When UK rock singer and aviation buff Bruce Dickinson established in 2012 a maintenance operation in a decommissioned Royal Air Force hangar in the Welsh town of St Athan, a few miles west of Cardiff airport, he envisaged that the site would become a central column in a business spanning aircraft leasing, operation, maintenance and training.
Dickinson foresaw that wet-lease customers would hire what he describes as an "airline in a box", with all support activities being provided by the then-new business, Cardiff Aviation.
But now, the company's chairman concedes that plan did not work for the maintenance operation.
The division was "underperforming" and was operating on an "inefficient… hand-to-mouth basis", Dickinson tells FlightGlobal.
"It was costing the customer money, it was costing us money," he says – indicating that he had to use his own capital to keep the business afloat: "Frankly, we have had to take some pain… I have had to take some pain."
RETHINK
This led to a business review in 2017, under which new management was brought in and the maintenance operation was established as a standalone business. "I effectively pressed the reboot button," he says.
A five-year contract with tour operator TUI to service Boeing 737s, 757s and 767s was the first under a new strategy of targeting larger, more lucrative airline support agreements.
Dickinson says, however, that additional investment is required to build up capacity and capabilities in order to attract more airline business to Cardiff Aviation's "Twin Peaks" two-bay facility.
He says he is in the process of searching for investors and partners to inject "at least" £5 million ($6.6 million) into the company.
Talks with operators, including freight specialist FedEx Express, are under way and, Dickinson says, Delta TechOps has been won as a partner to support an effort to gain US Federal Aviation Administration maintenance organisation certification.
Throughout 2018, Cardiff Aviation reviewed internal processes and introduced lean manufacturing initiatives in a bid to improve efficiency and generally "clean up the organisation [and] to get people on the same page", says the maintenance, repair and overhaul division’s managing director, Martyn Anderson.
But in order to win more contracts, the MRO provider needs to expand capacity and employ more staff.
Today, the company operates a single maintenance line with around 70 technical staff members, although recruitment is ongoing, which can be employed in two shifts.
Anderson says the majority of employees are permanent staff and that the MRO company hires contractors only when specialist capabilities or additional manpower are required.
BUILDING TRUST
Under the current set-up and workload, Anderson says that "we hope to get to sort of break-even" – or even "slightly profitable" – during the current winter period. Its longer-term objective is to build trust with larger UK carriers to generate more business during the following winter.
Operating a single or one and a half maintenance lines would be a "steady-state model" to keep the company going, says Dickinson. But he adds that that is "not really one that we want to live with because our model is based on expanding".
He adds: "We need the investment in order to expand… The investment is there to boost the company from where it is now to where it should be in a year’s time."
In future, Dickinson foresees an operation with up to three maintenance lines and that the MRO business could construct a second hangar, potentially as a dedicated paint bay.
Under its new strategy, Cardiff Aviation wants to attract maintenance contracts covering multiple aircraft or longer terms – in order to generate scale efficiencies – from major airlines with large fleets.
In addition to TUI, Dickinson mentions British Airways, EasyJet, UK carrier Jet2 and US operator JetBlue as potential candidate customers.
Anderson acknowledges that operators like BA and TUI complete airframe checks through in-house maintenance facilities that have been optimised to process large fleets with maximum efficiency.
He suggests, however, that such carriers require additional, external maintenance capacity and that they can generate long-term rather than ad hoc contracts with scope for scale effects for third-party MRO providers.
Anderson sees Cardiff Aviation’s competitive edge in being able maintain aircraft up to the size of the 767 in a market where, he says, European airlines are facing a maintenance capacity shortage as a result of fleet growth across the region.
Especially in regard to the UK, he says: “A lot of [commercial] MRO capacity in the UK has disappeared”.
Both Dickinson and Anderson show no worries that Brexit could jeopardise the Cardiff Aviation’s growth plan.
Dickinson argues that the company’s existing European Aviation Safety Agency Part 145 certification can be maintained like the regulatory approvals from other countries that Cardiff Aviation already holds.
“EASA come and audit you, just like [the] Bangladesh [regulator],” he says.
And Anderson believes that operators from the UK and other nations – beyond the EU – represent a large enough market to support Cardiff Aviation’s growth plan.
“We looked at this long and hard,” he says. “We looked at our approvals, we looked at our client base, and we deliberately gone down this road [of] anticipating the worst of impact on us. And I think we are pretty robust.”
He says that the vast majority of Cardiff Aviation’s clients operate UK-based aircraft. “We are not dependent on Europe for our workflow.”
Source: FlightGlobal.com
