AVB: Could you start by sharing some details on your company and its operational presence?
Ben-Kraiem: MTU Maintenance is the global market leader in providing customised service solutions for aero engines. As engine experts, we provide maximum reliability for operators and owners — always generating the best engine value for them. Our wide range of service solutions encompasses all aspects of engine MRO, asset management and leasing. With over 30 engines in our portfolio, MTU Maintenance has performed more than 18,000 shop visits in 36+ years.
MTU Maintenance operates a worldwide network of facilities in Europe, Asia and North America. Most engines from our Middle East customers are served at our in Hannover and Berlin, Germany, as well as in Zhuhai, China. The latter is a 50/50 joint venture between Germany’s leading engine manufacturer MTU Aero Engines and China Southern Air Holding Company. The company is one of the top maintenance players in Asia and serves many overseas customers.
AVB: What are some of your key projects in the Middle East?
Ben-Kraiem: The Middle East region is key to us as some of our largest customers are based here and it is a fast-growing region in terms of engine services. We are currently serving about 20 customers in the Middle East including Egypt. Among our top customers are: Saudia Airlines, Royal Jordanian, EgyptAir, and Nesma Airlines. We also serve several business jet operators, as well as lessors such as ALAFCO.
Today, we have technical and sales representatives based in the UAE and Saudi Arabia. We are planning to further expand our local presence in the near future. Additionally, we have a dedicated sales team for the region based at our facility in Hannover, Germany.
AVB: Could you share some insights on your business strategy for 2018?
Ben-Kraiem: MTU Maintenance is a significant MRO market player with a 10% share of the engine MRO market. We look to grow faster than the market and have strategies in place to ensure this growth. Over the next 10 years, we expect most growth on the following programs (based on our customer contracts and strategic focus): PW1000G family and GE90 Growth, especially as these engines age and migrate from first to second-tier operators.
In absolute numbers, our focus will also be on the V2500, CFM56-5B/-7 and the CF34-8/-10 engine families. We are also concentrating on expanding our regional sales networks and on-site support services to increase our proximity to customers, also in the Middle East.
Another key focus in the long-term will be the development of monitoring systems such as our Engine Trend Monitoring (ETM). Big Data will take MRO management and condition analytics into the predictive sphere, meaning that not only can negative trends be caught early and rectified — as is the case today — but MRO providers will be able to analyse larger patterns, better predict performance in the field and, as a result, better plan shop visits, parts logistics and manage fleets.
All of these factors will result in parts savings and shorter turn times. We are currently optimising our ETM program with these key goals in mind. Furthermore, as an independent service provider, MTU’s ETM system is not based on a single engine system. This means that we can, for instance, monitor a customer’s GE90 and V2500 fleet with the same tool, which is particularly helpful for engineers and technical managers and unusual in the industry.
AVB: In terms of engine maintenance, what are some of the ways MTU has improved its capabilities in the last year?
Ben-Kraiem: One thing we are noticing at MTU Maintenance, is that we are increasingly needing to be “product neutral” in our processes – this comes from our broad portfolio of over 30 engine types, as well as our three-pronged market approach. We serve customers independently, through airline partnerships and also as part of the OEM network. This means that we need to be able to handle diverse work scopes and customer needs. Product neutrality among staff is something we have been actively working on.
Additionally, it is worth mentioning that MTU Maintenance’s industrial engineering department concentrates on improving our repairs, processes and technologies. In the past, our engineering specialists have developed proprietary high-tech repair capabilities for operators flying in harsh operating environments, such as the Middle East. Our solutions include CMAS Resistant Thermal Barrier Coating and our ER-COateco (erosion-resistant coating for HPC airfoils), which reduces scrap rates, improves the SFC of engines and saves on costs. Such repairs are a very cost-effective way to help operators combat high material costs and considerably in-crease engine on-wing times
The industrial engineering team is currently exploring many technological advancements and potential future applications – for instance, automation for grinding processes. This team is eagerly researching additive manufacturing technology (3-D printing), for instance in blade tip restoration. On a broader company level, MTU Aero Engines already uses additive manufacturing to produce boroscope bosses for the PW1100G-JM that powers the A320neo. Another example is a new seal carrier that was designed for a demonstrator engine based on Pratt & Whitney’s PW1500G. All of these have the potential to increase efficiency and therefore, reduce costs.
AVB: In what ways are you expanding your OEM network?
Ben-Kraiem: Generally speaking, there will be increased OEM coverage for next-generation engines and independent providers will need to intensify their cooperation with OEMs in order to access to both engine MRO and potentially IP protected repair licenses, as well as MRO volume. MTU Maintenance has adapted its strategy to this market situation. We have:
• A broad portfolio as a basis for growth. We have the largest engine maintenance portfolio worldwide with over 30 engines including the popular engines CF34, CFM56, V2500, GE90 and PW1100G-JM. Furthermore, we serve over 150 airline customers today and are always looking to grow this number.
• Highly-customised and integrated solutions across the engine lifecycle. In particular within our independent segment, in which we are the global market leader in providing customised service solutions for engine operators and owners.
• Cooperation with OEMs: Through MTU Aero Engine’s risk and revenue share partnerships with OEMs, we are part of OEM aftermarket networks for the PW1100G-JM, GEnx and GP7200, and the GE9X in future. We also serve the V2500 – both as an OEM network partner and as an independent provider. In the small gas turbine segment, we look back on 25 years of successful co-operation with Pratt & Whitney Canada, as part of P&WC Customer Centre Europe joint venture.
• Cooperations with airlines We work strategically with two airline groups. We have a joint venture with China Southern, MTU Maintenance Zhuhai. MTU has also had a joint venture with Lufthansa Technik, Airfoil Services Sdn. (ASSB) for over 15 years.
Here, we provide best-cost airfoil repairs for over 80 customers worldwide. Furthermore, the two companies set up a joint venture, EME Aero, for the MRO of geared turbofan (GTF) engines.
AVB: What are the challenges currently faced in engine maintenance?
Ben-Kraiem: We would not particularly speak of challenges in the industry, rather of opportunities and developments that have presented themselves. For instance: Engine ownership is increasingly moving from the operator to the investor community.
According to an analysis of Boeing published in 2015, the percentage of the global commercial fleet under operating lease has grown from just under 15% in 1990 to about 25% by 2000, and up to roughly 40% today.
Further, it is estimated that close to 50% of all aircraft could be financed via leasing companies in the future. This trend can also be seen in the Middle East: the share of fleets under operating lease has grown from 28% in 2007 to a 38% share in 2017.
As a world leader in customised engine services, we offer integrated solutions encompassing all aspects of engine MRO, asset management and leasing.
Our customers are showing an increasing interest in our portfolio of lease services, which we tailor to the specific requirements of this region – affording them the highest level of comfort and transparency so they can enjoy all the benefits of lower cost, mitigated risk and additional income.
Examples of such services are the sale and lease-back of high-value engines such as the GEnx and the GE90 (such transactions are performed via our joint venture company Sumisho Aero Engine Lease B.V.). Our regional presence and sales expansion will also include leasing specialists.