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Aviation History
2004
2004-09 - 1789.PDF
Switzerland: MRO Swiss aerospace's maintenance, repair and overhaul providers are seeking to expand by increasing their international customers and exploring niche businesses JUSTIN WASTNAGE / BASLE, BERNE, LUCERNE & ZURICH Although Switzerland has had a healthy maintenance, repair and overhaul (MRO) industry for many years, it is one part of aviation where quality cannot be stressed as a selling point, because all European providers follow the same strict rules. Instead, Swiss companies have to promote better delivery times, greater flex ibility and deeper customer relationships as they seek to expand. Switzerland has a long MRO tradition. Its largest maintenance provider is SR Technics, the former maintenance arm of defunct Swissair, which has prospered in indepen dence. Similarly, Jet Aviation, which started life servicing the nascent private jet indus try, has grown to be a world leader; and the country's large concentration of helicopters has driven the growth of Swiss Helicopter Maintenance (SHM). Meanwhile, manufac turers Ruag Aerospace and Pilatus have also entered the MRO market. Much of the growth has been organic, driven by greater use of aircraft. But some companies, such as SR Technics, have seen the opposite effect, having to overcome the loss of its largest customer and still achieve growth. Also, Swiss MRO centres continue to build business despite the country's high labour costs, particularly acute for labour-intensive work such as heavy maintenance. So instead of focusing on D- and C-checks, Swiss MRO providers had to diversify to survive. Take Jet Aviation, for example. Established in 1973, the facility in Basle was created to maintain the small fleet of Learjets the company then owned. In those days there were few other options for business jet servicing, says Jet Aviation senior vice-president and Basle facility gen eral manager Rainer Albecker. As business aviation grew, there were not only more jets to service, but also increased competi tion, so Jet Aviation took the strategic deci sion to offer cabin interior design - an undeveloped market at the time. "The first cabin completions we did were a Convair CV-880 and a Douglas DC-7 and we did about one a year initially, but revenues from MRO and completions reached parity around seven years ago when we started doing airliner-class types such as the Boeing 767 and 737," he says. Business aviation MRO has distinct cycles, with checks requiring downtime scheduled for either around Christmas for corporations or Ramadan for many Middle Eastern clients. Jet Aviation found initially that offering completions ironed out some seasonal fluctuations, with workers engaged in cabin work during less intensive periods. Now, with three Boeing Business Jets, two Dassault Falcons and a 747SP hav ing been completed in 2003, completions are half of the facility's business and act as a draw for maintenance work, with heavy checks taking place simultaneously to reduce aircraft downtime. Jet Aviation was also quick to expand internationally, a move many Swiss firms have been cautious to make. Zurich-based SR Technics is understandably nervous of rapid overseas expansion, having lost a US subsidiary during the collapse of Swissair owner SAirGroup, which arguably tried to grow too fast. This measured approach can be seen in its strategy for the acquisition of Irish MRO provider FLS Aerospace, whose Dublin and London Stansted sites will be eased into company operations rather than given the SR Technics brand from day one, says Tim Taalat, SR Technics Switzerland president and chief executive. This illus trates the importance Swiss management places on excellence above brand-building. As business aviation grew, Jet Aviation took the strategic decision to offer a cabin interior design service Outward gaze However, SR Technics has spent the past decade scouring the rest of the world for customers. Its geographical position, easily within narrowbody range for most of Western Europe, made it ideally placed to bid for contracts from start-up short-haul carriers, many of whom had no in-house capabilities. The outward gaze started, as it did for many Swiss companies, says Taalat, with the 1992 Swiss rejection of member ship of the European Economic Area, a free trade zone linked to the EU's single market. "After long debate about the pros and cons of joining, we came to the conclusion that we were on our own and had to find the best solution," he says. For SR Technics, this meant chasing third-party work. In the mid-1980s, Swissair accounted for about 80% of the company's business, whereas its successor, Swiss International Air Lines, now provides only one-quarter of all contracts. In pursuing foreign contracts, SR Technics has to face the fact that it is not cheap, says Taalat. Instead, what Switzer land has to offer the world is fast turn around times, which in the world of air craft utilisation-driven carriers makes more difference than the actual cost of a letter check, he says. For example, SR Technics claims to be able to shave 10-15 days off an overhaul of a Pratt & Whitney engine, which could translate into a medium-sized carrier requiring one fewer lease engine. This faster turnaround, combined with Swiss punctuality, means SR Technics still wins contracts against cheaper rivals in 38 21-27 SEPTEMBER 2004 FLIGHT INTERNATIONAL www.flightinternational.com
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