MTU is planning to expand its maintenance activities, while the engine MRO market’s centre of gravity is shifting further toward the OEMs.
Turnover generated by MTU’s civil maintenance business increased 6% to €1.38 billion ($1.9 billion) in 2013, although the segment’s operational profit declined 0.5% to €113 million compared with the previous year. In US dollar terms, MTU expects its MRO business to grow at a medium to high single-digit percentage rate this year.
Support for the International Aero Engines V2500 – in which the Munich-based engine specialist is a programme partner – has been a major revenue driver in the MRO segment. The aftermarket business for that engine is to peak around 2025, says chief programme officer Michael Schreyogg.
MTU has also ramped General Electric GE90 capabilities at its MRO facility in Hannover as it aims to maintain its approximately 8% share of the engine aftermarket.
However, support services beyond engine overhauls are to become an important revenue driver in future. Having teamed up with Japan’s Sumitomo in September 2013, MTU wants to “significantly” expand its engine lease pool, says the MRO division’s president Stefan Weingartner.
On-wing maintenance services are also set to grow. Following MTU’s acquisition in 2011 of a majority share in Texas-based engine support specialist Retan Aerospace – which has since been rebranded MTU Maintenance Dallas – Weingartner wants to expand on-wing activities in Europe and Asia, too. However, it is not yet clear how that goal will be achieved, he says.
Flight hour-based, long-term support contracts agreed between manufacturers and airlines as part of the engine sale are expected to become more dominant. While around 40-55% of MRO contracts were such power-by-hour deals in the past, that share is set to grow to around 80%, says Schreyogg.
As a result, MTU will have to support engines – especially new models – as an MRO partner of the manufacturers rather than an independent third-party maintenance provider, which it has been, for example, on CFM International CFM56 powerplants in the past.
Weingartner says the GEnx family is being evaluated as a future model for MRO in partnership with GE. No decision has yet been made, but if a co-operation were to be arranged, this will not automatically mean that the GEnx will be serviced at MTU’s Hannover overhaul shop, he says. The maintenance provider supports the predecessor model, CF6, at that facility.
MTU is to service the Pratt & Whitney PW1000G geared turbofan in future and will also repair the turbine centre frames it supplies as a manufacturer to the GEnx programme.
Supporting the Leap family as a successor engine for the CFM56 will be “difficult from today’s point of view” due to MTU’s participation in the rival PW1000G programme, says Weingartner. However, while the MRO market for new engines will be increasingly controlled by the OEMs, they will need partners to conduct the maintenance work. If a service provider can offer attractive savings, this could give an MRO specialist such as MTU access also to rival engine programmes, he says.
Despite the trend toward more OEM control, Weingartner still sees a role for third-party engine MRO providers in the mature engine sector. Once aircraft are transferred from their first operators to other airlines – and the initial maintenance agreement expires – the new owners will search for support opportunities on the third-party aftermarket, he says.