www.engineering-ru.com ready to serve the world russian mro market reality speaker: vladimir...
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www.engineering-ru.com Ready to serve the world
Russian MRO market reality
Speaker:
Vladimir Perekrestov
CEO
Aircraft Maintenance Russia and CIS
8th international conference
Moscow, Russia, 20-21 February 2013
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Content
• Development of Western-built aircraft MRO market in Russia
• Russia&CIS MRO market
• Advanced market segments
• Competition in market of core products and services
• Characteristics of Russian MRO market
• Conclusion
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Development of Western-built aircraft MRO market
1992 – Airbus A 310 was the first western-built aircraft to be operated in Russia
1996 – First time when Russian company gained EASA Part 145 approval
2004 – First С-Check maintenance on Airbus A 320 Family was implemented in Russia
2005 – 2006 –Soviet-built to Western-built large-scale fleet replacement in Russia
2005 – 2008 – High demand for engineering and technical personnel to perform maintenance on aircraft and parts
2006 – Establishing the first EASA Part-147 approved training center to provide engineering and technical personnel training services
2011 – Cancellation of customs duties on western-built aircraft spare parts
2011 – First D-Check maintenance implemented on Airbus A 320 Family in Russia
2012 – First Redelivery Check performed on Boeing 737 CL in Russia
2012 – Establishing the consignment stock of commercial western-built aircraft spare parts in Russia
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Number of western aircraft in Russia/Other CIS fleets
CIS Russian Federation
*Source AeroTransport Data Bank, October 2012
Wide-body aircraft Narrow-body aircraft Regional aircraft Total
RF 89 387 78 554
CIS 25 156 57 238
Total 114 543 135 792
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MRO market Russia and CIS, USD M*
* 2012, estimate made by Engineering Holding
Wide body A/C
Regional A/C
Narrow body A/C
Base Line Modifications Components Engine Total
Market volume Russia and CIS, USD M 232 357 161 393 644 1 787
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The World’s MRO providers:
MRO providers in Russia and CIS market: competition
MRO providers in Russia and CIS:
Analysts are forecasting competition increase among organizations which provide MRO services on the territory of Russia
Vostok Technical Service
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MRO market in Russia and CIS, capability
High
Low HighUp-front capital investments required
Labor share of total cost
Cabin interiors
Evacuation Equipment
Wheels & brakes
Fire protection & Oxygen
Batteries
Landing Gear
Thrust Reverser
APU
Hydraulics Electric Power
Fuel Cabin Systems
Air system
Avionics
Current market Potential market
?
Source: ICF SH&E Analysis
Line
Base Maintenance
Engineering
Engine
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Breakdown of Total Airline Costs – From World Experience
Typical Airline Cost Breakdown Typical Airline’s MRO Cost Breakdown
Annual airline maintenance spend as a % of total cost will fluctuate year-to-year based on timing of major visits (e.g. D-checks & engine overhauls), fleet age, size, mix and the price of fuel
Maintenance costs typically range between 7%-14% of an airline’s operating budget
Source: Form 41 & ICF SH&E Analysis
Maintenance9%
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Characteristics of Russian MRO market: Planning & IT
Airlines’ insufficient maintenance planning horizon and insufficient IT support:•Failure to plan preparation for maintenance checks (aircraft spare parts and labour resources)
•Increasing maintenance TAT
• Maintenance costs increase
Only 5 customers of Engineering Holding develop and provide long-term (1-2 years) maintenance plans
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Characteristics of Russian MRO market: spare parts stocks & supply chain management
Absence of market players who own large aircraft spare parts stocks on the territory of Russian Federation and insufficient supply chain management:
•Minimum spare parts stocks for the most demanded aircraft types
•Poorly developed aircraft parts-out business
A J Walter Aviation&
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Characteristics of Russian MRO market: additional services
Insufficient Airlines’ attention to the technical aspects such as:
•Aircraft interior and cabin equipment repair
•AC delivery/redelivery
•AC documentation and records keeping
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Characteristics of Russian MRO market: changing aircraft fleet structure
Airlines fleet renewal:
•Russian operators reduce their Boeing 737 CL fleet
•Reducing average age of aircraft
•Reducing maintenance checks man-hours
•Demand for modern aircraft maintenance
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Conclusion: Opportunities to reduce airlines’ maintenance expenditures
• Improvement of maintenance planning horizon
• Implementation of proper IT solutions
• Increase of aircraft maintenance outsourcing share in segments where in-house maintenance is not cost effective
• Growth of aircraft spare parts stocks in Russia
• Improvement of supply chain management efficiency
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Thank you for your attention!