


Figure 4.11 HMV/Mods MRO Submarket Forecast 2013-2023 ($bn, AGR%)

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5.5.3 The Next Few Years will be Crucial for AFI-KLM

Although AFI-KLM is one of the largest providers of MRO service activities to have operations

there, the company has not escaped the effects of the economic downturn on its business. With

fuel prices continuing to eat into its profitability margin, the company has resorted to a programme

of restructuring in order to return to sustainable profitability. The three year transformation plan will

see a slight reduction in the active fleet belonging to Air France whilst the company plans to

maintain existing flight capacity. It also plans to increase its share in the engine MRO submarket by

improving its economic efficiency, increasing its revenue generated from third party airlines and

restructuring hangar space. Whilst AF-KLM is just one of many companies which operate in the

French MRO market, it current state of affairs is reflective of the challenges facing many other

MRO providers. For this reason, Visiongain predicts that the French MRO market will lose market

share and only achieve a moderate CAGR rate during the forecast period.

AFI-KLM October 2012 Signed a long-term maintenance and pooling contract with Flybe-

Finnair joint venture Flybe Finland. The agreement covers an

extensive array of components, including the propellers of the

turboprop aircraft which included three ATR 42s and eleven ATR

72s. The contract includes access to a spares pool located at AFI

KLM E&M's Roissy-CDG Logistics Centre, and the lease of a Main

Base Kit, to be positioned at Flybe Finland's Vantaa-Helsinki

airport main base.

AFI-KLM

E&M

July 2012 LOT Polish Airlines signed a long-term component support

agreement with AFI KLM E&M for its fleet of Boeing 787

Dreamliners, which will ultimately comprise eight aircraft. LOT was

scheduled to deploy the Dreamliner in January 2013. The support

provided for LOT Polish Airlines covers repairs and pool access

for more than 600 part numbers, together with logistics support and

the provision of a stock of spare parts at the customer's main base.

AFI-KLM

E&M

May 2012 Aigle Azur renewed work with AFI KLM E&M by signing a

component support contract for its fleet of A320s. The contract is a

flight-hour agreement for component support, with pool access and

repairs. It also includes major overhauls (C-Checks) on a non-

exclusive basis.

Table 5.13 France Commercial Aircraft MRO Major Contracts & Programmes

(Company, Date, Details)

www.visiongain.com


5.10 Indonesian Commercial Aircraft MRO Market 2013-2023

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2013-23

Sales $bn 1.1 1.2 1.3 1.3 1.4 1.5 1.6 1.7 1.9 2.0 2.1 17.2

AGR (%) 6.4 6.7 6.8 6.9 6.9 7.0 6.8 7.0 6.8 7.0 6.8

2018-23 6.8

6.8

6.8CAGR (%) 2013-18

CAGR (%) 2013-23

2013 2018 2023

0%1%2%3%4%5%6%7%8%

0.0

0.5

1.0

1.5

2.0

2.5

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Mkt Value ($bn) AGR (%)Year

Sale

s $b

n

AGR

2.2%

2.6%

2.9%


Table 5.25 Indonesian Commercial Aircraft MRO Market Forecast 2013-2023 ($bn, AGR %, CAGR%, Cumulative)


Figure 5.22 Indonesian Commercial Aircraft MRO Market Share Forecast 2013, 2018 and 2023 (% Share)


Figure 5.21Indonesian Commercial Aircraft MRO Market Forecast 2013-2023 ($bn, AGR%)

www.visiongain.com


7. Expert Opinion ____

7.1 AFI-KLM E&M

Sébastien Weber is the Vice President of Marketing and Product Development at AFI KLM E&M.

AFI KLM E&M is an international recognized major provider of maintenance, repair, overhaul and

modification services for commercial aircraft. Sébastien Weber kindly provided answers to

Visiongain’s questions in April 2013.

7.1.2 Understanding AFI-KLM’s Involvement in MRO

Visiongain: Could you outline your involvement with MRO and some of the recent work that

you have been doing?

Sébastien Weber: As you know, before 2004, AFI and KLM E&M were competitors in the MRO

market. We maintained the fleets of our parent companies, AF and KLM respectively, and we

provided MRO services to external customers. In 2004 AF and KLM merged to form a joint

commercial organization. AFI-KLM E&M became a division of this organization meaning that we

have one target plan, one budget and one reporting system. Subsequently, we created centers for

excellence to deal with specific products and services based on each company’s experiences.

Traditionally, KLM were Boeing orientated before they ordered the A330 whilst Air France was

more Airbus orientated even though it had some 777 and some 747s. Following the merger, both

companies split and spread the work which they were able to do at their own facilities in order to

avoid overlaps. Of course, KLM still performs line maintenance on their own fleet and they do their

own work for the 777 and the A330 whilst Air France does the same thing for its own aircraft at its

main base. But component and engine maintenance, heavy checks modifications and secondary

services like working on APUs and thrust reversers are all done at these centers of excellence.

Presently, AFI KLM E&M is in the middle of a programme, known as Transform 2015, to reduce

costs and restructure the company in such a way that will bring us closer to our customers.

Our involvement within the MRO business is to serve our customers with a whole range of services

including engineering and airframe, component and engine maintenance, APUs, modifications and

even training services. We can provide a turnkey solution to our customers who might need work

done on a very specific aircraft type, component part, or who have a limited budget or time frame in

which they need to get work done on their aircraft. We also provide other customers with Total

Care packages. So our MRO services encompass a broad range of services from individual aircraft

to airlines requiring maintenance on an entire fleet. We service every type of Airbus and Boeing

www.visiongain.com


8. Leading Companies in the Commercial Aircraft MRO Market

8.1 AAR Overview

2011 Total company revenue $bn $2bn

Headquarters Illinois, USA

Ticker AIR

IR Contact Tel: 630-227-2075

http://www.aarcorp.com/contact.htm

Website http://www.aarcorp.com/

Product Specification Overhaul and Maintenance

Duluth – 80,000 Sq ft.

Hot Springs – five nose to tail maintenance lines

Indianapolis – 10 bays

Miami - 226,000 Sq ft. for C and D checks

Oklahoma - Full Service at seven hangars

Component Repair Overhaul, Replacement, Exchange, Scrap Replacement

Options

Composite Repair Produces advanced structures using autoclave cure, oven

cure, resin transfer moulding (RTM), compression moulding

and vacuum assisted resin transfer moulding (VARTM)

Engineering Services n/a

Landing Gear, Wheels and

Breaks

Repair for 43 types of aircraft, both commercial and military

Table 8.2 AAR Products / Services (Product, Specification)


Table 8.1 AAR Overview 2011 (Total Revenue, HQ, Ticker, Contact, Website)


http://www.aarcorp.com/

World Commercial Aircraft Maintenance, Repair & Overhaul (MRO) Market 2013-2023

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