MTU Maintenance emerged from what might have proved a disastrous 2020 with only a “black eye,” as the company saw just an 18 percent decline in business last year compared with the 45 percent most forecasters expected, the Munich-based company reported Thursday. The company attributed its relative success to what it called a “multi-pronged aftermarket strategy” of OEM network participation, joint ventures with airlines such as China Southern, and a broad portfolio across multiple business segments. It also credited its broad portfolio of 30 engine types, including the newly added CFM Leap and several other engines in the narrowbody segment, which industry authorities expect to recover much faster than the widebody market. MTU’s customer base also includes cargo operators, which largely weathered the Covid crisis unscathed.
“In fact, we even saw campaign wins of $5.5 billion, the second-highest in MTU Maintenance history,” said MTU Aero Engines chief program officer Michael Schreyögg. “This is proof that customers trust in us, our financial strength, and intelligent solutions in critical times. Our engine expertise and ability to get the most out of an engine at minimum cost is highly valuable to both airlines and lessors both now and in time when our industry recovers.”
Campaign wins included more than 300 new engine MRO contracts and 56 customers sending new engine types to MTU’s facilities. The CFM56 engine family accounted for a third of those customers, reported MTU Aero Engines v-p of MRO programs Martin Friis-Petersen. “In turn, we are confident in this program and are even adding a CFM56-7B line to our facility in Berlin to ensure fast response and high flexibility for our customers,” he said.
MTU’s organic growth strategy for its maintenance arm will require continued investments in the EME Aero joint venture with Lufthansa Technik in Poland and expansion at its sites in Berlin-Brandenburg and Hannover in Germany. It also plans to move to a new facility in Vancouver, Canada; build a second facility at MTU Maintenance Zhuhai, China; and open a new greenfield repair facility called MTU Maintenance Serbia.
“Due to the crisis, we’ve been noticing a trend towards smaller and customized workscopes and on-site fixes,” explained Friis-Petersen. “Our on-site service team saw 25 percent more events than we had been anticipating for 2020. This reflects not only the cost focus of operators but also the trend toward on-wing repairs for newer engines.”
MTU Maintenance’s repair service team gained 26 new customers for specific repair services in 2020 and increased the number of engine teardowns by over 50 percent compared with the previous year. Such teardowns allow access to used serviceable material, which will continue to reduce the cost of shop visits for customers in coming years, said the company.