OAMag-V7N4-Cover [Converted] - Orient Aviation

EngineeringandS p e c i a l R e p o r tGOODBy Tom Ballantyne,in MelbourneMILEAGEDistance is no object as new Ansett/Air NZ venturepitches its MRO expertise worldwideThe formula sounds simple. Take twomedium-sized aircraft maintenance divisions,merge their operations and endup with a significant player in Asia’s regionalmaintenance, repair and overhaul (MRO)market. So big, in fact, it could even grab agrowing share of business from Europe andthe Americas.For Ansett Australia and its half owner,Air New Zealand (AirNZ), doing just that hasalready involved two years of meticulousplanning, a handful of unique challenges andthe prospect of several more years of effortbefore the parts become a genuine whole.Not that the new Ansett Australia and AirNew Zealand Engineering Services (ANNZES)will be waiting until then to convince customersto take advantage of its MRO offerings.According to John Vincent, the company’schief operating officer, one of the first tasks ofa newly appointed trans-Tasman managerialteam – under American-born chief executiveofficer Bill Jacobson – has been putting togethera commercial department, including asales and marketing team.While the two separate airline engineeringdivisions shared a stand at Asian Aerospace inSingapore two years ago, at the same eventin February they will debut as a single entityunder the ANNZES banner.As the phased merger of the two divisionscontinues, the aim is to drive expansion bychasing new third-party customers with thepromise of quality work, competitive pricingand speedy turn-around times.By putting the two businesses together,Ansett and Air NZ already have introduceda significant market player. The combinedturnover of Ansett Australia Engineeringand Air New Zealand Engineering Services isaround US$490 million. The plan is to lift thatfigure to around US$650 million within fiveyears, with 40%, or nearly US$200 millionannually, coming from third-party contracts.Yet while ANNZES has officially beenestablished on both sides of the Tasman Sea,its only employees will be the combined managementteam of executives co-ordinating thefirm’s various MRO centres.Maintenance and engineering staff willremain on the payroll of the two airlinesand assets such as hangars, spare parts andspecialised tooling equipment will belong tothe carriers.That is because of the unique issues involvedin a merger of companies in differentcountries, not to mention union concerns andregulatory issues.“No one has done this before that we areaware of,” explained Mr Vincent. “A numberof airlines have separated their engineeringbusiness, but we are not aware of anyone whohas done it and then combined two businessesin two sovereign states.“We are being very careful and workingthrough the issues cautiously with the unionsand with organisations like Australia’s CivilAviation Safety Authority (CASA) and CivilAviation New Zealand to ensure we meet thebusiness regulatory requirements.”No one involved doubts the move makessense. “This is not a downsizing exercise,” saidMr Vincent. “The whole thrust of ANNZESis that we want to create a maintenancerepair and overhaul business that is worldclass competitive, that will take on increasedthird-party work and will actually expand. Thewhole thrust of it is job expansionary.”February 2000 | Orient Aviation | 63