Farnborough Air Show

SR Technics shoulderscarriers’ MRO concerns

 - November 27, 2006, 5:18 AM

Saudi Arabia’s new low-cost carrier Sama last month became the latest operator to sign up for one of the integrated airline solutions (IAS) contracts offered by SR Technics (Hall 4 Stand B8). The five-year, $121 million deal will see the maintenance, repair and overhaul group provide full technical support for Sama’s fleet of Boeing 737-300s, including engineering and technical services, component support and logistics management.

According to Mike Humphreys, SR Technics executive vice president for integrated component solutions (ICS), airlines are increasingly asking the company to shoulder full responsibility for all aspects of fleet support–right down to managing every item of spares inventory and ensuring that it is shipped where it is needed when it is needed. In his view, the fact that SR Technics is not owned by a major airline gives its clients peace of mind.

“We provide a tailored solution for each airline,” Humphreys explained, suggesting that airline-owned MRO providers tend to serve up support packages based only on what they already do for their own fleets. “Unlike other MROs, we don’t want aircraft on the ground [waiting to be repaired], we want them flying and logging hours for which we get paid [under the flight-hour terms of the IAS agreements].”

Through a 2005 finance deal with General Electric Commercial Aviation Services, SR Technics has been able to make a significant increase in the rotable parts inventory it manages from its dedicated ICS warehouse near London Heathrow Airport. Operators can turn to SR Technics for the components solutions package, or it can form part of much more comprehensive IAS and integrated engine solutions plans.

The IAS contracts can cover all frontline maintenance, A through C checks, as well as fleet and warranty management. The SR Technics managers running the IAS programs can tap the group’s worldwide resources to provide the various services, but are also free to use any other MRO provider if this provides a more cost-effective, local solution for the customer.

In addition to the new London logistics center, SR Technics also keeps parts supplies at its facilities at the UK’s Luton Airport (mainly for its EasyTech partnership with EasyJet), Dublin, Zurich and Hong Kong (mainly for Dragon Air). Some 50 carriers are now covered by ICS contracts for spares, mostly under five- to 10-year contracts. The centers are linked and managed by an SAP information technology network.

According to Humphreys, ICS allows carriers to get component management issues off their own balance sheets and, as such, is as attractive to established major carriers, such as British Airways, as it is to new low-cost market entrants. It also reduces operators’ exposure to currency fluctuations and gives them greater flexibility if they decide to introduce new aircraft types for which they do not hold spares.

With each ICS customer, SR Technics agrees to a specific level of critical AOG parts to position with the operator so they are ready to be fitted to the aircraft immediately when needed. The London center guarantees an AOG response time of just one hour–from the point when the requirement is logged to the time when the part leaves the warehouse. The operation uses security-screened shippers who are not required to have the contents of their trucks x-rayed at Heathrow Airport.

Parts On Demand

Non-AOG parts needs are met from the main logistics center, with unserviceable parts being sent for repair wherever it can be done in the most cost-effective way before being returned to the main store for redistribution. By pooling parts among carriers operating the same aircraft types, SR Technics has been able to leverage better prices in the spares market.

Australia’s Qantas has already signed a memorandum of understanding for an ICS package to cover its Airbus A380 fleet. Humphreys said the program is particularly suitable for A380 operators because the number of aircraft they have will tend to be too small to merit holding their own spares stock. SR Technics will also be offering ICS terms to operators of the new Boeing 787.

The 47,000-sq-ft London logistics center is already handling about 10,000 transactions each week and houses around 132,000 parts, including consumables–all purchased from pre-audited vendors. SR Technics claims to have a rigorous process for screening out counterfeit parts and will quarantine any items about which it is suspicious. Humphreys said it does not currently buy PMA parts because its airline clients are not yet ready to accept them.

The company is exploring ways to get more established in the North American market, but is having to contend with restrictive trade union practices as well as issues such as the greater prevalence there of PMA-rotables and the need to have parts released by both U.S. and European aviation authorities. However, since the Asia-Pacific airline market is continuing to show much greater growth, the MRO group is concentrating more of its efforts there in order to be ready to support the region’s fast-growing fleets.

By the end of this year, SR Technics intends to run trials of new radio frequency identification technology, with a link between the London center, its regional facilities and customers’ own stores. This should allow it to more accurately track parts availability in real time, manage restocking electronically, report errors immediately and minimize component losses.