Duncan Sees Dip in Discretionary Spending but Steady Mx

 - April 7, 2020, 5:22 PM

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

While Duncan Aviation has seen some business drop-off during the Covid-19 pandemic, it is seeing many operators use this time to catch up on maintenance, Jeff Lake, COO of the MRO provider, said during an AIN webinar today. “Our shops are still pretty full in many areas,” he said, adding business has been better than the company initially thought it would be during the crisis. “We’ve been pleasantly surprised with the amount of work we have right now.”

The key down areas of business, he added, involves discretionary spending, such as avionics or interior updates and paint. “We have some shops on reduced hours,” he added, and the company has implemented flexible scheduling. But Lake said one of the lessons learned from the so-called “Great Recession” a decade ago was the need to cross-train employees. This has enabled Duncan to shift some employees to areas where business has dipped to busier areas.

Its Rapid Response teams and satellite operations are particularly busy, Lake noted. Many operators cannot or do not want to reposition aircraft during the pandemic and have requested aircraft work be conducted at their location. Another busy area, he added, has been sales and acquisition activity.

But Duncan, too, has had to tighten up in preparation given the uncertainties of the crises. Its 2020 plans “have been thrown out the window,” with a refocus on three short-term goals: keeping customers, employees, and their families safe; providing high-quality service with the recognition that turn-times remain important for the customers; and maintaining schedules to the extent possible to keep employees working.

Capital spending has been slowed but some investments are being made, he said, citing an aircraft disinfectant system Duncan added to its main locations and satellites. Lake also said with low-interest rates, the opportunity exists for improved cash flow. In the end, he said, “We want to make short-term decisions that make sense and, at the same time, keep an eye on the long-term.”