_EGT_ margin - AviTrader by wuzhenguang



            April 2011 - www.avitrader.com

• Is it an OEM business?
• The PMA debate

• Charles Willis of Willis Lease

• Techspace Aero, SIAEC, Mxi and more

Editor‘s Page                                                                                                                                                                         2

The Engine Issue: engine maintenance, leasing, EGT margin and more
W     ELCOME TO OUR APRIL ISSUE OF                                can only handle about a third of the shop visits                Charles Willis, founder and CEO of Willis Lease.
      AviTrader MRO magazine, which, as                           scheduled each year for GE and CFM engines.                     Willis gives us fascinating insight into his ‘rags
you can see, is all about engines. The last                                                                                       to riches’ emergence as an industry leader and
                                                                  Other companies are not so sure. They speak of
time we focused on engines was nearly a year                                                                                      expresses his views on the state of the engine
                                                                  the increasing encroachment of the OEMs on
ago, in our June 2010 issue, when we spoke                                                                                        leasing business in no uncertain terms.
                                                                  what was traditionally MRO shop turf and point
to industry professionals about the subject of                    out that if it were not for the general expan-                  Our regular International Bureau of Aviation
spare engine leasing, so we thought it high                       sion in the global airline business, a lot of MROs              analysis focuses this month on engine mainte-
time to return to this rather crucial sector of                   would be in trouble. The OEM ‘total-care’ type                  nance and EGT margin - again, a timely and
the aviation industry. This time, however, we                     of after-market service agreement comes under                   fitting piece that complements and enhances
look at maintenance, and we ask the burn-                         fire from lessors and service providers as well.                 the subject matter in this issue.
ing question: Is engine maintenance an OEM
business or is there room for third parties and                   We then touch upon the debate over the use                      Next month, we’ll move on to the Middle
independents?                                                     of PMA parts, and hear from a range of profes-                  Eastern MRO market - again, a timely topic
                                                                  sionals on the subject. Are PMA parts a contro-                 given the current unrest in the region. After
What emerges is that there is no clear consen-                    versial issue with a serious impact on the global               that, June’s issue looks at the engine life cycle,
sus on the matter. Brian Ovington of GE Avia-                     MRO business, or is the debate just a lot of hot                while our summer special magazine centres of
tion gives the case for the OEMs, and explains                    air, as one of our contributors suggested. Read                 the biggest airshow of the year, which in 2011
that GE, in particular, maintains a wide range                                                                                    is, of course, Le Bourget in Paris. Why not con-
                                                                  on to see what these executives are saying, and
of partnerships with MROs around the world,                       let us know what you think.                                     tact us now and give us your perspective on
as a means of dealing with its huge backlog of                                                                                    these and other issues? We look forward to
service contracts, and adds that the company                      Also featured is an exclusive interview with                    hearing from you! Ed.

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                                                                                                                                                     Catherine Davies, Editor
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ST Aerospace engineer preparing a CFM56-5B engine for test                                                         ST Aerospace
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    Contents                                                                                                                                       Head of Sales & Marketing
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    Airframe News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
    Engine News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
    Component News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
                                                                                                                                     AviTrader MRO is a subscription-free
    Cover Story: Engine Maintenance - An OEM Business?. . . . . . . . . . . . . . . 10                                             monthly publication. To receive a copy in
    Cover Story: Engine Maintenance - The PMA Debate . . . . . . . . . . . . . . . . 13                                            your inbox every month, please send an
    Industry Interview: Charles Willis of Willis Lease. . . . . . . . . . . . . . . . . . . . 16                                  email with the subject “subscribe” to oem-
                                                                                                                                              mro@avitrader com
    IBA Analysis: Engine Maintenance and EGT Margin . . . . . . . . . . . . . . . . . 18
    IT News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21                                  Opinion
    News in Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22             Please send your comments and queries to
    Industry People on the Move. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25                                  youropinion@avitrader.com

                                                                                                                                                         AviTrader MRO - March 2011
                                                                        Engine Leasing
                                                                  Asset Management
                                                            All Manufacturer Types
                                                      Long, Medium & Short Term
                                                Leases • Operating Leases • Asset
                                           Management • Sales & Leasebacks
                                   All Manufacturer Types • Operating Leases
                               Asset Management • Sales & Leasebacks
                        All Manufacturer Types • Long, Medium & Short Term
                 Leases • Operating Leases • Asset Management • Engine
          Trading • All Manufacturer Types • Sales & Leasebacks • Asset
 nagement • Long, Medium & Short Term Leases • Operating Leases
 • Asset Management • All Manufacturer Types • Sales & Leasebacks
 ating Leases • Engine Trading • Long, Medium & Short Term Leases
 • All Manufacturer Types • Operating Leases • Asset Management
Leases • Long, Medium & Short Term Leases • Operating Leases
     Manufacturer Types • Sales & Leasebacks • Engine Trading
ong, Medium & Short Term Leases • Operating Leases • Sales
 & Leasebacks • Engine Trading • Asset Management • Long
 Medium & Short Term Leases • Engine Trading • Operating
     Leases • All Manufacturer Types • Asset Management
   um & Short Term Leases • Asset Management • Sales
   Leasebacks • All Manufacturer Types • Long, Medium
    and Short Term Leases • Operating Leases • Asset
  nagement • Sales & Leasebacks • All Manufacturer
Management • Long, Medium & Short Term Leases
 ypes • Operating Leases • Asset Management
• Sal e s & Leasebacks • All Manufacturer Types
Long, Medium & Short Term Leases • Operating
 es • Asset Management • Sales Leasebacks
ng Leases • All Manufacturer Types • Long
   Medium Short Term Leases • Operating
    Leases Asset Management • Engine
  gine Trading • All Manufacturer Types
  Leasebacks • Engine Trading • Asset
 anagement • Medium & Short Term
                                                                         KEEPING YOU IN THE AIR
  ses • Operating Leases • Asset
 agement • All Manufacturer Types
  les & Leasebacks • Operating
 ases • Engine Trading • Long
Medium & Short Term Leases
es • All Manufacturer Types
  ent • Asset Management
    Medium & Short Term
    Leases • Operating
 •Sales & Leasebacks
ong, Medium & Short
 • Operating Leases
 sebacks • Engine
ment • Operating
 rt Term Leases
 cturer Types
 rm Leases
selected Airframe News                                                                                                                                        4

 liNe mAiNteNANce                                United Airlines’ 777 fleet set to be modified with new Performance
                                                 Improvement Package
 Ameco Beijing provides line main-
 tenance services to Singapore Air-              United Airlines’ 777 fleet will be modified with a Performance Improvement Package that will
 lines                                           result in greater fuel efficiency, along with reduced emissions. The package, to be installed on
                                                 52 United Airlines 777s, is expected to reduce fuel spending per airplane by about $200,000
 Ameco Beijing has been providing line           annually (assuming $100 per barrel crude oil prices), according to Boeing estimates. The 777
 maintenance services including aircraft         Performance Improvement Package improves the airplane’s aerodynamics through a software
 releasing to Singapore Airlines in Beijing.     change to enable a drooped aileron, a ram air system improvement and the installation of
 Singapore Airlines operates Boeing 777          improved wing vortex generators.
 aircraft on Singapore-Beijing route, with
 21 flights per week. This is the first co-
 operation between the two companies in
 the respect of line maintenance.

 bmi signs agreement with Mon-
 arch Aircraft Engineering
 Independent aircraft maintenance provid-
 er, Monarch Aircraft Engineering (MAEL)
 signed line maintenance technical han-
 dling agreements with bmi, British Mid-                                                                                                      AirTeamImages
 land International. Under the terms of the
 agreements and with immediate effect,
 MAELs experienced engineering team will        Biggest A350 XWB carbon fuselage panel manufactured
 provide line maintenance support to bmis
                                                Airbus partner, Premium AEROTEC, successfully completed the curing of the largest A350 XWB
 A320 fleet operations at Birmingham and
                                                fuselage panel made from carbon fibre at its site in Nordenham (Germany). Located on the for-
 London Gatwick.
                                                ward right-hand side of the fuselage and measuring 93 square metres, the panel will undergo
                                                ultrasonic inspection, trimming and drilling in the coming days prior to being joined with the
                                                other panels that together will become the forward fuselage (Section 13-14). Airbus opted for
LTP completes overhauls for Asiana              large fuselage panels for the A350 XWB design as they can be tailored in terms of their thickness
and Swiss                                       according to the different loads required at each part of the airframe.

Asiana Airlines expanded its cooperation        AVISA and aeroDAC partner with CASL to serve SE Asia and China
with Lufthansa Technik Philippines (LTP)
when it contracted the Manila-based main-       AVISA Aviation Safety Systems recently signed an agreement to work with China Aircraft Services
tenance, repair and overhaul facility to per-   Limited and aeroDAC, an EASA-approved part 21 design organisation, with capabilities in every
form heavy maintenance check on an Airbus       aspect of aerospace design, aircraft certification and approval. The new partnership will see the
A320 aircraft. The IL-check was completed       three businesses working together on collaborative projects across both the South East Asia and
earlier this month.                             Chinese markets. The combination of AVISA and aeroDAC’s EASA approved services alongside
                                                CASL’s maintenance services will aim to provide operators with a one-stop shop for all their
A Swiss International Air Lines Airbus A340-    Maintenance, CAMO and Design requirements. These services will be delivered collectively from
300 also underwent a heavy maintenance          new offices in Hong Kong.
check at Lufthansa Technik Philippines (LTP).
Along with the D1 check, LTP performed
cabin modification which involved installa-
                                                Testing of Bombardier CSeries Aircraft systems begins
tion of flat bed seats in the business class    The first systems for Bombardier’s CSeries airliner program are now being developed and tested at
section and the consequent reduction of         partners and vendors in Canada, the USA and Europe prior to delivery to Bombardier’s Complete
the tourist or economy class seats to accom-    Integrated Aircraft Systems Test Area (CIASTA). The installation of the systems rigs at the CIASTA is
modate the wider new business class seats.      progressing on schedule, and some parts, including the engine accessory gearbox and flight deck
This event marked the first time that Swiss     controls, have already arrived. Located at Bombardier’s Mirabel facility north of Montréal, the CIASTA
International Air Lines, a member of the        is the high-tech laboratory that will test the CSeries aircraft’s systems ahead of first flight and will con-
Lufthansa Group, sent an aircraft to the Ma-    tinue to support systems integration during the flight test program. Supported by three main pillars
nila-based Lufthansa Technik AG subsidiary      - risk mitigation, advanced quality planning and solid governance - execution of the CSeries aircraft
for maintenance work.                           program is designed to enhance the reliability and maintainability of the CSeries jetliner.

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selected engine and components News                                                                                                                         6

  Techspace Aero develops the BluM lightweight bladed drum for low-pressure compressors
  Safran Group subsidiary Techspace Aero has developed a new rotor for low-pressure compressors, the bladed drum or BluM, which will
  provide a light-weight solution for new generation engines. Project manager Eric Marot explains the advantages of the BluM: “All en-
  gine-makers are already very familiar with integrally-bladed disks, better known as blisks, in which the blades are generally machined out
  of the same piece of material as the disk, to form a one-piece rotor stage. The advantage is considerable weight savings. So we simply
  adapted this technology, generally used in high-pressure
  compressors, to the low-pressure compressor.
  “In today’s jet engines, the low-pressure compressor is
  based on a cylindrical drum comprising circular chan-
  nels in which the blades are slotted. With the BluM, we
  maintain the basic drum concept, simple and inexpen-
  sive to manufacture, and then use friction welding to
  attach the blades. The friction welding process, which
  is starting to be more widely used in aircraft engines, is
  both accurate and strong, because it maintains the me-
  chanical properties of titanium. Furthermore, it provides
  a significant reduction in rotor weight, of about 20%.
  “The drum is now ready, and we will shortly start blade
  welding, with tests on an engine test rig slated for next
  year. The current development timetable provides for
  the incorporation of this new compressor rotor design
  in the new-generation engines that will enter service
  towards 2020.”                                                Techspace Aero’s new lightweight bladed drum, or BluM                        Safran Group

Solo Aviation named Authorized Serv-               Hamilton Sundstrand, AVIC EM final-                   Ethiopian Airlines signs 777 Compo-
ice Center for GE M601 and H80s                    ize joint venture agreement                           nent Services agreement
Solo Aviation signed an agreement with GE Avi-     Hamilton Sundstrand Corporation and AVIC              Ethiopian Airlines signed an agreement to par-
ation to become an Authorized Service Center       Electromechanical Systems Company Limited             ticipate in the 777 Component Services Pro-
for the M601 and H80 turboprop engines. Solo       (AVIC EM) finalized plans to co-develop and           gram (CSP), a parts-provisioning program that
Aviation will offer comprehensive line mainte-     manufacture the electric power system for the         significantly reduces the airline’s up-front invest-
nance, removals and re-installations of engines    new Commercial Aviation Corporation of China          ment in spare parts and offers a quick and reli-
and LRUs and engine spares for the M601 and        (COMAC) C919 jetliner. The two companies an-          able supply of critical parts from a pool shared
H80 engine families. GE Aviation will provide      nounced a framework agreement for the joint           by participating 777 operators. Ethiopian Air-
Solo Aviation with comprehensive material sup-     venture at the Zhuhai Air Show in November,           lines is the 13th airline in the 777 Component
port and training. Formerly know as Hangar 4,      2010. This agreement finalizes the commitment         Services Program, offered jointly by Boeing and
Solo Aviation Systems, based in Ocumare del        to form a new company that will develop and           Air France Industries KLM Engineering & Main-
Tuy, Venezuela, is an engine maintenance and       manufacture the C919’s electrical power sys-          tenance. Ethiopian’s agreement for the 777 CSP
services provider, attending to a wide range of    tem, including generation and distribution, and       initially covers three 777-200LRs jetliners, all
aircraft models in private, corporate and com-     will serve as a tier one supplier to COMAC on         delivered since November 2010. Two additional
mercial aviation. Solo Aviation provides mainte-   that program. This joint venture will be located      deliveries are scheduled for this year, one in late
nance and services for M601 engines installed      in Xi’an and plans are in place to begin facility     April and the second in the third quarter. The
on L410 aircraft.                                  development in June, 2011.                            airplanes were ordered in 2009.

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                                                Regional Aircraft                    Regional Engines               Aircraft & Engine Management

                                                   ATR 42/72                        All PW100 series,
                                            Dash 8 100/200/300/400                  including PW150                     Consignments & Purchasing
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                                                  Embraer 120                           AE3007A1
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   Evidently, lots of designers   offering competitive and      easy and cost effective
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inventories in Copenhagen,        overhaul services for
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Miami                             Brakes                        Flat Rate (CFR)
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selected component News                                                                                                                                        8

  SIA Engineering Company and Sagem launch avionics centre in Singapore
  SIA Engineering Company (SIAEC), in partnership with Sagem (SAFRAN Group), launched a state-of-the-art avionics facility in Singapore.
  The new facility of Safran Electronics Asia (SEA), a joint venture owned 49% by SIAEC and 51% by Sagem, was officially opened on April
  6th. With the increasing trend of new aircraft adopting digital technology, the joint venture is poised to tap the growing avionics mainte-
  nance, repair and overhaul (MRO) market. The new facility at Changi North Rise supports the latest aircraft types and is designed for expan-
  sion of capabilities to handle next-generation aircraft, such as the
  B787 Dreamliner and the Airbus A350. The avionics joint venture is
  the second partnership between SIAEC and SAFRAN; the first was
  with Messier Services Asia, a SAFRAN subsidiary specialising in the
  repair and overhaul of landing gear systems.
  Sagem chair and CEO Jean-Lin Fournereaux said that the new fa-
  cility symbolized SAFRAN’s long-term commitment to Singapore,
  which had become the primary operational centre for the Group’s
  MRO operations in Asia.
  SIAEC CEO William Tan added that the new facility is ‘one of our
  15 joint ventures in Singapore forged with leading OEMs. Over
  the years, SIAEC and its OEM partners have invested S$600 mil-
  lion in establishing cutting-edge aerospace capabilities in Singapore.
  Through these OEM facilities, airlines have direct access to OEM
  support, spares and proprietary technology. These benefits inte-
  grate seamlessly with the MRO services of SIAEC to offer airlines a Singapore government minister Mrs Lim Hwee Hua, flanked by Stephen Lee, chair of SIA
  one-stop solution to achieve higher operational reliability and faster and SIAEC, and Sagem chair and CEO Jean-Lin Fournereaux, at the signing ceremony at
  turnaround at lower cost”.                                             the opening of the Safran Electronics Asia facility.                         SIAEC

Chromalloy joins Rolls-Royce team to                   international customers’, a Mubadala execu-          provide installation, maintenance, repair and
develop new Commonwealth Center                        tive told Arabian Business. Strata supplies flap     upkeep services. SCHOTT Lighting and Imag-
for Advanced Manufacturing                             track bearings for Airbus A330 and A340s,            ing will be contributing its expertise and ex-
                                                       part of a $1 billion business that also includes     perience in the area of lighting systems. The
Chromalloy, the world’s largest independent            providing ailerons to Airbus, flap track fairings    first product that the two firms are working on
supplier of advanced repairs, coatings and FAA-        for the A380 ‘superjumbo’ and empennage              together is a unique new lighting technology.
approved replacement parts for turbine airfoils        or tail sections for ATR.                            The combination of glass elements and light
and critical engine components, announced                                                                   diodes culminates in an efficient light source
that it will partner with Rolls-Royce as an Organ-     Sabena technics signs full component                 that helps lower maintenance costs and ex-
izing Industry Member on the development of                                                                 tends the service life.
                                                       support deal with Alba Star
the new Commonwealth Center for Advanced
Manufacturing (CCAM). The CCAM manu-                   Sabena technics, specialized in civil and mili-      Fokker Services and Bombardier enter
facturing research center will be developed at         tary aircraft maintenance, signed a three-year
                                                                                                            strategic alliance
Crosspointe in Prince George County, Virginia,         contract with the Spanish start-up cargo and
as a public / private partnership between Rolls-       passenger operator Alba Star to perform full         Bombardier Aerospace entered into a strategic
Royce, eight Organizing Industry Member com-           component support services on its B737-400           alliance with Fokker Services for the launch of
panies, and Virginia’s leading public research         fleet. Sabena technics has started support-          FLY, a new program aimed at improving the
facilities – the University of Virginia and Virginia   ing Alba Star through its Integrated services        availability of components and reducing the
Tech. The 50,000 square foot CCAM research             business unit, dedicated to full support con-        cost of repairs for Dash 8/Q-Series 100/200/300
center will be built on land adjacent to the new       tracts. Services to be provided for the Palma        aircraft operators. The program will also help
Rolls-Royce manufacturing facility. Construction       de Mallorca and Milan based operator are for         operators to better predict and budget for ma-
will begin in 2013.                                    an initial 3-year period. They will include com-     terial maintenance. The FLY program will offer
                                                       ponent repair and overhaul, pool access and          operators guaranteed availability of serviceable
Mubadala company to produce spoil-                     logistic support.                                    components, a factor that will appreciably ex-
ers for Boeing 787 Dreamliner                                                                               tend the longevity of out-of-production Dash
                                                       Lufthansa Technik and SCHOTT plan                    8/Q-Series 100/200/300 aircraft. The program
Strata, the UAE aerospace company owned                                                                     also provides customized component repair and
                                                       to cooperate on cabin lighting
by Abu Dhabi investment group Mubadala,                                                                     overhaul services on a cost-by-the-hour basis,
signed a subcontracting deal to supply the             Lufthansa Technik and SCHOTT AG plan to              allowing operators to better manage the life cy-
wing flaps, or spoilers, for Boeing’s long-de-         work together more closely on cabin light-           cle cost of their aircraft. The service is modeled
layed 787 Dreamliner. The deal was sealed              ing for passenger planes. Conceived to be a          on Fokker Services’ well-established and highly
through FACC, an Austrian-based contractor             “one-stop shop” strategy, the collaboration          successful ABACUS cost-by-the-hour program,
of both Boeing and Airbus, and becomes ef-             will cover the entire process chain, ranging         which has been bringing cost predictability and
fective in 2012. Strata’s Al Ain plant, which          from the design of lighting to manufactur-           parts availability to operators of post-produc-
was completed last August, is an aerostruc-            ing, installation and approvals, but also service    tion models for 17 years. Under the FLY pro-
ture composite manufacturing facility, and the         over the course of the entire product lifecycle.     gram, Fokker Services will execute repairs on
deal is a ‘signficant milestone in its progress        Lufthansa Technik will concentrate on the area       components and ensure the availability of parts
towards a full-service offering for local and          of lighting control, approval and validation and     through its large component exchange pool.

                                                                                                                               AviTrader MRO - April 2011
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cover story - engine maintenance                                                                                                                       10

An OEM business or room for all?
Engine maintenance is big business, but the market is increasingly domi-
nated by the OEMs . Is there room for independents, and if so, what do
they need to do to position themselves as attractive alternatives?
e   NgiNe mAiNteNANce is big business
    by any industry standard. The sector
turned over upwards of $15 billion last year,
                                                    of the global engine maintenance market (see
                                                    table at right) says that there is plenty of room
                                                    for in-house airline MRO providers as well
                                                                                                         “OEMs play a major
                                                                                                         role, but customers
                                                                                                         typically do not like
and that figure will rise by at least 40% by        as third-party independent MROs to handle            monopolies. So you
2017 to reach well over $21 billion, accord-        worldwide demand for engine maintenance.             see partnerships with
ing to figures from the International Bureau of                                                          airlines and established
Aviation (IBA). Engines are the most expensive      “GE and its joint venture CFM have more than         MROs in various for-
components on an aircraft, and their upkeep         23,000 engines in service on a variety of aircraft   mats, depending on
represents 35% of the total MRO spend each          from regional jets to widebody aircraft,” says       the OEM. Also, for
year. Less than a quarter of that work is carried   Ovington. “Of these engines in service, we’ll        certain engine models
out in-house by the airlines themselves.            see about 4,000 shop visits per year and we an-      the OEMs will not have
                                                    ticipate this to remain at this level and maybe      the capacity to handle SR Technics’ Walschot
With such a large volume of maintenance re-         even increase as more engines enter service                volume in their
quired each year, amid                                                                                         own facilities so again, they set up partner-
forecasts of a tripling “We’ll see about 4,000 shop visits per year for ge and                                 ships.“
of the global fleet be-
                            cfm’s 23,000 engines in service. ge has the capacity to
tween now and 2029,                                                                                         Singapore’s ST Aerospace, like SR Technics,
surely it stands to rea- handle about a third of these at its branded facilities.”                          has a number of cooperative agreements
son that there’s enough Brian Ovington, senior marketing manager for MRO, GE Aviation                       with OEMs that allows it to develop and
work out there to keep                                                                                      deliver proven, cost-effective solutions
a whole engine MRO sector healthy and other- based on record orders that were made in the that ‘increase asset value and reduce lifecycle
wise engaged? You’d certainly think so; yet a last part of the decade. GE has the capacity to cost’. Choo Han Khoon, the company’s execu-
number of industry professionals consulted by handle about a third of these shop visits at its tive vice president, Engine Total Support, says
AviTrader MRO say there’s not.                     GE branded facilities.”                            that partnerships with OEMs like GE allows
                                                                                                      it to offer a ‘solution or a product that is of
Leading the chorus are the lessors, who point Customers see the value in having an OEM known pedigree and configuration’.
the finger at OEM all-inclusive care packages service their engines, says Ovington. “GE con-
which, they say, are smothering competition in tinues to see a 4-5% growth in the backlog              Engine Maintenance: Market Share
the MRO marketplace. Jon Sharp, president and of long term agreement each year – with the
                                                                                                       Engine MRO           Country          Mkt share
CEO of ELFC, remarks on the sharp increase in current backlog of service contracts with 140
the OEMs’ market share of the engine main- customers valued at $59 billion. Additionally,              GE Aviation          USA/UK             12%
tenance business, from around 15% a decade with GE’s extensive in-house repair capability,             Lufthansa Technik    Germany (HQ)       6%
ago to nearly 50% today, with the ‘consequent and access to the largest supply of new and
                                                                                                       Delta TechOps        USA                4%
worrying impact on competitive options’. Wil- used materials, we can offer competitive so-
lis Lease president Charles Willis weighs in, lutions ranging from one shop visit to large,            Snecma               France             4%
suggesting that there are serious anti-trust and multi-year agreements.”                               MTU                  Germany            3%
accounting questions to be asked about OEM                                                             IBA
total care-type packages - and whether they GE has an extensive network of OEM and
have ‘really sold their assets, as they still have partner MROs, including third-party provid- “Engine maintenance is not an OEM business
effective eco-                                                                    ers like Air per se,” said Choon. “We believe that there
nomic and “engine maintenance is not an oem business                              F r a n c e / K L M is room in the engine MRO industry for airline
operational per se - we believe there is room in the engine Engineering & shops and independent MRO specialists like
control over                                                                      Maintenance, ourselves. We offer complementary service of-
them’. And mro industry for airline shops and independ-                           ST Aerospace fering to OEMs’ after-market solutions. In many
the exclusive ent mro specialists like ourselves.”                                and Standard instances, engine OEMs may not be able to
partnerships Choon Han Khoon, executive VP, Engine Total Support                  Aero, which cover a comprehensive range of services. That is
signed      by ST Aerospace                                                       can now of- where we come in; we’re able to provide more
OEMs with                                                                         fer customer customizable solutions with a geographical
third-party MRO providers excluding the use of workscopes similar to what OEMs provide, proximity to customers.”
PMA parts opens up a whole new kettle of fish along with OEM material.
- a debate we’ll explore later in this article.                                                       Smaller companies, too, can find their niche in
                                                   There is room for independent shops, provided the ‘backshop’ of the OEM and their MRO part-
But let’s hear from the original equipment they have some sort of joint venture or full-sup- ners. Andrew Walmsley, VP of sales and mar-
manufacturers themselves first. Brian Oving- port agreement, or both, with an OEM, accord- keting at Jet Aviation Specialists, a small fam-
ton, senior marketing manager for MRO at GE ing to Frank Walschot, senior vice president, en- ily-owned independent repair facility in Miami,
Aviation, which has the largest single chunk gine maintenance at Zurich-based SR Technics. says the company has found a role as a ‘reliable

                                                                                                                            AviTrader MRO - April 2011
cover story - engine maintenance

partner for either niche repairs, or repairs on parts no longer deemed
core products. As larger organizations struggle to match resources to
capacity demands, we are able to supply them with the flexibility to
                                                                              Engine sales, exchange, leasing, material supply and
meet the peaks and surges that come with market changes.”                     management. Dedicated, experienced customer and
                                                                              technical support services. All this from a proven,
The RISe and RISe of The oemS
The OEM weapon in securing an ever-larger slice of the engine main-           award-winning 24/7 world-leading service provider.
tenance pie is two-pronged. First of all, any MRO wishing to repair
engines must have a product repair licence from the OEM in ques-
tion. “At the end of the line, you have to deal with the OEM to be
able to fix their engines,” said one industry observer, ‘so you might
as well maximize your relationship with them through a partnership,
which will give you reduced prices on parts . In return, you’re gener-
ally obliged only to use parts manufactured by that OEM.”

And secondly, the OEMs have been phenomenally successfully in
expanding their market share through long-term support contracts
sealed as part of the initital engine sale. It takes years and millions
in investment to design an engine, but the real return on investment
comes from component sales. “Selling spare parts is the OEMs’ bread
and butter,” said another observer. “They will do whatever they can
to protect their market.”

 “leasing companies own 32% of the aircraft
 order backlog and so they should have an
 important voice. lessors do not like these all-
 inclusive care packages, because there is no
 choice of mro provider.”
 Jon Sharp, president and CEO, ELFC

An example of the OEMs’ continued expansion into the MRO business,
according to Steve Williams, director of technical purchasing at AJ
Walter Aviation, can be seen with Snecma’s growth in its services divi-
sion by purchasing or creating various commercial ventures, such as its
Snecma Morocco, Snecma Brussels and Snecma Americas subsidiaries.
Snecma has also diversified its product offering to increase its market
share and now offer a full range of component repair services directly
from the Snecma Chatellerault facility, to their own engine shops and
the various airline facilities such as Finnair and Iberia, allowing them to
capture an even greater amount of the market.
                                                                                   are for people
As a result, says Williams, the independents are left to compete for a               who can’t
decreasing percentage of shop visits. The only good piece of news for             build engines”
them is “the continued expansion of the global airlines market over the
last decade and the subsequent growth in the MRO sector. This has                   Enzo Ferrari
masked the effect of a lower percentage of engines available to the
independent provider.”

That reduction in the supply of repair facilities for the customer is ‘not
healthy’, according to ELFC’s Sharp. Leasing companies own 32% of             Contact us today and see what AJW
the aircraft order backlog, he explains, and so should have an impor-
tant voice. “Lessors do not like these all-inclusive care packages, be-       can do for you.
cause there is no choice of MRO provider: the OEM keeps the main-
tenance reserves, thereby reducing lessor security and the portability

of the fund accumulated from one lessee to the next is questionable.
If airline shops and third-party independent MROs are to stop the ero-
sion of their market share, they have to develop competing packages
and somehow get them in at the point of sale of the engine.”

Enrique Robledo Martín, director of power plant maintenance at Ibe-           A J Walter Aviation
ria Maintenance, agrees that reduced competition means ‘less cost             www.ajw-aviation.com
reduction presures and less overall improvement’. “In other industries,       tel: +44 1403 711777
like the pharmaceutical industry, there is an agreement which allows          email: engines@ajw-aviation.com
the research and development return for 10 years, after which com-

                                                                              Visit us at Airline Purchasing & Maintenance Expo,
                                                                              4-5 May, Olympia Grand Hall, London UK, Stand K8
cover story - engine maintenance                                                                                                                             12

                          petition is promoted,         GE’s Ovington says that many of his customers
                          which reduces the price       have chosen to go the OEM route because of
                          of medications. I think       ‘relationships beyond services’ and the ‘broad-
                          this industry needs to        er support’ offered through solutions like GE’s
                          think in the long term        OnPoint, which offers “low cost of ownership,
                          and find solutions to         with world-class fulfillment, customer support
                          promote competition           and commercial flexibility. Beyond maintenance
                          in the engine mainte-         needs, customers are also looking for way to
                          nance sector.”                better manage all the data that they have, and
                                                        GE Aviation has developed myEngines, which
                      Indeed, this lack of              consists of digital app suites to help customers
Steve Williams of AJ  competition could even            better manage this data.”
Walter Aviation       throw up serious anti-
                      trust issues, according Ovington underscores the mutually beneficial
to Charles Willis, who says OEMs should be arrangements with its network of independ-
‘careful about whether they’ve really sold their ent shops. The choice of MRO providers for
engines’ through their warranty programs, or airlines which operate GE and CFM-powered
whether they in                                                                  aircraft
fact still have ef- “the oems are picking up an ever-increasing                  differenti-
fective economic                                                                 ates    us,
and operational      portion of the available mro business. the                  he says,
control over them. only good piece of news for the independ-                     “from oth-
He says that les- ents is the continued expansion of the global                  er engine                  Weld repair process on a CF6-50 combustor dome
                                                                                                            Jet Aviation Specialists
sors and airlines airline market over the last decade and the                    OEMs, and
alike tend to be                                                                 we believe
                                                                                                            zaz works with many shops that pride them-
‘suspicious’ about subsequent growth in the mro sector.”                         customers
                                                                                                            selves on OEM-quality standards of work, fre-
OEM       intentions Steve Williams, director of technical purchasing, AJ Walter value this
                                                                                                            quently have shorter lead time TATs and offer
when they see                                                                    choice.”
                                                                                                            lower prices.
hourly repair management or total care agree-
                                                        Even so, there are many who believe that inde-
ments. “The airlines continue to want alterna-                                                              Iberia’s Robledo points out that independents
                                                        pendent MROs have the agility, the skill - and
tives to the OEMs.”                                                                                         and third-parties can offer a set of solutions
                                                        the hunger - to outplay the OEMs at their own
                                                        game. Mike Cazaz, president of asset man-           that the OEMs “normally do not have: com-
WhaT’S a 3Rd-paRTy mRo To do?                                                                               plete operational support for components,
With GE holding 12% of the global engine                agement company Werner Aero Services, says
                                                        there are ‘many independent shops that do           airframe and engines, focus on repair and not
maintenance market, double the share of the                                                                 replace, offers for non-OEM parts and repairs,
next entrant, LHT (and three times that of third-       just as good a job (and sometime better) than
                                                        OEMs. They’ve invested in tools, expertise and      operator experience and, for ageing types of
placed Delta TechOps) and Snecma, through its                                                               engines, they probably know the engines bet-
50% stake in CFMI, holding fourth place with            technology to handle the specialized work.
                                                        And let’s face it, OEMs, in their current capac-    ter than the manufacturers themselves”.
4%, it’s clear that OEMs are the ones to beat -
and that they take a lot of heat from their rivals.     ity, can not handle the amount of work on the
                                                                                                            When they’re not tied down by long-term total
                                                        engines that are out on the market today.”
                                                                                                            care-type deals, airlines can afford to pick and
But it’s hard to ignore the benefits of a total-
                                                        The three key buying factors that airlines con-     choose the best deals; indeed, they are increas-
care type deal with an OEM for many carriers,
                                                        sider when choosing an engine MRO partner,          ingly driven by necessity to pressure service
particularly those with big fleets, which will
                                                        quality, cost and turnaround time (TAT) can         providers for the lowest-cost solutions in this
get attractive service packages as part of their
                                                        turn the tables in an independent’s favour. Ca-     post-recession era coloured as it is by rising oil
original engine deals.
                                                                                                            prices and cut-throat competition.

                                                                                                            A key area for cost reduction, and a subject
                                                                                                            that we’ve been leading up to, is, of course,
                                                                                                            the issue of PMA parts. AJ Walter’s Williams
                                                                                                            believes that airlines are ‘increasingly accepting
                                                                                                            of the use of PMA material, Designated Engi-
                                                                                                            neering Representatives (DER) repair schemes
                                                                                                            and the use of used serviceable material - all
                                                                                                            of which have a major impact on the cost of a
                                                                                                            shop visit. Obviously, the OEMs have a natural
                                                                                                            resistance to some of these key parameters,
                                                                                                            and this provides the independents with a con-
                                                                                                            siderable cost advantage”.

                                                                                                            One airline supply chain executive summed it
                                                                                                            up by saying, that from an airline point of view,
                                                                                                            “more and more PMA parts are being developed
                                                                                                            for new generation aircraft. I would certainly
                                                                                                            install PMA parts if they save money. ” (see
Engineers at work in Iberia Maintenance’s engine shop                                              Iberia   overleaf for more on the PMA debate).

                                                                                                                                       AviTrader MRO - April 2011
cover story - the pmA Debate                                                                                                                       13

 Weighing in on the PMA debate: Where we are now
 The issue of ParTs ManfacTurer aPProval (PMa), or The use of parts manufactured by firms other than an OEM, continues to
 ignite fiery debate in the MRO sector – especially in the USA, where industry leaders like Chromalloy, Heico and Wencor have been supplying
 the industry with PMA parts for decades.

 This month is significant in that a 2009 FAA revision to US regulations harmonizing standards for aircraft parts comes into effect. As of April
 16th, regulations for all quality systems will be the same for all production approvals – whether implemented by OEMs or by PMA manufactur-
 ers. In reality, there won’t be any major changes, because all manufacturers have been held to the same standards, but the process will now
 be clearer in FAA regulations.
                                               The total annual PMA spend, estimated to be $400 million, is a very small percentage of the
                                               overall parts outlay, but it is likely to grow as airlines look for new ways to contain costs in an era
                                               of spiking fuel costs. There is strong resistance from OEMs, which have been successful in locking
                                               up carriers in long-term ‘total care’ type contracts, as well as lessors concerned about residual
                                               values of their stables of aircraft and engines – but with oil at over $100 a barrel these days, PMA
                                               parts and non-OEM Designated Engineering Representatives (DER) repairs costing at least
                                               30% less than those offered by OEMs begin to look increasingly attractive.
                                               The key distinction is where the PMA part is used. “We all fly planes with PMA parts,” said one
                                               executive. When an OEM-manufactured sign asking passengers to ‘Please wipe the basin after use’
                                               costs $450 and a similar PMA sign costs $80, the decision to go PMA is not very difficult. But move
                                               on up the food chain to highly safety-relevant parts, and the rules change: “Yes, we’ve seen an
                                               opening up in recent years, but the ‘no-go’ area remains engine gas path parts,” said another.
 They look like the real thing...
                                                GE‘s position is clear: “GE continues to be concerned with part-level changes introduced via
 PMA,” Jeffrey A. Conner, director of Alternate Material Strategies for GE Aviation, told AviTrader MRO. “Existing FAA rules regarding PMA
 (and repair) allow for the introduction of design, material and/or manufacturing process changes at the part level without the involvement
 of the Type Certificate Holder for the engine into which the changes are being introduced. Maintaining continued airworthiness of aircraft
 engines requires a rigorous assessment of the impact of part-level changes on other parts, sub-systems and systems in the engine, especially
 with respect to life-limited parts (LLP) and engine operability.
 Influencing parts define the bounday conditions under which LLP operate. GE believes current FAA rules and guidance material “do not ad-
 equately address system level interactions, and, thus, may not ensure the continued airworthiness of turbine engine LLP when part level design
 changes are introduced on critical influencing parts”.
 Regardless of when in the life cycle of an engine replacement parts are introduced, GE’s concern centers around “management of the mixed
 engine configurations that result from introduction of design, material, or manufacturing process changes at the part level. Introduction of
 multiple replacement and modification parts, each embodying these changes versus the type design, create unique configurations that have
 never been tested at the system or engine level. The resulting combination of parts (i.e. the engine) has never been tested as a system to
 demonstrate compliance with FAA or EASA engine-level certification requirements or to validate the applicability of Instructions for Continued
 Airworthiness published for the engine by the Type Certificate Holder.”
 It’s a fair assessment. While the constituent PMA parts of an engine may have met FAA airwor-
 thiness standards, the combination of these parts, when put together in the repair of an engine,
 have not. But companies like Chromalloy, which manufacture gas path components, stand by
 their assertion that PMA parts meet the same airworthiness standards as OEM parts and that
 while the use of PMA parts has grown substantially over the past two decades, the number of
 airworthiness directives has not. PMA parts and DER repairs for gas path components can cost
 an airline up to 50% less than similar parts and work from an OEM.
 Chromalloy specialises in the manufacture of highly safety-relevant engine parts. Its BELAC
 subsidiary, which produces high-pressure turbine blades, is part-owned by Lufthansa Technik
 and United Airlines, indicating a significant involvement of major MRO players in the develop-
 ment of PMA in critical areas. Other firms like Heico and Wencor focus more on non-critical .. but do they work like the real thing? PMA engine
                                                                                                parts and seals.
 consumables and expendables.                                                                   Both photos courtesy of Wencor
 Whatever the destination of the part, Wencor president Russ Adamson says that “PMAs are
 crucial for an independent MRO shop to compete with OEMs. If MROs only rely on the OEM, they will always be at a disadvantage because
 they are fundamentally competitors. MROs can be most successful when they partner with low cost parts and labour.”
 The cost issue is clear, but the perception of quality remains controversial. Companies like Chromalloy, with backing from LHT and United,
 insist that FAA approval equates to airworthiness, whether it be PMA or OEM-built, and that lingering doubts over quality are fomented by
 OEMs determined to protect their business. As the majority of aircraft in operation today are leased, it’s the lessors, then, with remarket-
 ability as their raison d’être, that share the driving seat with the OEMs. “It’s not a debate about whether to use PMA parts or not,”, said
 one industry source. “It’s about finding the cheapest part. But without PMA, we’re at the mercy of the OEMs. The builder and the lessor
 are controlling the show.”

                                                                                                                         AviTrader MRO - April 2011
Cover Story - The PMA Debate                                                                                                                              14

Weighing in on the PMA debate: What they‘re saying - and why
JEFFREY A. CONNER, Director of Alternate Material                         RUSS ADAMSON, President, Wencor: “There is a shift happening
Strategies for GE Aviation: “Lessors that GE has spoken                    where most lessors realize they have customers who want to use PMA
with focus on the criticality of parts. Many airframe parts, window         parts and are willing to discuss this at the contract negotiation stage.
shades and tray tables, for example, are not critical to the safe          The perception is that remarketing an aircraft is impeded by PMA. The
operation of the aircraft. Consequently, the use of PMA parts for           fact is that FAA-approved parts on an aircraft do not reduce its value.
these applications would not be a concern to the lessor. However,               Bilateral agreements throughout the world make the remarketing
these same lessors typically take a much different approach with           argument very flimsy. PMAs are crucial for an independent MRO shop
respect to use of PMA in engines where even “simple” parts can             to compete with OEMs. Upwards of 70% of the costs associated with
have significant impact on engine operability and life-limited parts          a component maintenance shop visit is tied to spare parts that need
management as a result of system interactions.”                             to be installed. If MROs only rely on the OEM they will always be at a
                                                                                      disadvantage because they are fundamentally competitors.”

 CHOO HAN KHOON, Executive VP, Engine Total Support, ST                                FRANK WALSCHOT, SVP Engine Maintenance, SR
 Aerospace: “Many OEMs align themselves with major service                              Technics: “PMA is, and will continue to remain part
 providers like ST Aerospace, especially in view of our preference in                  of our business, but the growth for engine parts may
 using OEM solutions for after-sales support and our responsible at-                     be limited due to lack of acceptance by certain key
 titudes in ensuring their intellectual property is protected. We see                players such as leasing companies. Also, more recently-
 this as a win-win approach in offering our services.”                               offered OEM material solutions and product upgrades
                                                                                        make PMA parts less attractive. However, as engines
                                                                                           mature and move into different carrier segments,
 JON SHARP, President and CEO, ELFC: “PMA is                                         there is still some room for some further development
 not a big issue for ELF as our fleet is very modern                                             on engines with a significant installed base.“
 and not much PMA exists for new engine types.
 Neither do I think that PMA is such a big issue
 world-wide in proportion to the amount of hot air
                                                                         HUMBERTO PALHA, Quality Assurance General Manager, TAP
 it generates.
                                                                   Maintenance & Engineering: “Although TAP Maintenance and Engin-
 “The acceptable PMA and DER is typically on                        eering has no objection to using PMA parts listed on the FAA database,
 non-critical parts. No engine lessor would accept                   the company has as a policy to ask all its customer whether PMA parts
 PMA in the engine gas path for example. We do                     can be used on their aircraft. So, only after customer acceptance can TAP
 not accept PMA because some airlines don’t, so                              Maintenance and Engineering consider the use of PMA parts.”
 we would be excluded from leasing to them if our
 engine had PMA in it.
 “PMA is not such a big deal. It is a tiny percentage                  STEVE WILLIAMS, Director of Technical Purchasing AJ Walters:
 of parts spend. The bigger issue is DER. Third-                         “Going forward, the use of PMA’s is going to rise; the development
 party MROs have to develop this activity to combat                         of PMA’s is increasing and the acceptance of the airline comunity
 the total care type growth of the OEM MRO par-                              is helping to drive this phenomena. However, with the growing
 ticularly on new engine types.”.                                        availablity of used serviceable material in the market place and the
                                                                       ever-increasing use of more exotic repair schemes, the need for PMA
                                                                       is reducing. MROs like LHT are trying to reach a 100% yield for some
 ABDOL MOABERY, President, GA Telesis: “We do                             repair processes and once achieved this makes the requirement for
 not allow PMA parts to be installed in our leased engines                                      PMA virtually obsolete for an ageing engine.”
 without our prior written approval. While there are limited
 areas where we will consider it, we feel that PMA parts limit
 our ability to effectively lease or repair our engines globally        RICHARD POUTIER, SVP, ILFC: “PMA parts are not controversial to
 without restrictions.                                                     us. We have industry standards: the FAA, EASA, China’s CAAC are
                                                                        all working together to harmonize the industry. If they approve the
 We have seen PMA manufacturers develop parts for engines                PMA process,for a non-critical part, I’ll put my faith in it. We ALL fly
 still in production, for example the CFM56-7B. We do not              aircraft with PMA parts in them. It’s a question of cost-efficiency. Air-
 think this makes much sense as the potential benefit of a             lines can’t do without them. PMA parts in some cases are the avenue
 PMA part is to reduce costs on parts for an ageing engine.”

  ANDREW WALMSLEY VP Sales & Marketing, Jet Aviation Specialists: “An issue with PMA parts has been the OEM’s push
  to not accept these parts for repair or installation back into engines. What this has meant is that most of the brokers are accept-
  ing this condition (no PMA), so that it does not restrict their ability to move inventory. In effect the OEMs have been successful in
  influencing the market beyond their own facilities and needs.”

                                                                          Background photo: The highly safety-relevant PMA High Pressure Turbine Blade produced
                                                                            by Chromalloy’s joint venture company BELAC, co-owned with LHT, United and Alitalia

                                                                                                                            AviTrader MRO - April 2011
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industry interview                                                                                                                                     16

 Charles Willis, president and CEO of Willis Lease: On engine leasing, past, present and future
                                  CHARLES WILLIS IS REGARDED AS ONE OF THE PIONEERS of the aircraft engine leasing business. He
                                  is the founder, president and chief executive of the highly-regarded independent engine leasing firm Willis
                                  Lease, which today has a porfolio worth well over $1 billion. With a business acumen built up over 40 years
                                  in the aviation industry, Willis was notably able to steer his firm profitably through the downturn of 2008-09,
                                  a time when many of his rivals struggled.

                                  Successful businesspeople have usually had their share of hard knocks on the way up, and Willis is no excep-
                                  tion. Born in Boston, raised in New York state and Alaska, and educated partly at a boys’ boarding school in
                                  small-town Canada, Willis’ first taste of the airline industry was north of the 49th parallel, in Alaska, in fact,
                                  after his father, a decorated World War II pilot, took over a near-defunct Alaska Airlines in 1957. He worked
                                  at the airline in a sales and operational capacity until his father left during a board dispute, whereupon he
                                  soon jumped ship as well to found his first engine leasing business, the Charles F. Willis Company.

                                    Why engine leasing, you might ask? Willis explains that he did not have a formal university education and “as such
                                    couldn’t get a regular job. I also felt there was a need for engine leasing as GPA and ILFC had just begun in the
 aircraft sector. The difference from them was that I started it with no capital at all. We just built it one engine at a time over the next 35 years.”

 “I was constantly in debt and no one - none of the banks - would provide funding. No one really understood nor cared about engine leasing.
 In fact, I even published a newsletter called World Aero-Engine Review, with the aim of informing banks and airlines about the benefits of
 engine leasing. The first 10 years were very difficult.”

 Times have certainly changed for Willis, who now lives in London and divides his time between the UK and the USA. AviTrader MRO spoke to
 him from his offices in London where he shared his views on the past, present and future of the engine leasing business:

 (In June 2010, AviTrader MRO reported that only around 1% of spare engines were leased in the early 1990s, a figure that rose to 10% by
 2000 and to close to 25% today. Forecasts suggest that close to 40% or even more of spare engines will be leased by 2020).

 On the expansion of the engine leasing market: The market has expanded because engines have become so expensive. Also, airlines
 realize they don’t want assets to sit idle for extended periods of time. Newer engines are in greater demand and older engines are seeking
 their level pricewise. Demand is constantly increasing, especially with the advent of pooling. For example, airlines last year saved a minimum of
 approximately $200 million through pooling. They do not have to purchase engines to get their support. This will continue and grow.

 On maintaining independence: At Willis Lease, we are able to make decisions in a very short period of time without going back to home
 office or multiple committees. It is an advantage being independent as you can deal directly with all OEMs and airlines. Furthermore, we are
 able to participate in areas such as pooling that captives can’t. We are always open to offers for financial and or strategic partners. It is my
 fiduciary responsibility to seek the best value for our shareholders.

 On the OEM share of the spare engine leasing market: (The OEM share of the spare engine leasing market has tripled in the past
 10 years:AviTrader MRO June 2010) . Much of the OEM leasing activity is done to support their warranty programs. OEMs still want to be
 able to book the sale of their engines and as a result they have to be very careful not to keep either the engine’s economic ownership and /
 or support position in their ownership realm. There is a serious anti-trust and accounting question as to whether or not the OEMs really have
 sold their assets as they still have effective economic and operational control of them. I think there will be room for independents though the
 barriers to entry are quite large at this point.

 On Willis‘ recent agreement with BAE Systems: We expect BAE Systems to help broaden our abilities to capitalize on opportunities
 in the pre-owned aircraft space. There were other companies in the running, but we felt BAE had a broader reach and capability. We also felt
 that we could also grow this business together. BAE Systems has a brief to target aircraft carrying engines made by all manufacturers, although
 some engines could be hard to come by as the manufacturers have effectively shut out lessors from their market by the use of flight hour
 agreements, MRO-managed capacity and for the time being, partnerships. So it really would be a waste of our time and assets, not to mention
 a very questionable residual value play as the OEM controls the market.

 On the future of the engine leasing business: I think there will be more pooling programs in the future. For example, we are currently
 pooling CFM-56-7/5/3 engines on three continents. We are beginning CF-6-80 C2/ V2500/PW 4000/PW 100/CF-34 engines pools as well. I
 think there will continue to be few lessors in our sector. As I mentioned earlier, the barriers to entry are substantial: you need capital, technical
 staff, economically-priced engine portfolios and true knowledge of the world markets.

 I also believe we will be doing a far larger amount of potential business in regional, turboprops, widebodies, helicopters, industrial and power gen-
 eration aero-engine derivitives. I think most MROs will exit leasing , as it is not their core business and it exposes them to operational, residual and
 credit risk. I further believe the OEM will be more careful about anti-trust considerations and work more closely with lessors such as ourselves.

 The airlines are also very suspicious about OEM intentions when they see hourly repair management or total care and or thrust-by-the-hour
 agreements. Someone once said if it looks like a duck, walks like a duck and quacks like a duck, it probably is a duck’. The airlines continue
 to want alternatives to the OEM.

                                                                                                                            AviTrader MRO - April 2011
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ibA Analysis - engine maintenance and egt margin                                                                                                                  18

An Introduction to Conducting Engine Maintenance
Why do we hear so much about Exhaust Gas Temperature (EGT) margin?
IBA president and COO Phil Seymour makes it clear
tHe coNcepts                                           to manage seasonal variations in its volume           further performance
Engine maintenance is a preventative process:          of flights, or because the availability of a spare    restoration.
that is, it is designed to prevent failure tak-        engine means that the aircraft need not be
                                                                                                             The airline will mon-
ing place. This is both the safe approach to           grounded while the work takes place.
                                                                                                             itor key perform-
take, and the economic one, as it is cheaper
                                                       Removal reasons A and C above are relatively          ance indicators via
to maintain a functioning engine than repair
                                                       easy for the airline to control. Regarding rea-       reports from pilots
a broken one.
                                                       son A, the LLP life is known and utilisation of       who have to write
While engines as a whole can be ‘On Condi-             the aircraft/engine reasonably predictable, and       down the engine
tion’, some of their components are still sub-         reason C is an operator made decision. Reason         indication figures at
ject to ‘Hard Time’ limits.                            B is specific to each engine and therefore much       certain points in the IBA’s Phil Seymour
                                                       closer monitoring and inspection is required to       flight and these are collated and reviewed as
An ‘On Condition’ engine is only removed from          predict the timing for this removal reason.           so called ‘trend analysis’, this process is auto-
the aircraft when there is a specific reason for                                                             mated in the latest aircraft types. There may be
that removal. There are a range of different           eNgiNe performANce: HoW it is                         times that the results indicate wear and tear to
such reasons; broadly speaking, they are that:         moNitoreD AND HoW it cAN be                           the engine that need a physical inspection to
                                                       restoreD                                              see if damage has occurred.
    A) An LLP has reached the end of its per-          Engine technology has developed consider-
missible life and must be replaced (an LLP is a        ably in the last fifty years. In previous years en-   Any observations, such as nicks, dents, cracks
‘Hard Time’ component even in the context of           gines were maintained at a fixed (hard) life and      and burning, will be assessed in accord-
an engine or a module which may as a whole             underwent ‘overhaul’ – every part of the en-          ance with the Aircraft Maintenance Manual
be an ‘On Condition’ item); or                         gine was disassembled, inspected and replaced         (AMM). The AMM is used whilst the engine
    B) The exhaust gas temperature (EGT) has           with repaired or new parts where necessary.           is attached to the Aircraft. The AMM allows
increased to a certain point which the operator                                                              continued operation of engines using limits
considers, or the AMM indicates, is unaccept-          Airlines demanded more flexibility and cost           which would not be used if the engine was
able; or part of the engine fails one of the           reduction as technology and materials im-             undergoing a shop visit. When the engine has
checks included in the list of on-wing mainten-        proved during the 1970’s. Most modern day             been removed and is in the workshop the En-
ance tasks set out in the MPD, such as a boro-         engines offer such flexibility, with no fixed         gine Manual limits are applied.
scope inspection, or other indication or trend         life other than the life limited parts and the
                                                       ability to reduce the workscope from the old          With a new engine the pressure retention, air
analysis, suggests a problem; or                                                                             flows and rotating assemblies provide a highly
                                                       fashioned ‘overhaul’ to ‘performance’ or
   C) The operator, in order to ensure that the        ‘minimum or limited’ workscopes.                      efficient assembly. So, when an aircraft waits
engine can remain in service for a given period                                                              at the end of the runway for take-off there
into the future, decides for operational or eco-       Airlines have to balance the ‘lower’ level of         is a fairly simple set of performance criteria
nomic reasons that it is a convenient time to          workscope which will result in a lower cost           that must take place in order for the aircraft
conduct off-wing maintenance: for instance,            but also a lower time until the engine requires       to safely become airborne.

A GE90 engine on its way for performance restoration                                                              Patrick Delapierre / AFI KLM Engineering & Maintenance

                                                                                                                                  AviTrader MRO - April 2011
ibA Analysis - engine maintenance and egt margin                                                                                                        19

Firstly, the pilot will know how heavy the aircraft                                                         Whilst the EGT is the most important single
is, the temperature, and the pressure of the air-                                                           parameter, the benchmark of the overall en-
port, resulting in a take-off speed for the aircraft                                                        gine efficiency is the EGT Margin which, in very
(known as V2 – the speed at which the aircraft                                                              simple terms, is the difference between the en-
can safely take to the air). The pilot will also                                                            gines current maximum EGT compared to the
know how long the runway is and how quickly                                                                 absolute limit.
the aircraft will need to reach its V2 speed.
                                                                                                            The engine manufacturers provide a generic
As mentioned above, this precise speed will vary                                                            deterioration rate of EGT per 1,000 cycles and
from day-to-day and airport-to-airport depend-                                                              over time the airline will be able to predict,
ing upon the actual conditions. The aircraft flight                                                         with reasonable accuracy, its own deterioration
manual will provide the pilots with an engine                                                               rate based upon its specific ‘modus operandii’.
power setting that will achieve the required V2                                                             Clearly each airline operates from different air-
speed in the runway distance available.                                                                     ports and runway lengths, at different times
                                                                                                            of the day and with different loads. An airline
The engine power setting is known as ‘Engine                                                                operating from a hot and/or high environment
Pressure Ratio’ or ‘EPR’. Simply put, this is the                                                           will find that its engines will deteriorate more
indicated pressure ratio comparing the entry                                                                rapidly than an airline operating in the relative
pressure into the engine, to the exhaust pres-                                                              calm of Northern Europe (that is, the EGT mar-
sure. To reach the required EPR the pilot must                                                              gin deterioration will be more rapid). Airlines
provide the engine with fuel via the engine                                                                 may be able to operate engines at a lower
throttle in order to increase the speed of the                                                              thrust rating than the flight manual requires
compressors to provide the increase in pressure.                                                            by extending an aircraft take-off run and/or
                                                       Maintenance check on a JT8D engine    ST Aerospace
For a new engine, being relatively efficient,                                                               climbing at a slower rate. This not only reduces
the amount of fuel required to be burnt at the                                                              the wear and tear on the engine, but is also a
                                                       therefore result in higher temperatures being
combustor, which will drive the turbine, which                                                              noise abatement policy in built up areas. This is
                                                       generated in the combustor – the higher the
in turn will drive the compressors, will result in                                                          generally referred to as ‘de-rate policy’.
                                                       amount of fuel the higher the temperature.
a relatively low Fuel Flow. (Fuel Flow is meas-                                                             A typical EGT margin for a new narrow-body
                                                                      The materials used for
                                                                                                            aircraft engine will be in the order of 60 de-
 The restoration of the EGT margin to a sufficient the combustor and high                                   grees centigrade. Typical degradation of the
                                                                      pressure turbines are
 level for an economical period becomes the                           made from high grade
                                                                                                            EGT margin will be in the order of 12 degrees
 primary objective of the shop visit.                                 metals and alloys. How-
                                                                                                            for the first 1,000 cycles (as the engine ‘beds
                                                                                                            in’) and thereafter at around 4-6 degrees per
                                                                      ever, if certain temper-
                                                                                                            1,000 cycles. An engine that has been through
ured in kilograms per hour and at take-off is atures are exceeded they will fail and cause
                                                                                                            a performance restoration shop visit in accord-
typically 3,600 Kg/hr).                       considerable damage to the engine. Engines
                                                                                                            ance with the manufacturer’s workscope plan-
                                              that suffer failure at high temperature will al-
                                                                                                            ning guidelines, will achieve an EGT margin of
eNgiNe WeAr AND teAr AND its most always be beyond economical repair.
                                                                                                            around 35 to 40 degrees centigrade and de-
impAct oN egt
                                                       Therefore the most critical of all of the indi-      grade at a similar rate to the new engine.
I would now like to look at a similar process
but consider that the engine has been in use           cated parameters is the
many thousands of hours and has performed              Exhaust Gas Temperature            it is not surprising that aircraft lease contracts
thousands of take-offs and landings.                   (EGT), and it is the restora-       usually contain a specific clause that refers to
                                                       tion of the EGT margin to              the required egt margin of each engine at
The rotating blades and stators will be worn.          a sufficient level for an
The relevant seals between the various stages          economical period that be-
                                                                                                                       redelivery of the aircraft.
of the engine will be worn. The engine bear-           comes the primary objective
                                                                                                           It is therefore probably not surprising, given
ings will be less ‘tight’ and free running than the    of the shop visit.
                                                                                                           the importance of EGT margin, that aircraft
new ones. There will be nicks, tears and erosion
of parts in the compressor combustor and tur-          If I refer back to the situation of the pilot look- lease contracts usually contain a specific clause
bine areas. The hot areas of the combustor and         ing to reach a certain EPR for take-off, in the that refers to the required EGT margin of each
turbine will have burning and warping.                 worst case he may find that the required EPR engine at redelivery of the aircraft. The EGT
                                                       cannot be produced without reaching the margin therefore needs to be carefully man-
Therefore as the engine hours and cycles in-           maximum EGT limit.                                  aged in the period leading up to an aircraft re-
crease the amount of fuel required to provide                                                              turn, to prevent arguments occurring between
the same EPR will have increased from its new          If the EGT limit is exceeded a warning light will lessors and lessees.
condition state. This is because the ‘tired’ com-      illuminate and the length of time the engine
pressors and turbines will have to run at faster       operates in excess of the limit must be noted                                  The International
speeds in order to generate the same EPR, as           by the pilot (this is automated in some aircraft/                      Bureau of Aviation is an
the wear and tear will have increased the ‘gaps’       engine combinations). I have known several                                independent aviation
between the parts resulting in pressure losses.        cases where the engine has failed after exceed-
                                                                                                                consulting firm based in Leatherhead,
                                                       ing the EGT limit and the costs can be many
                                                                                                                  UK, with representation worldwide
The increased amount of fuel required will             millions of dollars.

                                                                                                                              AviTrader MRO - April 2011
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selected it News                                                                                                                              21

 LAN Goes Live with Enterprise-Wide Implementation of Mxi Technologies’
                                                                                                        Austrian Airlines receives FAA
 Maintenix Software
                                                                                                        Approval for electronic signa-
 Mxi Technologies announced that LAN Airlines (LAN), Latin America’s leading domestic and interna-      ture in AMOS
 tional passenger and cargo carrier, has gone live with an enterprise-wide implementation of Main-
 tenix. “The decision to migrate from our legacy system was based on our need for a sophisticated       Swiss-AS announced that Austrian
 system that would support LAN’s dynamic business environment,” said Ruy Lotz, Technical Support        Technik, the technical operations
 director, LAN. Mxi Technologies’ Maintenix software replaces LAN’s legacy VISaer system — along-       organisation of Austrian Airlines,
 side more than 20 other internal sub-systems — and serves as the single source for maintenance         recently received the FAA approval
 information across the organization, fully integrating with their ERP backbone.                        for “FAA Operation Specification”.
                                                                                                        The Part 145 organisation is now
                                                                                                        allowed to use the AMOS e-signa-
                                                                                                        ture in the context of - FAA Form
                                                                                                        8130-3. In addition, the usage of
                                                                                                        the AMOS e-signature solution at
                                                                                                        Austrian Technik has been approved
                                                                                                        by Austro Control GmbH, the of-
                                                                                                        ficial Austrian civil aviation agency,
                                                                                                        for - EASA Form 1 (double release).
                                                                                                        Austrian Technik is now the first Eu-
                                                                                                        ropean EASA Part 145 organisation
                                                                                                        having completed the appropriate
                                                                                                        authority approvals and operational
                                                                                                        implementation of electronic signa-
                                                                                                        ture in AMOS.

                                                                                                        BAA outsources IT services to
New Polish airline Yes chooses Commsoft’s OASES to support operations                                   Capgemini consortium

Yes Airways, a new Polish airline, chose Commsoft to provide it with market leading software            Airport company BAA is outsourc-
systems for managing the maintenance of its fleet. Yes has chosen Commsoft’s Open Aviation              ing the delivery of its IT services to a
Strategic Engineering System (“OASES”) to support its planned charter operations with Airbus            consortium led by Capgemini UK plc
A320 aircraft. Yes will be operating two Airbus A320s and the airline plans to expand, adding at        in a five-year contract valued at ap-
least four more aircraft over the next two years. The flexibility of the OASES system means that        proximately £100 million. BAA says
Commsoft can extend the support it offers to Yes as it grows, adding more modules as the client         that the move will be key to improv-
requires them. Commsoft will help rapidly implement OASES so that Yes will be able to quickly           ing the airport experience for all its
obtain CAMO approval and begin operations as planned in late April this year.                           stakeholders, including passengers,
                                                                                                        staff, airlines and retailers, at Hea-
Carson Helicopters goes live with Pentagon 2000SQL system                                               throw and the company’s other five
                                                                                                        UK airports. The consortium, assem-
Pentagon 2000 Software reported that Carson Helicopters, a Perkasie, PA-based helicopter repair         bled and led by Capgemini as prime
station, has gone live with the Pentagon 2000SQL system to run its operations. Business functions       contractor, includes SITA, Atkins,
ranging from core accounting & financials to Maintenance Repair & Overhaul are now managed by           Computacenter and Amor Group.
Pentagon 2000 Software’s flagship solution. Carson Helicopters conducted an extensive search of
commercially available aviation software and determined that Pentagon’s advanced functionality          Capgemini UK plc is part of the
and fully integrated architecture made it the clear choice. Following a successful implementation       Capgemini Group, one of the fore-
project, Carson is now fully operational with the new system and is realizing the benefits identified   most providers of consulting, tech-
in the selection process.                                                                               nology and outsourcing services.
                                                                                                        Capgemini will be responsible for
Volartec launches Alkym 5 with new features for enhanced productivity                                   the delivery of BAA’s core IT serv-
                                                                                                        ices on a day-to-day basis, includ-
Software company Volartec launched the latest version of its Alkym system for aircraft mainte-          ing applications, infrastructure and
nance management and control. Alkym 5 is a complete re-design of the original software that             projects, for some 10,000 users.
provides access to all functionalities through a new user interface, more customization, improved       The service will cover BAA’s six UK
optimization on scheduling and material resources utilizations and online access to the system’s        airports and will start in May after
Documentation and Download Centre.                                                                      a two-month transition. BAA will
                                                                                                        retain responsibility for IT strategy,
Piedmont Aviation selects Quantum Control Aviation ERP Software                                         stakeholder management and en-
                                                                                                        suring the quality of IT services in
Piedmont Aviation Component Services, a wholly-owned subsidiary of TAT Technologies and an              collaboration with Capgemini. Some
FAA/EASA Part 145 repair station based in Kernersville, N.C., recently selected Component Con-          200 staff will be eligible to transfer
trol’s Quantum Control aviation enterprise resource planning (ERP) software to streamline opera-        to Capgemini and its partners under
tions at multiple facilities. Piedmont Aviation will have up to 80 concurrent users on Quantum          TUPE conditions.
when the system goes live later this year.

                                                                                                                   AviTrader MRO - April 2011
News in brief                                                                                                                                        22

Curtiss-Wright signs deal with Boeing               PPG Industries qualifies chromate-free
                                                    exterior primer with Boeing                           Kellstrom signs consignment deal
Curtiss-Wright Corporation was selected by                                                                with ANA . . . .
Boeing to provide emergent and specialty            PPG Industries qualified a chromate-free ex-
production support for the final assembly and       terior decorative primer with Boeing, ena-            Kellstrom Commercial Aerospace signed a
delivery of the 787 Dreamliner in South Caro-       bling airlines, subcontractors and third-party        consignment agreement with ANA to sell
lina. Under the contract, Curtiss-Wright’s Mo-      painters to specify a complete “green” PPG            excess Airframe and Engine material for the
tion Control segment’s facility in Shelby, NC,      Aerospace coatings system for new or re-              777,737NG, 747-400, CF6-80C2, CFM56
and the Metal Treatment segment of Curtiss-         painted Boeing aircraft. DESOPRIME CF/CA              and PW4000 platforms.
Wright, together will provide emergent and          7502 epoxy primer is the only chromate-free
specialty production of components to Boe-          primer on Boeing’s qualified product list for          . . . and expands global distribution
ing’s 787 final assembly facility in South Caro-    its BMS 10-72 (Revision Y) Exterior Decora-           agreement with AMETEK Aero-
lina on a 24/7 basis.                               tive Paint specification. PPG Aerospace now           space & Defense
                                                    offers a complete green exterior coatings
                                                    system qualified to BMS 10-72 that includes           Kellstrom Commercial Aerospace expanded
 AJ Walter Aviation acquires site for
                                                    DESOTHANE(R) HS topcoat and DESOGEL                   its global distribution agreement with AM-
 global HG and logistics centre                                                                           ETEK Aerospace & Defense to include ex-
                                                    EAP-9 metal pretreatment.
 AJ Walter Aviation acquired a new site for                                                               clusive worldwide distribution of AMETEK
 the development of a significant global HQ                                                               Rotron Commercial aftermarket products.
                                                    StandardAero ODA issues STC for
 and logistics centre close to Gatwick Air-                                                               As part of the agreement, Kellstrom will
                                                    Falcon 900C/EX Primus Elite cockpit                   also provide 24 hour a day, seven day a
 port in the UK. The site is on a footprint of
 over 60 acres and will initially provide over      display                                               week AOG support to all of Rotron’s OEM
 175,000 square feet of purpose-built office        StandardAero Business Aviation announced              customers globally.
 and storage facilities for AJW’s extensive         that it has issued the first Supplemental Type
 range of Airbus and Boeing components,             Certification (STC) to replace aging Cathode
 engines and consumables.                                                                               Lufthansa Technik receives certifica-
                                                    Ray Tube (CRT) cockpit displays on Falcon
                                                                                                        tion for APS 2300
                                                    900C/EX aircraft with modern, state-of-the-
  . . . and wins supplier approval re-              art, Honeywell Primus Elite (DU-875) Liquid         Lufthansa Technik’s Auxiliary Power Unit (APU)
 newal from Qatar Airways                           Crystal Display (LCD) displays. This announce-      shop is expanding its service range with the ad-
                                                    ment effectively positions StandardAero             dition of the Hamilton Sundstrand APS 2300 to
 Qatar Airways Technical Division renewed           Business Aviation for additional installations      its portfolio. The Hamburg-based APU shop re-
 its supplier approval of A J Walter Aviation,      following an industry-leading install and Or-       ceived the certification of the German Federal
 the integrated aviation spares support spe-        ganization Design Authorization (ODA) proc-         Office of Civil Aviation and is offering mainte-
 cialist. Every year AJW successfully wins or       ess. As developer and owner of the STC,             nance, repair and overhaul services for the APS
 renews approvals with over twenty-five air-        StandardAero Business Aviation is the first         2300 to customers with immediate effect.The
 lines, airline engineering and OEM custom-         maintenance, repair and overhaul (MRO) pro-         APS 2300 auxiliary power unit (APU) built by
 ers from across the globe. It currently holds      vider certified to perform the installation of      Hamilton Sundstrand is used in Embraer’s E-Jet
 over 250 individual customer approvals and         Primus Elite on Falcon 900C/EX aircraft.            170/190 family. Now that the first types in this
 has been providing Qatar Airways with full
 quality assurance since 2005.
                                                     trANsActioNs iN brief
MHI commences Mitsubishi Regional
Jet assembly work                                    Boost for EADS as it acquires Canadian MRO Vector
Mitsubishi Heavy Industries Ltd. (MHI) and Mit-      Eurocopter Holding, a subsidiary of EADS and Vector Aerospace entered into a support agree-
subishi Aircraft Corporation jointly announced       ment by which Eurocopter Holding will acquire all of the issued and outstanding common shares
the commencement by MHI of assembly work             of Vector Aerospace in a deal valuing Vector Aerospace equity at approximately C$625 million.
on the next-generation Mitsubishi Regional Jet       Vector, a provider of multi-platform helicopter MRO services and of rotary and fixed-wing air-
(MRJ). Based on an order placed by Mitsubishi        craft engine repair and overhaul, will become Eurocopter‘s independent multi-platform MRO
Aircraft, which is developing the MRJ, MHI be-       services provider. Vector will maintain and develop its world-renowned brand name. In 2010,
gan riveting work on the frame structure sur-        Vector Aerospace generated a turnover of C$545 million (€400 million) – roughly the equivalent
rounding the emergency escape hatch for crew         of a quarter of Eurocopter’s current Support and Services turnover (€1.7 billion).
in the cockpit roof of the aircraft. While manu-
facture of individual parts had already begun        Goodrich Corporation signs agreement to acquire Microtecnica
last autumn, the start of assembly work indi-
cates that the MRJ project to develop Japan’s        Goodrich Corporation signed an agreement with SSCP Aero Holdings to acquire Microtecnica,
first passenger jet is progressing as scheduled.     a provider of flight control actuation systems for helicopter, regional and business aircraft, mis-
                                                     sile actuation, and aircraft thermal and environmental control systems. Total cash considera-
Turkish Technic signs APU repair serv-               tion for the acquisition is approximately €330 million.
ices contract with GECAS
                                                     Volvo Aero becomes sole owner of Volvo Aero Norge
Turkish Technic and GE Capital Aviation Servic-
es (GECAS) signed an APU repair services con-        Volvo Aero is acquiring Pratt & Whitney’s 22% stake in Volvo Aero Norge and hence becomes
tract, which covers two APS3200 from GECAS.          sole owner of the company. Volvo Aero previously acquired the 12% stake owned by Snecma,
Services will be carried out at Turkish Technic’s    following the purchase of approximately 66% of the total shares in what was then Norsk
APU shop in Istanbul, Turkey.                        Jetmotor AS in Kongsberg back in 1999.

                                                                                                                          AviTrader MRO - April 2011
            News in brief                                                                                                                                                                                                              23

            popular family of regional aircraft have clocked
            up a considerable number of flying hours, their                            lessor NeWs iN brief
            APUs are becoming due for overhaul.
                                                                                       airberlin and GECAS agree to package deal for 12 aircraft
            SuperJet International obtains Design                                      GE Capital Aviation Services and airberlin announced an agreement for the financing of 12
            Organization Approval certificate                                          new aircraft - covering five Airbus A320, three Airbus A321 and four Boeing 737-800, all
            SuperJet International (SJI) received the DOA                              equipped with CFM engines. This sale-and-lease-back transaction is covering deliveries due in
            (Design Organization Approval) Certificate from                            the first three quarters of 2012. The total deal size is approximately $ 1 billion in list prices.
            the European Aviation Safety Agency (EASA),
            which allows to carry out modifications to the                             Air Lease Corporation commences initial public offering of Class A
            base configuration of the Sukhoi Superjet 100                              Common Stock
            (SSJ100). SJI is now entitled to provide custom-
                                                                                       Air Lease Corporation announced the launch of its initial public offering of 25,000,000
            ers with any type of interiors customization in
                                                                                       shares of Class A Common Stock. All shares included in the initial public offering are being
            order to satisfy the specific airlines’ needs. All
                                                                                       sold by the Company. The estimated initial public offering price is between $25.00 and
            the variants made to the aircraft and its parts
                                                                                       $28.00 per share.
            will be agreed with the manufacturer Sukhoi
            Civil Aircraft Company.
                                                                                    bal team to deliver maintenance engineering,                               ExecuJet Dubai receives Embraer exten-
            Boeing expands GoldCare Service to                                      planning and execution and material services                               sion to base maintenance approval
            include Next-Generation 737                                             with a predictable cost based on airplane flight
                                                                                    hours. Simplified maintenance operations and                               ExecuJet Middle East announced that their Em-
            Boeing is expanding its GoldCare service to                             logistics allow GoldCare customers to focus on                             braer Legacy Authorised Service Centre agree-
            include the Next-Generation 737 product                                 their passengers while their airplanes are main-                           ment has been extended for their base mainte-
            line. The company is in advanced discussions                            tained to the highest standards of excellence                              nance capability in Dubai. This now covers up-to
            with multiple customers regarding the tailor-                           by Boeing, supported by GoldCare partners.                                 and including a 24 month (L4) inspection on the
            ing of GoldCare solutions for their 737 fleets.                         Boeing provides GoldCare customers with 24/7                               Legacy 600 and 650. ExecuJet is now the only
            GoldCare is available to 787 Dreamliner op-                             operations support using the latest technology                             Embraer Legacy Approved Maintenance Centre
            erators and Boeing is expanding the service in                          to turn airplane operating data into diagnostic                            to carry out base maintenance in the Middle
            response to airline customer demand. Under                              information that enhances efficiency and maxi-                             East region. In December last year Embraer an-
            GoldCare, Boeing leads and integrates a glo-                            mizes airplane availability.                                               nounced that they had appointed ExecuJet as

     Inventory Management*               Invoice Management*                                                                                                                         Integrated Accounting                The StockMarket
     The cornerstone for the             Provides the opportunity                                                                                                                    The Accounting Module                Quantum       users     can
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parts summary screen provides       by viewing system wide for                                                                                                                  Accounts Receivable, Accounts        other users in real time
a central viewpoint for all
information     and      activity
                                    open sales orders and
                                    determining if these can be
                                                                           MRO Business Software Integrated with                                                                Payable, and more - all totally
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related to a given part.            expedited or consolidated with                                                                                                              Purchasing, Repair, Exchange,        automatic and can include
                                    existing invoices, etc.                Aircraft Services                Manufacturing                        MRO Shop Control               Work Order and Invoicing             details such as serial numbers,
     Contact Management                  Shipping Management               Contains features such as        The Manufacturing Module             Manages the complete           modules.                             images, time life and prices.
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tool integrated with Quantum's      order consolidation process to    Routine and Non-routine           the manufacturing process           Repair and Overhaul process.                                                   Allows customers to login
entire suite of modules.                                              maintenance. Integrated with                                          Includes real-time Cost and         master parts for depreciation        to your website to search,
Enhances your ability to track      and statuses. Creates custom      Inventory,          Purchasing,   control, inspections, materials     Schedule         Management         and tracking, and to modify          view, RFQ or purchase from
critical activity such as Sales,    invoices, packing slips and       Quoting,      Billing,   Labor    planning, purchasing and            functions that put you in           transactions such as how the         your existing stock in real-
A/R, Repair Management and                                            recording and Publications        outside servicing.                  complete control of your            asset is sold, issued to a job or    time. Information such as time
Customer Service calls.             shipment.                         tracking. Bar Code module is                                          shop’s activity.                    scrapped. Transactions allowed       & cycles, tag info, scanned
                                        Purchase Orders               integrated as well for Labor           Document Imaging                                                   include purchasing, stock re     -   documents and images can be
                                                                                                                                                 Repair Manual Tracking
     Vendor Quotes*                     & Requests*                   and Task Card updates.                 Provides for scanning of                                           ceiving, invoicing, scrapping        attached to the Stock item to
                                                                                                                                                 Tracks all publications and
     Provides a tool to locate      Manages the purchasing pro   -                                      documents or images directly        revision dates and review dates.    and issuing, turn-ins, outside       assist your customer in their
                                                                           Hangar Management            into the Quantum application.                                           repair, internal work orders and     purchasing decision. You can
sources for part procurement        cess including request routing
                                                                           Allows for complete          Scanned Images or external                                              changing acquisition value.          also include and advertise your
and send out requests for           and approval by dollar amount                                                                           by part, customer and ATA.
                                                                      resource management across                                                                                                                     overhaul, manufacturing, and
quotes to multiple vendors,         and employee position. Man   -                                                                          Integrated with the Shop                 Time and Attendance
                                                                      your aircraft service center      all the critical data elements in                                                                            distribution capabilities di-
including multiple lines.           ages purchasing activity for                                                                            Control   module   providing              Accurately manages the
                                                                      with the ability to quickly       Quantum. Various formats are                                                                                 rectly to your customers.
                                    stock, non-stock and ex-                                                                                                                    collection and tracking of em-
                                                                      assign tasks, view workers        supported including PDF.
    Quotation Processing*           change.                                                                                                 for individual work orders.         ployee's work time. Shift pat-            Quantum Portal
                                                                      productivity, and manage

                                                                                                                                                                                                                         A field

                                                                                                                                                                                                                      Also field

                                                                                                                                                                                                                          Enables the presentation

    Manages the customer                Receiving & Inspection*       unassigned work in real-time                                               Event Manager
                                                                                                             Lot Costing                                                                                             of Quantum functionality to
quotation process and the               The receiving module is a     through an intuitive interface.                                            Allows for automated           overtime, grace periods, and to
                                                                                                             Tracks acquisition costs,                                                                               users via a standard web
recording of supplier responses                                                                                                             reporting, e-mailing and faxing     identify exceptions requiring
                                                                          CAMP Integration              teardown expenses, overhaul                                                                                  browser. Out of the box,
from outgoing RFQs.                 cost-saving receiving, interme-                                                                         to customers, suppliers and         management attention. Vaca    -
                                                                          Allows Quantum Control        and repair expenses as well as                                                                               contains functional modules
                                                                                                                                            internal     users.     E-mail      tion & holiday time is also
                                                                      users to increase regulatory      miscellaneous charges. Single                                                                                for your customers to check
                                    gether with defect recording.                                                                                                               tracked and a payroll interface
     Sales Orders*                                                                                      screen visibility of lot related
                                                                      compliance by providing rea-l                                         created using pre-packaged          extract is included.                 status       and       shipping
     Manages the customer                Bar Coding                                                     activity including receiving,
                                                                      time access to maintenance                                            scripts or custom designed                                               information for Sales Orders
order process to include back            Prints bar codes and                                           sales, repairs and scrap                                                    QuickBooks
                                                                                                                                                                                                                     and Work Orders.
order management, invoice           allows for the scanning of                                          functions.                                                                  Accounting Bridge
                                                                      vice bulletins and airworthi-                                                                             Links Quantum to QuickBooks               Rental and Leasing
preparation    and    product       physical inventory to track and                                                                               Business Intelligence -
                                                                      ness directives through the                                             BUSINESS

                                                                                                                                                                                Pro. Sends QuickBooks the                 The Rental and Leasing
returns.                            manage stock and account for                                             Max-Q                                from Oracle
                                                                      web-based CAMP Maintenance                                                                                data required for G/L Account        module has the versatility to
                                    all parts when shipping,                                                 With Max-Q you get Avia -      Take advantage of the power of
                                                                      Management system.                                                                                        Balances, Financial State-           handle all of your rental and
     Sales Exchange*                receiving, etc.                                                     tion's leading Business Appli-      Oracles' Business Intelligence
     This powerful module pro  -         Repair Orders*                   Avtrak Integration            cation, Quantum Control, im  -      (BI) application. The Oracle BI     ments, and much more.                leasing transactions including
vides complete functionality             Manages the preparation,         Provides communication        plemented with the latest da -      foundation and toolset in-               EDI Integration
with unparalleled versatility to    pulling from inventory, ship-     between Quantum and the           tabase technology from Oracle       cludes an integrated array of            Through its Electronic               AVREF Catalog Files
handle your most complex e-    x    ping and receiving of compo   -   Avtrak GlobalNet maintenance      to provide the ultimate in da-      query, reporting, analysis,         Data     Interchange   (EDI)              The AVREF Catalog System
change processes. Supports          nents sent out for repair. The                                      tabase Security, Reliability,       alerting, analytics and desktop     module, Quantum users can            provides the latest OEM pricing
brokered exchanges, work            Repair Order module provides      the Quantum work order            Scalability and Performance.        integration. Quantum's inte     -   now conduct paperless tran-s         information along with access
order exchanges, routine ex    -    historic as well as current       module, drastically reducing                                          gration to this end-to-end en-      actions with their business          to Government MCRL cross re   -f
changes, repair order conve-   r    repair cost per component, de -   the possibility of data entry                                         terprise performance manag-e        partners. EDI transactions           erence data. Completely inte  -
sions to exchange and core          tailed by parts, labor and mis-                                                                         ment system unlocks the intel   -   range from quote to purchase         grated with the Quantum In-
tracking.                           cellaneous charges.               cy in the maintenance system.                                         ligence of your business.           to invoice, and more.                ventory Module.

*Standard Quantum Module                                                                                                                                                                                                           Ask About Our Referral Program
News in brief                                                                                                                                      24

the new Authorised Service Centre in the Mid-
dle East for scheduled and unscheduled mainte-      fiNANciAl NeWs iN brief
nance. ExecuJet Middle East holds EASA, GCAA
                                                    Aviation Capital Group closes $750,000,000 Senior Notes Offering
and further NAA AMO approvals for the Legacy
aircraft type.                                      Aviation Capital Group (ACG) closed the sale of $750 million of its 6.750% senior notes due
                                                    April 6, 2021. Proceeds from the offering will be used for general corporate purposes. In
Airbus VIP Interior certified by BaySys             2010, ACG issued $600 million of Rule 144A senior notes and $255 million of privately placed
                                                    unsecured notes. Including the sale of the notes announced today, ACG has raised a total of
BaySys International reported the final certifi-    approximately $3.64 billion in debt financing since the beginning of 2008.
cation and entry into service of Virginia’s first
A340 completion. The aircraft received both
                                                    ILFC enters into $1 .3 billion committed secured loan
FAA and GACA STC certification for the inte-
rior and upgrades which were accomplished at        International Lease Finance Corporation (ILFC) announced the commitment for $1.3 billion
the NASA Wallops Flight Facility located on the     of a secured term loan with a group of 15 banks from Europe, Asia and North America. The
eastern shore of Virignia. BaySys had as many       company also has the right to upsize the transaction by $200 million in commitments from
as 285 employees working the program during         additional lenders.
all evolutions. BaySys is currently completing a
Boeing B777 program at their facility.              AVIO reports revenue growth of 3% for 2010
                                                    AVIO reported consolidated revenues of €1,753 million, a growth of 3% at current exchange
BAE Systems wins              FOKKER        100     rates. Adjusted EBITDA rose to €339.1 million, increasing by 9.1% against the €EUR 310.6 mil-
remarketing mandate                                 lion in 2009, corresponding to 19.3% of revenues (18.3% in 2009). The order book reached
BAE Systems was selected by AviancaTaca –           €6 billion, with an increase of about 1% against 31 December 2009. Net debt decreased to
one of Latin America’s largest airline groupings    €1,480.8 million from €1,543.6 million at 31 December 2009.
- to exclusively remarket Fokker 100 jet airlin-
ers for sale. The Fokker 100s, built between        Willis Lease Finance reports 4th quarter net income of $4 .0 million
1992 and 1994, will be released on a planned
                                                    Willis Lease Finance Corporation reported improving utilization and strengthening demand
and gradual basis for remarketing from now
                                                    for leased engines boosted fourth quarter profits. Net income increased to $4.0 million in the
through to June 2012.
                                                    fourth quarter of 2010, compared to $3.1 million in the third quarter and $1.0 million in the
                                                    fourth quarter a year ago. The lease portfolio increased 2% year-over-year to $998.0 million,
SR Technics services 15th easyJet A319              with 16 engines purchased and 7 engines and one airframe sold during 2010.
aircraft in Malta
SR Technics welcomed the 15th easyJet air-          Lufthansa Technik increases 2010 revenues, but reports lower result
craft to its new two-bay facility in Malta. Af-     Lufthansa Technik Group reported a 1.4% increase in revenues in 2010, but as expected, the
ter a 14-day standard IL-maintenance check,         company’s EBT declined by 4.2% to €282 million. Revenue from other companies in the Lufthan-
the aircraft was be re-delivered at the end of      sa Group declined by 1.3% attributed to lower numbers in ground maintenance events and
March. Since October 2010, the company has          prices that were reduced for competitive reasons, but revenue from business with customers
built up its operation in Malta as a center of      outside the Group grew by 3.3% to €2.4 billion, and as a result, its share in total revenue climbed
excellence for narrowbody aircraft base main-       slightly to 59%. The operating margin was 7.0% in 2010.
tenance in Europe. easyJet is SR Technics’
base load customer in Malta with a long-term
                                                    Israel Aerospace Industries’ financial figures for 2010
maintenance contract. As part of the agree-
ment, SR Technics has been performing three         Israel Aerospace Industries reported that sales for the fourth quarter of 2010 reached $849 mil-
IL-maintenance checks per month on easyJet’s        lion, up 12% over the same period in 2009. Export sales rose 15% to $671 million. Sales to the
Airbus A319 aircraft.                               defense market in the fourth quarter of 2010 reached approximately $628 million, an increase of
                                                    10%, while sales to the commercial market rose 18% to $221 million. Net profit for the fourth
Iberia converts passenger aircraft into             quarter totaled $14 million, up 68% from 2009‘s $8 million.
mid-air refuelling tanker
                                                    BOC Aviation achieves record net profit for the fifth consecutive year
Iberia converted an Airbus A330-200 passen-
ger airliner into a Multi Role Tanker Transport     BOC Aviation’s net profit after tax for the financial year ended 31 December 2010 reached S$168
(MRTT), equipped for mid-air refuelling. It was     million, 22% higher than the previous record of $137 million achieved a year ago. Total assets
the first time such a complex task has been         as at 31 December 2010 were $6.6 billion, up by 14% compared to the prior year while share-
performed in Spain, where Iberia maintenance        holders’ equity rose 39% to $1.3 billion. During 2010, BOC Aviation took delivery of 32 aircraft
and engineering teams completed it in a record      which when combined with an effective funding strategy and strong financial discipline, resulted
16 months. After the final flight test on March     in higher operating profit.
15th, the aircraft belonging to the Saudi Ara-
bian air force, was delivered by Iberia to Air-     AeroCentury reports fourth quarter 2010 net loss of $1 million
bus Military. Iberia’s engineers and technicians
                                                    AeroCentury posted fourth quarter total revenues, to December 31, 2010, of $5.9 million com-
spent 140,000 man-hours on the conversion of
                                                    pared with total revenues of $8.6 million for the same period a year ago. For full-year 2010, the
the A330, during which they modified 5,500
                                                    company reported total revenues of $30.7 million compared with revenues of $33.6 million for
system components, making structural changes
                                                    2009. The company reported a net loss of $1.0 million for the fourth quarter of 2010, compared
to 2,000 parts. An additional 58.5 km. of wir-
                                                    to net income of $1.9 million for the fourth quarter of 2009 and net income of $1.6 million for
ing was installed, including 1,000 metres each
                                                    full year 2010, compared to net income of $5.7 million for 2009.
of coaxial cable and fibre optic cable.

                                                                                                                         AviTrader MRO - April 2011
industry people on the move                                                                                                                       25

CIRCOR Aerospace named Dave Elston to             pore office and will report to Harry Forsythe,     and quality assurance, Bianchi will oversee
the business development team as Aftermar-        executive vice president, marketing. Mr. Lam       the growing airline’s technical operations.
ket and MRO Business Development director.        will have responsibility for deal origination in
Dave’s role will focus on the growth of the       Australia, New Zealand, SW Pacific, China,         Constant Aviation, an MRO facility headquar-
CIRCOR Aerospace landing gear MRO market          Mongolia, Hongkong, Macau, Taiwan, South           tered at Cleveland Hopkins International Air-
segment, after the recent acquisition of its      Korea and Japan.                                   port, promoted Derek Morris to avionics modi-
Sylmar, CA landing gear business.                                                                    fications manager. Derek will be responsible for
                                                  Aircell announced the appointment of Shau-         overseeing all avionics modification projects.
Guangzhou Aircraft Maintenance & Engi-            na R . Haras as sales director. Haras will be
neering Company (GAMECO) reported that            responsible for expanding and increasing Air-      Boeing named Marc Allen president of Boe-
Norbert Marx has been named as the new            cell’s advertising and sponsorship revenues in     ing China. Allen will be based in Beijing and
General Manager of GAMECO. Marx has more          partnership with Fortune 500 companies.            report to Shep Hill, president, Boeing Inter-
than twenty years leadership experience in the                                                       national and senior vice president Business
global aviation markets with extensive exper-     TIMCO Aviation Services reported a transi-         Development and Strategy. In his new role,
tise in maintenance, repair and overhaul. Marx    tion in leadership effective 1 April. Kevin        Allen will be responsible for Boeing’s growth
most recently was vice president, Airframe        Carter assumed full responsibilities as chief      and productivity plans and initiatives in Chi-
and Vice President Boundary Bay at Heli-One       executive officer, in a capacity he has shared     na. He succeeds David Wang, 67, who is re-
Inc./CHC, in Vancouver, Canada. In addition       with Ron Utecht over the past two and a            tiring after almost a decade of service in one
Wu RongXin was named as the new deputy            half years. Utecht will transition from his for-   of the company’s key global markets.
general manager of GAMECO. Wu joined the          mal leadership role into a senior advisory role
                                                                                                     PremiAir appointed Mike Preston as director
GAMECO staff in 2008 serving as the chief fi-     with the company. In addition, Bill Norman
                                                                                                     of Engineering & Maintenance. The appoint-
nancial officer for the last three years.         joined TIMCO as the company’s new presi-
                                                                                                     ment is effective immediately, with Preston
                                                  dent of MRO Services, leading the company’s
                                                                                                     taking responsibility for fixed-wing and rotary
International Lease Finance Corporation re-       airframe and engine MRO operations as well
                                                                                                     maintenance at the Group’s Oxford, Biggin Hill
ported the promotions of Fred Cromer to           as its TIMCO LineCare business. Rick Salani-
                                                                                                     and Blackbushe facilities.
president and Philip Scruggs to executive         tri will continue to lead TIMCO Aerosys-
vice president. The company also announced        tems as its president and Elizabeth Taylor         CIRCOR Aerospace Products Group appoint-
that Alan Lund, who has served as vice chair-     will continue to manage TIMCO human re-            ed Pritesh Patel as the director of informa-
man and president, has retired as president       sources and legal functions as executive vice      tion technology. Patel will report to CIRCOR
but will remain as vice chairman and member       president and general counsel. Lee Fox will        Aerospace Group vice president Christopher
of the company’s board of directors.              continue in his role as treasurer, and will also   Celtruda.
                                                  be assuming new responsibilities as TIMCO’s
Francesco Caio will become Avio’s chief ex-       chief financial officer.                           Nexcelle, a joint venture of GE’s Middle River
ecutive officer with effect from 2 May 2011. In                                                      Aircraft Systems (MRAS) and Aircelle of the
his new role as chief executive, Caio will take   BOC Aviation reported that Steven Townend,         Safran group, confirmed the appointment
over from Alan Bowkett, chairman of Avio          deputy managing director and chief commer-         of Jan Beseler and Jean-Christophe Dalla
Group, who has been leading the company           cial officer, was elected to the board of direc-   Toffola as the company’s two executive vice
since the sudden death of the company’s CEO       tors of the International Society of Transport     presidents - incorporating two highly experi-
Orazio Ragni, in October 2010. Bowkett will       Aircraft Trading (ISTAT) for a four-year term.     enced managers from its parent companies in
remain as the group’s non-executive chairman.                                                        the organizational lineup. Beseler is from GE
The Board of Directors of Avio appointed Caio     Virgin America appointed Mark Bianchi as           Aviation, and brings extensive expertise in jet
to the Board of the company.                      the airline’s senior vice president of Technical   engine nacelle integration and engineering.
                                                  Operations. An industry veteran with more          Dalla Toffola comes from the Safran group’s
Macquarie AirFinance appointed Vincent            than 27 years of hands on experience in air        Aircelle business unit, where his responsibilities
Lam as vice president of marketing, Asia Pa-      carrier operations, line and base maintenance,     included nacelles, international partnerships
cific. He will be based in the company’s Singa-   fleet management, regulatory compliance            and the supply chain.

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