The good, the bad and the ugly: the shape of things to ... - AviTrader

AviTrader
MRO
December 2011 - www.avitrader.com
WHAT LIES AHEAD
IN 2012
• The MRO Outlook for 2012
• The Case for South America
• The Looming Aftermarket Battle
LATEST FROM SABENA TECHNICS • LESSOR FINANCIALS
ANALYSIS LYSIS L - 2011 DU DUBAI
AIRSHOW ORDERS • INDUSTRY NEWS

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Editor‘s Page 3
The good, the bad and the ugly: the shape of things to come in 2012
WE ARE DELIGHTED TO BRING yOU our
December issue of AviTrader MRO, our final
for the year - and what a year it has been,
from the record orders for aircraft, engines
and services coming out of Le Bourget and
Dubai to the dire forecasts for recession and
billion-dollar losses in the industry offered earlier
this month by IATA.
It’s not the first time that the aviation industry
will have been faced with crippling financial
circumstances, and it’s a given that the MRO
sector will weather the storm, almost certainly
stronger for the experience and probably minus
a few members as the laws of survival lead
to continued consolidation and cutbacks.
As you’ll see in these pages, a number of industry
professionals took the time to share with us
their hopes and fears for the year ahead. Without
exception, they believe it won’t be an easy
12 months, but it’s clear that the impact of the
Contents
coming downturn will depend very much on
where you live and work.
One case in particular caught our attention
this month: TAP Maintenance & Engineering,
part of Portugal’s state-owned TAP group that
is earmarked for privatization by the Portuguese
government by next June as part of the
country’s austerity drive. With one foot firmly
planted in the burgeoning Brazilian MRO market
and the other in struggling Europe, the
company is courting bids from both sides of
the Atlantic in a process that could well characterize
market dynamics in the year ahead.
Long-established operators from the old continent
looking at unrivalled routes to Brazil -
or ambitious ‘new world’ suitors keen to take
on South America’s biggest MRO and build
it from there? This time next year, we’ll look
back and say that we saw it coming!
Again, we thank the IBA for their invaluable
The future of TAP M&E’s facilities in Rio de Janeiro will be decided by June 2012 TAP M&E Brazil
Industry News - Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company News - Sabena technics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Technology News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Cover Story: The MRO Outlook for 2012 . . . . . . . . . . . . . . . . . . . . . . . . 8-15
Cover Story: The MRO Outlook - IBA Perspective . . . . . . . . . . . . . . . . . 8-11
Cover Story: The MRO Outlook - The Case for South America . . . . . . . . . 12
The Aftermarket Heats Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-14
Lessor Finance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IBA Analysis: The Dubai Airshow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
News in Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19-23
Industry People on the Move . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
contributions over the year, and this month
in particular, with commercial manager Ben
Jacques’ insight into what lies ahead in 2012 as
well as his analysis of the astonishing volume of
orders from last month’s Dubai Airshow.
We look forward to another 12 months of
bringing you the latest industry news and exclusive
market insight, not just in the pages of
AviTrader MRO but also our AviTrader Weekly
News Headlines and our Daily News Alert.
Looking ahead to the New Year, we’ll be bringing
you our ‘Engine Issue’ in January, with a focus
on spare engine availability and spare engine
parts, while February will take us to Asia to see
how companies both in the region and beyond
are preparing to get a piece of this fast-growing
MRO market. March will see our main story devoted
to the repair and logistics of wheels and
brakes. As usual, we welcome your input - send
your comments to us at editor@avitrader.com.
AviTrader
MRO
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Catherine Davies, Editor
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Opinion
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AviTrader MRO - December 2011

Industry News - Events 4
Middle East ‘vibrancy’ on display at Dubai Airshow as records fall
Last month’s Dubai Airshow provided a glimmer of light in an increasingly troubled global financial landscape, as the order book topped $63bn - more than four times larger
than the previous event in 2009, which posted $14bn in orders. Airbus continued its relentless march forward with the new fuel-efficient A320neo, notching up close to
200 orders and MOUs for the model, while Boeing stole the show on the long-haul side with a massive new order for 50 777-ER aircraft from Emirates. The deal, valued at
$18bn at list prices, was the largest in Boeing’s 95-year history, in dollar value - until two days later, when the Chicago-based airframer announced a $21.7bn agreement
for 201 of its own single-aisle fuel-efficient offering, the 737 Max, and a further 29 NG 737-900ERs, with Indonesia’s Lion Air.
The 2011 Dubai Airshow was the last to be held at the Airport Expo, as the next show, in 2013, will take place in Dubai World Central, a purpose-built ‘aerotropolis‘ that is
an integral component of the Dubai Government‘s strategy to establish the emirate as an international aviation hub and a gateway to global markets.
The Dubai Airshow 2011 in figures
Total trade visitors 56,548 (+7%)
Total exhibitors 960 (+8%)
Total countries 122
Total square meters 325,513
Total chalets 103
Total order book $63.3bn
Source: F&E Aerospace
Lufthansa Technik signs various cooperation agreements at Dubai Airshow
• LHT and Emirates signed a non-exclusive agreement
for a period of five years related to the maintenance
of components installed on the Airbus A330/A340
and Boeing 777 fleets operated by Emirates.
• Maximus Air extended its existing contract for
component supply with Lufthansa Technik by five
years, and new aircraft have been added. In addition,
Lufthansa Technik will carry out line maintenance in
Europe for Maximus Air’s Airbus A300-600 freighters.
Maximus Air has had a Total Component Support TCS
contract for four years for the carrier’s current two
A300-600 freighters. This agreement has now been
expanded to include three more freighters being
added to the fleet, and simultaneously extended to
cover all five aircraft through 2016. At the same time,
Maximus Air has commissioned Lufthansa Technik
with line maintenance and A- and C-checks in Leipzig
and Brussels.
• Lufthansa Technik and NAS-Holding of Saudi Arabia
are expanding their cooperation. Lufthansa Technik
already provides component and engine services
for NAS fleet and support for the new technical
subsidiary NAS-Tech. Now the two partners will join
Emirates ordered a further 50 777ER aircraft from Boeing at the 2011 Dubai Airshow Boeing
forces in offering technical services for customers
in Saudi Arabia, who will be addressed and served
through a joint sales organization representing
both partners. The MRO services of NAS-Tech and
Lufthansa Technik complement each other perfectly,
whether for VIP and special mission aircraft or for
maintenance and overhaul services for commercial
airlines in Saudi Arabia.
• Lufthansa Technik signed a second completion
contract for a Boeing 747-8. An appropriate
signing with an undisclosed customer took place
at the Dubai Airshow 2011. The completion will
start in 2012.
• Lufthansa Technik established a new company
headquartered in Dubai – Lufthansa Technik Middle
East Services (LTMES), which will bundle all the Middle
East sales and service activities currently pursued by
a variety of members of the international Lufthansa
Technik Group and establish a repair operation for
nacelle components such as fan reversers, inlet cowls
and fan cowls. Lufthansa Technik Middle East Services
will look after customers in the Middle East for all
Lufthansa Technik Group companies.
flydubai signs $20m maintenance support
contract with Honeywell
flydubai signed a maintenance cost agreement
with Honeywell, worth more than $20m, to provide
maintenance support for the carrier’s auxiliary power
units (APUs) installed on its fleet of Boeing 737-800NG
passenger aircraft. The 10-year contract provides flydubai
with a stable, predictable maintenance structure that
reduces costs associated with ad-hoc maintenance work
and unscheduled airframe grounding. It also extends
the operational availability of the fleet, which currently
stands at 20 aircraft. flydubai has another 30 Boeing
737-800 NG aircraft on order.
Goodrich signs two key support agreements
with Emirates
Goodrich signed two support agreements with
Emirates. The first is a General Terms Agreement (GTA)
which provides the framework for all future MRO
agreements between the two. The second represents
the first application of this GTA. Under the 10-year
Specific Business Agreement, Goodrich will deliver
comprehensive overhaul and support services for the suite
of 16 passenger evacuation slides on the Emirates Airbus
A380 fleet. All maintenance work will be conducted at
Goodrich’s Middle East MRO campus in Dubai.

Industry News 5
Sabena technics uses know-how, partnerships to expand in South America, Asia and Middle East
Sabena technics knows a thing or two about the aviation
industry, having been in the business since 1923. From
its early days as the flag carrier of Belgium to its transformation
into a multinational MRO with 17 sites in seven
countries, the company is no stranger to doing business
outside the comfort zone of Europe and the US.
Company CEO Christophe Bernardini told AviTrader
MRO that 2012 will be a challenging year for the industry.
He believes that continuing pressure on airlines will see
them outsourcing more MRO work as they are increasingly
forced to focus on their core business of flying.
Christophe Bernardini
Sabena technics
“MROs need to offer cash-strapped airlines competitive prices accompanied by a
capacity to respond to business needs and accompany them in their development,”
he said. “We also need to be attentive to the life-cycle of airlines and their financial
evolution. Nowadays, given the leasing options available, airlines can as easily be
created as they can go bankrupt.“
Looking ahead to 2012, Sabena technics is focusing on its geographical expansion
in growth regions such as Asia, the Middle East and South America. It is the final
stages of setting up a component repair shop in Bogotá, Colombia, the logical
extension of the 10-year full component support deal it won earlier this year from
Avianca-TACA to service the Latin American carrier’s Airbus A320 fleet.
“We add value in developing markets where our know-how is an asset,” continued
Bernardini, “and where we are also attentive to external growth and partnership
opportunities to accompany the growing fleets in these regions. Critical size
is a key to success.”
In the past month, Sabena technics has sealed a number of agreements that reinforce
its international presence:
• Spare Solution Support India (SSSI) contracted Sabena technics for the repair of
Airbus A320 and A321 components to ensure optimal support for its pool customers.
Through its component services division, Sabena technics launched a repair
management technical collaboration with SSSI, a joint venture between EADS/Airbus,
Indian partner Airspace Infrastructure and Turkish MRO Airlogic, which offers
component and logistics support.
• Sabena technics also signed a three-year component repair services agreement
with ULS Airlines Cargo, a Turkish cargo operator formerly known as Kuzu Airlines
Cargo, which operates international cargo services with a fleet of three Airbus
A300-84s and three A310-300s. “This increased flow of repair rewards our efforts
and is a testament to the high level of services provided by Sabena tecnnics on these
specific aircraft types,” said Bernardini.
• Qatar Airways renewed an existing agreement with Sabena technics by signing an
additional five-year component support contract. The new agreement will include
component repair and overhaul as well as pool access for its fleet of Airbus A300-
600 aircraft. The contract will be operated with a dedicated customer support manager
on-site in Doha.
• Messier-Bugatti-Dowty (Safran Group) and Barfield, the US subsidiary of the
Sabena technics Group, signed two agreements. In the first, Barfield will contract
the repair of hydraulic equipment to Messier-Bugatti-Dowty’s facility in Querétaro,
Mexico, and in the second agreement Messier-Bugatti-Dowty will grant an exclusive
license to Barfield for the maintenance of electromechanical equipment, covering
all of North America.
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Industry News - Technology 6
Ameco Beijing becomes first Chinese company to install in-flight WLAN
Ameco Beijing became the first
company in China to install in-flight
WLAN when it added the service to
an Air China Boeing 737-800 last
week, making Air China the first
carrier in China to provide WLAN
services. Thanks to a Chinese
Civic Aviation modification design
approval (MDA), Ameco Beijing was
able to install the server in the cabin,
providing passengers with more
entertainment options accessible via
WLAN through portable devices. Installing in-flight WLAN on an Air China Boeing 737-800 Ameco Beijing
• Lufthansa Technik and partners successfully tested a new ‘green-taxiing’ system
for ground operations: electric motors installed on the main landing gear of an
Airbus A320 aircraft took over all necessary movements of an aircraft on ground.
The system integrates electric wheel drives into the main landing gear to propel the
aircraft during ground operations. The wheel-drive technology leverages its industryleading
electric motors’ continuous torque and power density to propel the aircraft.
L-3 Communications, Fraport and sister companies Lufthansa and Lufthansa Technik,
with Airbus support, teamed up to jointly test the technology demonstrator which
could lead to a new system for aircraft taxiing.
• Qatar Airways will be the launch customer for Boeing’s new Electronic Flight
Folder (EFF). The carrier will install the EFF on their entire fleet of Boeing 777s starting
in 2012, making it the first in the world to transmit day-of-flight data such as
flight plans and weather information directly to the 777 Class 3 Electronic Flight Bag
(EFB). Qatar Airways will also install the Electronic Flight
Folder on their future Boeing 787 fleet, making it the
first airline to deploy such advanced operational software
on both models.
• Monarch Airlines selected Goodrich Corporation
to provide SmartDisplay Electronic Flight Bags
(EFB) for its Airbus A300, A320, A321 and A330 aircraft.
Monarch has completed initial installation of the
system on an A321 and conducted a successful twomonth
in-service demonstration period. SmartDisplay
EFBs will be rolled-out across the Airlines’ remaining
Airbus fleet with planned retrofit completion by the
second quarter 2012. Goodrich’s Sensors and Integrated
Systems team in Burnsville, Minn. is producing the
systems and performing integration activities.
Goodrich will also provide two Goodrich SmartDisplay EFB units, ARINC 828-compliant
aircraft interface devices and Carlisle Interconnect Technologies EZMount display
mounts and installation kits for each aircraft. This advanced EFB portfolio, known as
Goodrich’s cockpit data management system, provides extensive connectivity to aircraft
data networks and systems, allowing Monarch to maximize EFB utility and the
associated operational savings.
• SR Technics and Abu Dhabi Aircraft Technologies (ADAT), both part of
Mubadala Aerospace’s global MRO network, signed a contract with Airbus for
the implementation of the Airbus Managed Inventory (AMI) service at the Dubai
Airshow. The implementation of AMI – an automated inventory management system
– will ensure the replenishment of the high-usage and non-repairable Airbus
parts of the stocks of SR Technics and ADAT.
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To discuss any of your maintenance and engineering needs, please contact:email:
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Cover Story - 2012: The MRO Outlook 8
An uncertain year ahead for the MRO sector
as the global economy teeters on the brink
In this issue, our final for 2011, we’ve handed the floor over to industry executives from around
the world, in a range of different sectors, to hear their predictions for the year ahead
TONy TyLER, DIRECTOR GENERAL and
CEO of the International Air Transport Association
(IATA), put the writing on the wall last
week when he downgraded the organization’s
central forecast for airline profits in 2012 from
$4.9bn to $3.5bn, for a net margin of 0.6%.
But that was the good news. In the next breath,
he said that the economic turmoil facing Europe
if governments fail to resolve the Eurozone
sovereign debt crisis would lead to aviation
industry losses of over $8bn - the largest
since the 2008 financial crisis. If the banking
crisis is averted, Europe is still almost certain
to fall into a brief recession. European carriers
are expected to post losses of $600m in 2012.
Profits in other regions of the world will be
considerably weaker than those of 2011.
In the context of this grim outlook for the
year ahead, AviTrader MRO spoke to a range
of industry professionals to hear their views
on the MRO industry and to gain some insight
into industry sentiment as we embark
on an uncertain future. We hand the floor to
our contributors:
CRySTAL BALL GAzING
According to Katia Diebold-Widmer, head of
marketing at MTU Maintenance Hannover,
the aviation business has changed since the
last downturn. “Unlike previous downturns
which led to a short-term heavy demand drop
As I sit here today, enclosed by mountains of MRO
related data which I have been trying to translate into
prose, it seems that now is a time of record orders
for increasingly technically complex aircraft. Even a
simpleton like me can deduce that more complex
aircraft, with more advanced bits, requiring more
advanced knowledge, for more advanced overhaul,
rolling off the production line in ever greater numbers
should point toward good times for MROs. In
fact, I am putting the pen down and I am off to start
an MRO - see you in the queue for the RFP, thanks
for your time reading this, job done.
and a high decrease in utilization, with most
parked aircraft put back into service shortly
thereafter, we are now faced with a more
structural type of change.”
This time around, she says, fuel-inefficient MROintensive
aircraft and engines have been parked
in high numbers, and most of them are unlikely
to come back. “Production rates for new aircraft
have stayed stable, and we are seeing
record orders for new technology aircraft.”
“In a worst case scenario,
should the Eurozone crisis
evolve into a full-blown
banking crisis and European
recession, IATA estimates
that the global aviation
industry could suffer losses
exceeding $8 billion in 2012”
Tony Tyler, director general, IATA
However, climbing into my coat, before venturing outside, into the
crisp winter air, in search of an enthusiastic financial backer and willing
workforce, there is a niggling doubt in my mind. Sadly it is not just
“will I need a scarf?”
Older aircraft are being replaced by newer, less
MRO-intensive ones that enjoy both a ‘honeymoon’
period of five to seven years before their
first shop visits, and longer engine on-wing
times, she says. New technology engine models
represent 50% of the active commercial jet engine
fleet, compared to 33% before the crisis.
Many aircraft are being retired and dismantled,
which has a direct repercussion on MRO demand:
shop visits no longer occur, as engines
are being replaced by surplus or exchange engines
at a lower cost for operators seeking to
use up an engine’s green time. This development
has led to the emergence of a new breed
of competitors, traders and brokers who are
also tapping into the MRO market.
Lower overall demand has led to increased
price pressure and competition. According
to Diebold-Widmer, the MRO market has lost
15-20% of its size - or three years of growth
- due to the downturn.
Western Europe will be most vulnerable to
increased shocks to the market. The continuing
trend of outsourcing MRO among cashstrapped
airlines and cost-conscious low-cost
airlines will further the migration of maintenance
activities to lower-cost regions like Asia-
Pacific and China, according to David Conrad,
director, International Sales and Marketing at
Guanghzhou-based GAMECO.
“We are seeing an increasingly crowded MRO
market in the region, especially in China, with
many new entrants joining long-term established
MRO providers. New entrants include
OEMs, international MROs, new joint ventures
or partnerships and third-party component repair
houses. The bottom line is that in 2012,
The outlook for MROs in 2012? Surely that is an easy question to answer . . . asks Ben
Jacques, commercial manager at aviation consultancy IBA
Ben Jacques
IBA
The doubt is that the longer term MRO outlook may initially seem great
based on manufacturer order books, but is that rose tinted longer term
view representative of 2012’s revenue earning potential? Perhaps not?
The MRO industry has not been immune to the pressures of the most
recent global downturn and as we enter 2012 that very same global
downturn is evolving. Trying to ditch the word global in favour of something
more fresh and bang on trend, perhaps ‘Euro centric’ or as Europeans
would probably prefer ‘Western (including USA) downturn’
would sit better as a title for the next 12 months.
Rising fuel prices and reduced consumer expenditure dampened fleet
growth and also existing fleet utilisation as airlines couldn’t get enough
seats filled to warrant the planned flying. Combine this with the predicted
surge in A320 and B737NG shop visits not materialising, and
one can quickly explain the reduced MRO expenditure of 2009-10. The
numbers for 2010-2011 will likely show a small, cautiously optimistic
(continued overleaf)
AviTrader MRO - December 2011

Cover Story - 2012: The MRO Outlook
David Conrad
GAMECO
MRO competition is going
to greatly increase.”
MOvING AHEAD IN
A CRISIS
Things aren’t going to be
easy next year. But the
possibility of European
recession and the ensuing
spread of the contagion
around the world is not
unexpected, and MRO-sector professionals
have found ways to batten down the hatches
and prepare for a rough few months,
An MRO’s ability to weather the storm will
depend in great part on where it is located.
GAMECO benefits from its position as the
in-house MRO of China Southern, an airline
boasting the largest fleet in Asia with 420
aircraft - a number that is set to grow to 600
in the next five years. It doesn’t hurt that its
other parent is Hutchinson Whampoa, a global
giant with turnover of HKD187bn ($24bn) in
the six months to June 30th 2011.
To meet its long-term goals of developing capabilities
for new platforms such as the Airbus
A380, the Boeing 787 and the Embraer E190,
while adding to existing ones, GAMECO is mak-
PERFORMANCE YOU CAN COUNT ON
ing significant investments in facilities, airframe
and component repairs. “You have to build a
winning portfolio of offerings,” says Conrad.
The company has also secured partnerships
with airframe and component OEMs, implemented
enterprise-wide Lean / Continuous Improvement
programs, instituted a wide array of
“In 2012, we expect to see
Boeing and Airbus working to
gain more revenue from the
aftermarket, and component
OEMs increasing their focus
on controlling the aftermarket
for their equipment... The
bottom line is that in 2012,
MRO competition is going to
greatly increase.”
David Conrad,director, International Sales
& Marketing, GAMECO
‘best solution’ business models for customers
and established a long-term focus to become
the premier MRO in the Asia-Pacific region.
Lofty goals indeed. But as they say, size isn’t
(continued from p8) improvement, but probably
not the one hoped
for during 2010, thought of at the time as
cautiously optimistic.
Despite the existence of calendar-driven
checks, demand for MRO business is primarily
driven by aircraft and engine utilisation,
which as stated above, reduced in line with
passenger demand, and of course, the realisation
of overcapacity.
Airlines have been under pressure in recent
years to make their operations more efficient
and inevitably they will put the aircraft they
fly, and the engines that power those flights,
under the microscope. In response to this
scrutiny and demand for better economics
the manufacturers endeavour to make
aircraft that spend more time available for
operation between checks and in the case of
engines, spend more time on-wing and less
time in shop.
That drive for efficiency doesn’t stop within
the airlines. Equally MROs look to be more efficient,
able to offer quicker servicing, reducing
the time that an airline’s asset, leased or
otherwise, of course, spends unavailable for
operation.
(continued overleaf)
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9

Cover Story - 2012: The MRO Outlook
everything. In this environment,
the ability to
be nimble and creative in
developing customer solutions
will go a long way
towards staying ahead of
the competition.
“Our industry has been
in rough waters for a
while,” says Thomas Ibsø,
group director, Sales and Marketing, of Danish
wheel and brake specialist TP Aerospace,
“and it is difficult to see the end of the storm
just yet. Airlines find themselves ever more
cash-strapped, MRO providers are expected
to provide wider and more complete support
packages for their customers - at lower prices
with no reduced expectations on TAT and reliability.”
Ibsø believes that reducing operational costs
will remain the focus for airlines in 2012,
which will increase demand for, in particular,
power-by-the-hour (PBH)
support programs, further
intensifying price competition
in the MRO sector.
“From our point of view,
as a wheel and brake
specialist, we foresee the
same trend, as wheels
and brakes are a high cost
chapter for all airlines.”
Thomas Ibsø
TP Aerospace
To maintain their competitive
edge, TPA will focus
on its Cycle-Flat-Rate
programs, which ensure
customers reliability, immediate
availability and
the ability to budget fixed operational costs
across whole platforms and fleets. “Through
flexibility, high service and immediate plugand-play
setups, we aim to distance ourselves
from larger and less flexible MRO nose-to-tail
providers. And in 2012, we will increase inventory.
Utilizing a buy-and-lease back option
our customers can reduce inventory and
administration, leading ultimately to reduced
overall costs.”
Werner Aero and Magellan Group are examples
of companies that have moved upstream
from their early days as parts suppliers to offer a
wider range of solutions that will provide ballast
in the stormy year ahead.
Mike Cazaz, CEO of New Jersey-based Werner
Aero, agreed that uncertainty is the new reality
in the industry. “We are all subjected to
fluctuations in both economy-related and geopolitical
events. At the same time, aircraft are
becoming more efficient everyday and hence
will require less maintenance going forward.
At Werner, we are looking for ways to reinvent
ourselves and our business, and 2012 will be
“Reducing operational
costs will remain the
focus for airlines in
2012, which will increase
demand for
PBH support programs,
further intensifying
price competition in
the MRO sector.”
Thomas Ibsø, TP Aerospace
the stepping stone for that. We are moving
more towards providing services and support,
using our current expertise, as opposed to selling
parts and engines.”
Rob Fessler, vice president Sales and Marketing
of the North Carolina-based Magellan Group,
meanwhile, says that his company is looking
ahead to 2012 to again increase its revenues
and expand its business toward newer technologies
to match customer demand. “The
aftermarket business model demands that we
constantly approach newer technologies and
make investments accordingly. The airlines
have always been cash-strapped. 2012 will be
no different. The industry has learned to incorporate
and consider credit analyses as a normal
and onerous feature of doing business.”
“Often, as aircraft reach a mid-life stage,
maintenance costs mount and are often difficult
to predict,” continues Fessler. “The aftermarket
helps to defray some of those costs
by offering quality airframe components and
engine parts to meet criti-
cal schedules at discounted
prices. We are meeting
this market by replenishing
our inventory with new
aircraft and engines.”
THE OUTLOOk FOR
ENGINE MRO
The high oil prices of the
past two years have completey
changed the face of
the aviation industry, with
two new fuel-efficient models,
the Airbus A320neo
and the Boeing 737 Max,
responsible for billions of dollars-worth of new
aircraft orders in the past year alone. The success
of the new planes rests securely on the fuel
savings provided by the engines that will power
them, Pratt & Whitney’s revolutionary PW1000
Number of aircraft
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Aircraft Retirements 2001-2011
10
(continued from p9) We have seen MRO
consolidation, streamlining
where possible, alliance and partnership
creation and in some cases, mergers.
The biggest MRO spend is in North America,
followed by Europe and although we
don’t expect this to change completely in
2012, the growth of Middle Eastern and
Asia Pacific entities should not be underestimated
as they are not suffering the same
economic turmoil as the two leading areas
of MRO spend.
Labour rates are most likely to dictate the
success of those growth region MROs in
continuing to attract business from Europe
and North America. Considering that in
some instances labour can make up around
80% of the overall cost of the check, and
that labour can vary from $35 per man hour
up to $100 per man hour, it is not surprising
that the cost of labour is a big factor when
choosing an MRO.
Rather than risk losing business, some of
the MRO alliances, partnerships and mergers
have been a case of Western MRO firms
buying into an increasingly eastern, more
competitively priced labour supply.
Although it has been talked about in terms
of reduced maintenance requirements for
the newer aircraft, and likely a reduction
again when NEOs and MAXs arrive in the
next few years alongside their associated NG
engines with longer on-wing times, there is
a need for MRO growth in some regions.
India and China seem comparatively fledgling
compared to their order book. It is not
unreasonable to imagine that some speculative
investors from the Far East, who
aren’t so affected by the not-so-global
downturn, might well investigate entering
the MRO market there.
There is probably a (continued overleaf)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
B737 B747 B757 B767 A300 A300-600 A310 A320 MD-80
AviTrader MRO - December 2011

Cover Story - 2012: The MRO Outlook
geared turbofan and CFM International’s Leap-
X high-bypass turbofan, which both boast fuel
consumption savings of up to 16%.
Diebold-Widner believes that future demand
for engine MRO will strongly depend on fuel
prices. “Should prices spike up again, as in
2008, there could be another wave of retirement
of fuel-hungry aircraft with the highest
MRO demand, which would immediately reduce
the overall MRO market size.
MTU’s internal engine MRO forecast, based
on a normal oil price scenario, estimates the
size of the commercial engine MRO market
at $16.9bn in 2011, growing to $24.5bn by
2021 in constant dollars (CAGR 3.8%). Nevertheless,
engine MRO is, unlike airframe, subject
to strong material price escalation, so that
escalated growth should amount to a 7.5%
CAGR, meaning a $34.9bn market by 2021.
“At first instance,” explains Diebold-Widner,
“this looks like a strong increase. However,
shop visits should only grow with a 1.8%
CAGR, from approximately 8,200 in 2011 to
9,800 in 2021. This is linked to the fact that
while newer engines will experience far longer
on-wing times, the actual shop visit cost will
increase, compared to older engine types,
once the visit is due.”
MORE OR LESS CAPACITy?
Overcapacity in the MRO market is a subject of
some debate. While most professionals in the
business would agree that
it is widespread, it is clear
that it depends on your
regional perspective. European
MROs executives
agree that there is the
persistent overcapacity in
the market. Walter Heerdt,
senior vice president
of Marketing and Sales
at Lufthansa Technik, said
that although the MRO
Walter Heerdt
LHT
market is growing, “we see new capacities
outgrowing the need. Overcapacity will therefore
persist.” Lufthansa Technik is tackling the
situation head-on by providing optimized tailored
service packages and constantly monitoring
processes and key performance indicators
(KPIs). “Adding value to our customers’ operation
and balance sheet makes the difference,”
says Heerdt. “We believe that we are well set
for this since we have the value chain in-house,
and we don’t have to combine services from
different sources - something which leads not
only to surcharges, but to delays.”
Overcapacity appears to be less of a concern
11
(continued from p10) debate to be had as to
PMA parts in 2012 as
an increasing number of more modern aircraft
are available for teardown, increasing
the supply of refurbished parts on the market.
If this increase in supply is coupled with
surplus stock from parts that may have been
produced and bought up in anticipation of
a higher level of checks during 2010/2011
which didn’t happen due to the reduced
utilisation, then pricing competition versus
PMA may well be closer than expected.
Something that is rarely directly touched on
in regard to MRO outlook is customer service,
and although this can mean how polite
the person on the end of a phone is, it can
equally mean how well the MROs are matching
the changing demands of the operators
as they themselves adapt to the changing
market they operate in, and the changing
attitudes of the shareholders and interested
parties who they find themselves reporting
to. Without wishing to light the blue touch
paper, I think this is probably to do with
the adoption of real time visibility on cost,
turnaround times, parts availability and how
to best create transparency when delivering
good, cost effective, MRO services, which
are also profitable.
Fly with confidence
Sabena technics is by your side.
As a leading independent provider of
maintenance services to civil and military
operators, we provide tailor-made cost-effective
solutions through dedicated activities.
Airframe services
Component services
Integrated services
Military services
Training services
One group, one vision, your satisfaction

Cover Story - 2012: The MRO Outlook
New MRO frontiers in 2012: The case for South America
A lot of ink has already been spilled over the emergence of east and
south-east Asia and the Middle East as the brilliant new frontier for the
global MRO industry.
But there’s a strong case to be made for South America. The region
has largely survived the global financial downturn unscathed, having
learned its lessons the hard way during its own financial meltdown in
TAP M&E Brazil’s 29m high Hangar 5 in Rio de Janeiro by night
2002-03. The continent’s GDP rose by an enviable 5.6% in 2010, and
notwithstanding the contagion spreading from Europe, it is still forecast
to grow by close to 4% both this year and in 2012. Low inflation,
wage increases and employment growth have lead to rapid growth in
air travel. Add to that the fact that the 2014 Fifa World Cup and the
2016 Olympic Games will both be held in Brazil, and the region is due
for a tourist explosion in the next few years.
The region’s aviation industry has grown apace. The merger of Chile’s
LAN and Brazilian carrier TAM, due for completion early in 2012, will
create LATAM,the world’s second-largest airline after Air China, with
a market value of $11.3bn. Another tie-up last month between regional
powerhouse Avianca-Taca and Chilean carrier Sky is expected
to presage further consolidation in the region, creating the economies
of scale that will allow South American airlines both within and to
expand beyond their borders.
With such growth in the airline sector, MRO growth is sure to follow.
The region already boasts one of the biggest MRO facilities in the
Americas in TAP Maintenance & Engineering, which owns the region’s
the further east you go. GAMECO’s Conrad
claims there is no issue with overcapacity in
Asia-Pacific and China, particularly in light
of the expected growth by airlines in these
regions. “We believe that at current growth
levels, it will be at least another three to five
years before capacity here starts to catch up
with growth.”
That said, he points to an increasingly crowded
MRO market in the region, especially in China,
with a number of new entrants, including
OEMs, international MROs, new joint-ventures
or partnerships and third-party component
repair houses, joining long-term established
MRO providers. “The bottom line”, he says,
Expenditure $bn
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
largest hangar, the eight-bay Hangar 5 in Rio de Janeiro, as well as
comprehensive airframe and components facilities in the southern city
of Porto Alegre.
TAP M&E Brazil is the former MRO arm of the now-defunct Brazilian
flag carrier Varig, which went bankrupt in 2005. TAP Portugal
moved in and acquired Varig Engineering and Maintenance (VEM)
and since then has established a formidable
MRO network spanning Europe and South
America, and offering capacity and capability
unmatched in the region.
TAP M&E Brazil has triple certifications from
the FAA, EASA and the Brazilian authority,
the ANAC, for all Boeing, Airbus and Embraer
commercial aircraft except the Boeing
787 and the Airbus 380. It is a member of
the Airbus MRO network and an authorized
service centre for Embraer. Its Rio hangar has
four lines for widebody and four for narrowbody
aircraft, while its Porto Alegre (POA)
facility can accommodate one widebody and
five narrowbodies simultaneously. In addition
to airframe maintenance from A to D checks,
the two facilities between them offer aircraft
painting, engineering and planning support,
complete overhaul for landing gears, APUs, a range of PWC engines
and avionics and accessories maintenance for over 17,000 part
numbers.
But change is afoot for TAP M&E Brazil. Parent company TAP Portugal
is set to be privatized in mid-2012, with the parameters due to be
finalized as early as March. There are several possible suitors for the
Brazilian unit: IAG, the parent of recently merged British Airways and
Iberia, is believed to be keen to acquire TAP’s enviable network of 10
destinations and 74 weekly flights to Brazil, together with the top
airframe and component MRO in the region.
Another scenario could be the separation of TAP M&E Brazil from the
Lisbon maintenance unit. There are thought to be a number of interested
airline buyers in Latin America, ranging from LATAM to Brazil’s
second largest carrier Gol, which recently acquired smaller rival WebJet.
AviancaTaca is also understood to have expressed an interest.
Whichever way it goes, the buyer will benefit from taking Latin America’s
largest and most experienced MRO on board, while TAP M&E
would benefit from the influx of new business of an inhouse airline.
Projected MRO Spend per Region
2011 2012 2013 2014 2015 2016 2017 2018 2019
Africa Asia-Pacific Europe Middle East North America South America Source: IBA
12
AviTrader MRO - December 2011

Cover Story - 2012: The MRO Outlook
is that in 2012, MRO competition is going to
greatly increase”.
MTU’s Diebold-Widner agrees, but points out
that the expected ‘logical wave of bankruptcies
and/or consolidation’ has not occurred. Only a
few competitors, mostly smaller independent
providers, have exited the market since 2009.
The only major consolidation in the engine
MRO market, she says, occurred when Pratt &
Whitney closed its Cheshire Centre and transferred
its activities to Asia. At the same time,
Pratt & Whitney has opened two new engine
centres in China and Turkey, both in cooperation
with airlines.
Other new shops include Snecma SAMES in the
burgeoning Mexican aerospace hub in Querétaro,
STATCO, the joint venture formed this
autumn by ST Aerospace and Xiamen Aviation
Industry in China and crosstown rival TEXL,
another joint venture set up in 2010 by GE
Aviation, Hong Kong’s HAECO, Chinese MRO
TAECO, Cathay Pacific Airways and again, Xiamen
Aviation. MyTechnic in Turkey is another
example - funded by China’s HNA Group and
Hong Kong private equity investor Bravia Capital,
it is at the centre of a growing Chinese-
Turkish economic relationship and a force to
A group of 17 European airlines and MROs are
set to file a complaint with the European Commission’s
competition authority, over what
they allege is the anti-competitive behaviour
of component manfacturers that is damaging
their businesses.
The group claims that certain component
OEMs have, within the past few months,
begun charging exhorbitant fees for Component
Repair Manuals (CRMs) that they previously
gave to providers for free. They say that
they are now also prohibited from subcontracting
repairs, and instead have been told
that any work not completed in-house must
be sent back to the OEM for repair.
One leading OEM, however, rejected the
group’s claims. The company, which has
moved strongly into the MRO aftermarket,
told AviTrader MRO that the OEMs are entitled
to seek a return on their considerable investments
in developing material in the first place.
Competition, moreover, is healthy, he said.
“We have this OEM v MRO debate all the time.
The message is – the level of service providers is
On your next move...
MAKE THE RIGHT MOVE.
Werner Aero Services,
the winning move for:
Asset Management of
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The battle for the aftermarket heats up as 17-strong European airline
and MRO group fights back
not declining. It’s increasing
– and that’s good for
customers; no one wants
a monopoly.”
But Jorge Sobral, executive
board member at
TAP Maintenance & Engineering,
said that ‘there
has been a significant
change in philosophy on
the part of the compo-
Jorge Sobral
TAP M&E
13
nent OEMs. We are being held to ransom - but
we are fighting back.”
The group met in Paris late last month to discuss
the next steps in their campaign. Also
present at the meeting were lawyers appointed
by the group to act on their behalf. “We
don’t exclude legal action,” said Sobral.
In Paris, the group agreed on a three-pronged
approach. First is to bring the Association of
European Airlines (AEA), an alliance of 35 major
European airlines, onside, including some
of the biggest European players.
(continued overleaf)
We provide one source for spare parts, engines, repairs and overhaul, at
a fixed cost per hour. Werner Aero Services, we are safety and quality
first! Werner Aero Services, the winning move.
Worldwide locations. Please visit us at www.werneraero.com or call +1.201.785.9700.

Cover Story - 2012: The MRO Outlook
Expenditure $bn
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019
be reckoned with, as Turkey’s GDP growth is
expected to remain above 4% in 2012.
Further capacity and capability increases have
been announced at Emirates, Mubadala Aerospace,
SIAEC, Air India (through a joint venture
with Boeing) and other companies in the Middle
East, Asia and Latin America - all aimed at
accessing fast-growing markets, and most of
which are partly supported or subsidized by local
governments or airlines.
THE BATTLE FOR THE AFTERMARkET
There is no doubt that the OEMs will continue
to take a large share of the aftermarket - and
this share will only increase as companies like
American Airlines (which filed for Chapter 11
bankruptcy protection last month) face new
outsourcing decisions to remain competitive,
according to Jason Caldwell, executive vice
president of Global Sales and Marketing for
the Wencor Group, a US-based global distributor
of aftermarket parts. Large independent
MROs will also gain share from this shift, he
believes, and that will be critical to parts suppliers
like Wencor.
To capitalize on the shift, Wencor is investing
heavily in its international locations, putting
new leadership in place in the US, Europe and
Asia, where it is moving into a new larger facility
in Singapore and expanding its business
through its Wencor Huafeng joint venture in
China. “We believe much of our growth in the
next few years will come from our international
customers,” said Caldwell.
To that end, Wencor has also broadened its
product scope, investing in newer platforms
like the 737NG, A320 family, 777 and a few
other models which they see as critical for the
MRO market over the next five years.
The move of the OEMs into the aftermarket is
not a new phenomenon, particularly in the engine
segment. In fact, according to MTU, approximately
50% of engines are currently under
contracts to OEMs, either on an exclusive
Projected MRO Spend by Sector
Components Modifications Airframe (Heavy) Line/A-Checks Engine
Source: IBA
or non-exclusive basis, while closer to 90%
of some engine models, like the Rolls-Royce
Trent, are covered by an OEM Total Care-type
agreement, which to a large extent go towards
providing a return on the OEM‘s original
investment in developing and manufacturing
the engine. What is relatively recent, according
to GAMECO‘s Conrad, is the increased activity
of the airframe OEMs into the MRO market
space, as well as recent moves by component
manufacturers to “restrict technical data to try
to control the aftermarket“.
“This trend is mostly a result of the constant
‘tug-of-war’ for profits in the industry, as OEMs
look to aftermarket revenues to recover investments
(and make profits) from developing the
systems on new airframes,” says Conrad. “In
2012, we expect to see this trend continue.”
The continuing expansion of OEM activity into
the aftermarket has spurred aviation regulation
agencies like the FAA to sit up and take
notice. It is inevitable that the OEMs will look
for a return on their considerable investments
by exploiting the aftermarket, and an increase
in their activity, through point-of-sale packages
and other measures will only increase, unless,
as Charles Willis, president of Willis Lease, a
major engine lessor, points out, there is a pushback
from governmental authorities and / or
airline trade associations.
In fact, a move against OEM dominance in the
aftermarket has already occurred. In October,
the FAA issued a draft Policy Statement regarding
what it sees as ‘unacceptable‘ requirements
imposed by OEMs that publish Instructions for
Continued Airworthiness (ICAs), including language
that imposes ‘anti-competitive requirements
as well as language that undermines the
FAA’s safety regime’ (see story page 13).
Magellan’s Fessler recognizes the OEMs’ success
in ‘dipping their toes into the aftermarket
pool’, but says they would do well to appreciate
its ‘trading nature and nimbleness’.
14
The group are also writing to EASA, the European
aviation standards agency, to ask it to
adopt a similar position to that of the FAA,
the US aviation authority, which published
a draft Policy Statement in October seeking
to restrict OEMs that publish Instructions for
Continued Airworthiness (ICAs) from using
these or the ICA licensing agreements as a
means for implementing certain types of unacceptable
requirements.
This FAA’s draft Policy Memo lays down that
some language in the ICAs will be deemed
unacceptable, including language that imposes
‘anti-competitive requirements as
well as language that undermines the FAA’s
safety regime’.
The group also plans to meet with the competitions
authority at the European Commission
to discuss the legal ramifications of what
it says is an anti-trust issue. “These measures
adopted by the component OEMs are preventing
us from carrying out our business,”
said Sobral. “We have long-term fly-by-thehour
component repair contracts with customers
going back five to eight years. We
cannot now go to them and say we have to
increase our prices because the OEMs are
charging us more.”
MROs have also been told that repairs not
handled in-house cannot be subcontracted
out, but instead must go back to the OEM
for repair - at what they say are higher
prices. The group alleges that the OEMs are
also stipulating the use of Supplier Furnished
Equipment (SFE). “There is now less choice,”
says Sobral. “This shift in the landscape is to
the exclusive advantage of the OEMs.”
The implications for MROs like TAP M&E and
its fellow group members are worrying. They
believe a lack of choice leads to monopoly
control of the market by the OEMs. Prices for
OEM parts and services have been increasing
by 6-7% per year in any case. Stifling competition
and cutting off an operator’s ability
to seek out the best deal, at a time of record
high oil prices and a deepening European financial
crisis, could put many companies out
of business.
After meeting at Le Bourget in June and
Madrid in September, the latest round of
talks in Paris are expected to lead to action
early in the new year. “The OEMs’ move
into the aftermarket has created a number
of disadvantages for us,” concluded Sobral.
“But we do have some advantages too.
The MROs have the operational experience
that the OEMs lack.”
Harsh realities of a market in crisis - or a real
example of unfair trading practices? 2012
will be a year that could shape the face of
the industry.
AviTrader MRO - December 2011

Cover Story - 2012: The MRO Outlook
“Rather than fold an aftermarket model into
their own, the OEMs should consider partnering
with the aftermarket to establish definite
lines of business that address legacy aircraft,
engines, systems and components. Rather
than remaking a business, they could learn to
harness skills of the existing aftermarket that
already addresses its nuances, and concentrate
on appreciating its distinctive characteristics.”
IF yOU CAN‘T BEAT ‘EM, JOIN ‘EM
Rather than take the fight to the OEMs, other
MROs have made the choice to work with
them. The Mubadala Aerospace MRO network,
comprising Zurich-based SR Technics,
Abu Dhabi’s ADAT and the group’s financing
arm, Sanad, aims to build groupwide deals
through becoming a strategic partner with
both OEMs and airlines.
“The OEMs are very established in the engine
aftermarket, and have extensive market share
through their own aftermarket network and
through the creation of joint venture partnerships
with major airlines”, James Stewart,
group CEO, told AviTrader MRO. “However,
we are also starting
to see this developing
further in the component
arena as well. In
response to this, SR
Technics and ADAT
have recently entered
into several partnership
agreements with OEMs
including Panasonic,
James Stewart
Mubadala Aerospace
GE and Hamilton Sundstrand.
We have also recently
signed an agree-
ment with Airbus to use their AMI system.”
The set-up of the Mubadala Aerospace MRO
network, announced last month, was constructed
as a response to the changing global aviation
service market, and is aimed at developing an
integrated, value-added offering, covering technical
services, technical training, supply chain
management as well as traditional MRO services
through its global operation locations.
Annual Expenditure $bn
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
The near-term focus, according to Stewart, is
to develop a single go-to-market strategy to
benefit both customers and partners. “In addition
to the ability to support liquidity in the
current tough economic climate, both SR Technics
and ADAT work with sister company Sanad
Aero Solutions to incorporate engine and
component financing elements into customer
agreements. Unlike many MROs, we are also
able to commit to forward purchases.”
GO EAST, yOUNG MAN - AND SOUTH
Which regions of the world will be the success
stories of 2012? According to Charles Willis,
China, Russia, India and South America are the
areas likely to expand the most. “We’re putting
more assets into China, Brazil and the Middle
East,” Willis told the audience at a panel session
at MRO Europe in September. ‘Only 10% of
our business now derives from North America.
There’s been an entire change in dynamic.”
Wencor‘s Caldwell says that Latin America
and India will “see some swing in MRO spend
coming their way, but Asia is still the region to
watch”.
“China itself will continue to expand dramatically,
and other countries like Indonesia,
Malaysia, Singapore and Thailand are poised
to take on much more than they do today.
Material Spend by MRO Sector
An Airbus A310 under wraps at TAP M&E Brazil’s Rio hangar. South America is earmarked as an area of MRO growth in 2012 and beyond
5.0
0.0
2011 2012 2013 2014 2015 2016 2017 2018 2019
Modifications Airframe (Heavy) Line/A-Checks Components Engine
15
Source: IBA
Indonesia in particular seems ready to go to a
new level in MRO. That is why we are devoting
significant time, effort and resources into
developing this region.”
A word of warning from MTU: although these
regions, particularly India, Indonesia and Russia,
will experience very high growth rates,
they are beginning from a far smaller base. As
a consequence, “it may be difficult for these
countries to set up in-country MRO facilities
with sufficient economies of scale in the medium
term, especially as demand is scattered
among many operators, and the ‘cake’ has
already been divided among various existing
MRO providers.”
So, in short, the key trends that will characterize
2012 are globalization and consolidation,
as larger European and North American
players look to extend beyond their hinterlands
into lower-cost regions in Asia and Latin
America. Airlines will increasingly demand
integrated support services that outsource
the risk and provide a predictable cash flow.
Cost pressures on MROs will therefore be
even more intense in the coming year. It’s not
a pretty outlook, but the sector has survived
rough patches in the past, and will survive
again - leaner and missing a few members,
no doubt, but stronger for the experience.
AviTrader MRO - December 2011

Leasing News
Aircraft and engine finance
Financing future fleets
THE RECORD ORDERS FOR AIRCRAFT AND ENGINES that
came out of the major industry shows this year, as well as massive
commitments such as Lion Air’s $21.7bn order for 230 Boeing
737 Max and NG jets late last month, leave us with at least two
certainties: Airbus and Boeing will continue to keep their production
rates high and growing throughout 2012 and beyond - and
that these new orders must be paid for somehow.
And therein lies a niggling doubt: Europe’s biggest banks have
been traditional sources of finance for eager buyers, but the stillunresolved
Eurozone sovereign debt crisis, coupled with the Basel
3 standards on capital exposure agreed by the world’s banking establishment
a year ago, mean many airlines and operatorswill have
to look elsewhere.
US airframer Boeing recently said that it expected the global value
of aircraft deliveries in 2012 to top $95bn, rising to $106bn in
2013, up from $77bn this year.
Kostya Zolotusky, managing director at Boeing Capital, the airframer’s
financing arm, said earlier this month that he did not foresee a
funding shortfall in 2012. Capital markets should provide funds of
up to $10bn next year for aircraft purchases - more than double
the $4bn they put up in 2011, he said, accounting for 10% of total
funding. Export credit agency financing, from institutions like the
US Export-Import Bank, should remain steady at 30%, while com-
LATEST LEASING NEWS
Willis Lease Finance closes new and
expanded revolving credit facility for
$345m
Willis Lease Finance Corporation closed a new revolving
credit facility. The $345m credit facility, with
an interest rate equal to LIBOR plus 2.75%, is available
to Willis Lease on a revolving basis for five years
through November 2016. The credit facility is provided
by a syndicate of banks led by Union Bank, N.A.,
as Administrative Agent, Joint Lead Arranger and Sole
Bookrunner, Wells Fargo Bank, National Association
as Syndication Agent, Wells Fargo Securities, LLC as
Joint Lead Arranger, and U.S. Bank, N.A., as Documentation
Agent and Joint Lead Arranger. This credit facility
and other credit facilities support the company and
its subsidiaries in financing its lease portfolio which
stood at $961m as of September 30, 2011.
Jackson Square Aviation closes $265m
credit facility
Jackson Square Aviation (JSA) closed a $265m
secured credit facility, which provides the company
with committed long-term debt capacity. This
facility provides JSA with a vital financing source to
acquire modern, fuel-efficient aircraft for lease to
its airline customers. JSA will finance eight aircraft
currently owned or in its committed pipeline, for
delivery through 2012. The facility is structured and
arranged by Crédit Agricole (the Arranger) and fully
underwritten by the Arranger and Siemens Financial.
This transaction brings JSA’s total committed credit
facility capacity to approximately $900m.
ALC announces proposed offering of
$300m of convertible senior notes
Air Lease Corporation intends to offer $300m aggregate
principal amount of convertible senior notes
due 2018 in an offering exempt from registration under
the Securities Act of 1933, as amended the “Securities
Act”). In connection with this offering, the
Company expects to grant the initial purchasers of
the Notes an option to purchase up to an additional
$45m aggregate principal amount of the Notes. The
Notes will be offered only to qualified institutional
buyers in reliance upon Rule 144A under the Securities
Act. The Notes will pay interest semi-annually
and will be convertible at the option of the holder
into shares of the Company’s Class A common stock.
The Notes will mature on December 1, 2018, unless
earlier repurchased or converted.
DVB Group reports operating performance
during third quarter of 2011
For the third quarter 2011, DVB reported a 21.2%
increase in net interest income after allowance for
credit losses, of €162.1m. At €106.4m, consolidated
mercial bank lending will dip to 21% from
25% this year. Zolotusky expects a quarter
of deliveries will be funded in cash both this
year ($19bn) and next ($24bn).
Some analysts have suggested that aircraft
financing will be significantly more
challenging in years to come, and indeed,
that some airlines could struggle to secure
financing for their mega-orders next year
and beyond.
Kostya Zolotusky
Boeing
But Zolotusky said he was confident that aircraft orders in 2012
would be secure, as airlines seek different sources of financing and
make greater use of leasing companies.
Echoing Boeing’s bullishness, Charles Willis, president and CEO
of Willis Lease, told AviTrader MRO that he believed there will be
additional funding available for all types of companies seeking finance
for aircraft, engines and spares - from Export Credit Agencies
(ECAs), equity / mezzanine fund providers and lessors - including
his own company. Only last month, Willis closed a new $345m
credit facility with a syndicate of US banks to support the financing
of its lease portfolio, which stood at $961m at September 30th.
“I am sure there will be many more of these types of credit agreements
to come,” he added.
net income before taxes decreased by 10.7% year-onyear,
primarily due to volatile net income from financial
instruments in accordance with IAS 39. Total income
(comprising net interest income after allowance for
credit losses, net fee and commission income, net income
from financial instruments in accordance with
IAS 39, results from investments in companies accounted
for using the equity method, and net other
operating income/expenses) declined by 1.8%, from
€241.6m to €237.3m. Net interest income rose by
23.7% year-on-year, to €181.3m, and net interest income
after allowance for credit losses was up 21.2%,
from €133.8m to €162.1m. New Transport Finance
business totalled 109 transactions as at 30 September
2011, with an aggregate volume of €3.3bn (9m
2010: 93 transactions with a volume of €3.0bn).
SAS secures finance lease facility of SEK
500m for four existing A321s
SAS secured a five-year refinancing of four Airbus
321 to a total value of approximately $74m
(SEK500m). Nordea is the Agent and Deutsche
VerkehrsBank AG (DVB) is the Security Trustee in the
transaction. The transaction is part of SAS ongoing
aircraft refinancing program where loans maturing
in 2011/ 2012 are to be renewed. The financing of
two aircraft will close in Q4 and the remaining will
close in Q3 2012 and Q4 2012, respectively.
16
AviTrader MRO - December 2011

Jet Values 2
Whether you require up-to-date lease rates, current or forecast market values or
simply aircraft specifications, Jet Values 2 delivers comprehensive data on over
23,000 commercial aircraft in service.
Jet Values 2 is delivered through an intuitive, user friendly online portal, giving
you true flexibility and ease of use. With monthly aircraft updates, and semi-annual
value updates, you can be sure that the information and opinion provided is
up-to-date. In addition, Jet Values 2 also offers the added functionality of online
access to IBA’s trade publications.
Benefiting from IBA’s market information collected from more than two decades,
Jet Values 2 enables you to search by specific serial number, registration or aircraft
type to determine:
• Current Base and Market Values, and Current Market Lease Rates
• Forecast Base, Market and Soft Values, and Forecast Base Lease Rates
• Full-Life Valuations and detailed Specification Adjustments
• Current and Forecast Portfolio Valuations
• Total User Control over Fleet Management
The system also delivers total flexibility on the model, specification, length of
forecast, inflation parameters, and a choice of Excel or PDF outputs.
“IBA’s JV2 online valuation system is
an exceptional tool for the analysis of
existing and potential aircraft, aircraft
fleet values and for conducting ‘what
if’ scenario analysis. The Excel outputs
are easy to use; the data is constantly
updated; and one is confident that the
values and rates are based on expert
knowledge and common sense.”
Shane Miller
Commonwealth Bank
Call: +44 (0) 1372 224488
marketing@ibagroup.com
www.ibagroup.com
www.jetvalues2.com
IBA Group Ltd IBA House 7 The Crescent
Leatherhead Surrey KT22 8DY United Kingdom

IBA Analysis - The Dubai Airshow
The Dubai Airshow by numbers
The Dubai Airshow broke records left, right and centre with a multitude of new orders
valued at over $63 billion at list prices . Ben Jacques, commercial manager at the International
Bureau of Aviation (IBA) takes a closer look at the numbers
The 2011 Dubai Air Show was another successful show for Airbus, particularly with big orders for the A320 current generation and
A320neo next generation variant, without, however, forgetting the A380 orders which will be well received in Toulouse. Boeing also had
orders for current and next generation aircraft, both 777 and 787 variants. Orders for the 737 MAX were conspicuous by their absence,
although it is expected that Middle Eastern carriers who are evaluating the aircraft at the moment may well place an order in the next
year. Bombardier also had its order book swelled, with a significant order for the C-Series 300 from Atlasjet. After the recent spate of
orders from leasing companies, it is noteworthy that on this occasion only Aviation Capital Group had signed on the dotted line during
Dubai. A quick look at their portfolio reveals that it could well be with a view to replacing their existing operators’ A320s with A320neos
during the next decade as quite a number of these carriers will have aircraft older than 15 years during this time.
140
120
100
80
60
40
20
0
A320NEO firm
14000
12000
10000
8000
6000
4000
2000
0
A320NEO firm
The IBA is an independent aviation consulting firm based in Leatherhead, UK, with representation worldwide.
For more information, contact Owen Geach: owen.geach@ibagroup.com; T: +44 (0) 1372 224 488; M: + 44 (0) 7917 648 712
A320NEO option
A320NEO option
A320 option
A320 option
A380 firm
Dubai Airshow orders by order volume
A380 option
ACJ321
B777‐300ER
B777 options
B777F
B787‐8
C‐Series
C‐Series Options
Dubai Airshow orders by order value ($m) (at list price)
A380 firm
A380 option
ACJ321
B777‐300ER
B777 options
B777F
B787‐8
C‐Series 300
C‐Series 300 Options
ALAFCO
Atlasjet
ACG
Oman Air
Emirates
Comlux
Spirit
18
Qatar Airways
ALAFCO
Atlasjet
ACG
Oman Air
Emirates
Comlux
Spirit
Qatar Airways
AviTrader MRO - December 2011

News in Brief
TP Aerospace wins seven-year Wheels &
Brakes deal from Atlantic Airways
Atlantic Airways, the national airline of the Faroe Islands,
selected TP Aerospace Leasing for a seven-year
full service Wheels & Brakes Cycle Flat Rate (CFR)
Program. TP Aerospace will provide Component Maintenance,
Pool Access, Onsite Lease Inventory and Logistics
Program in support of Atlantic Airways’ most
significant fleet expansion to date.
Monarch Aircraft Engineering to provide
SMART support to Titan Airways
Monarch Aircraft Engineering extended its agreement
with Titan Airways to provide a world wide support
structure for the use of its SMART team (Specialised
Monarch AOG Response Team). Under the terms of the
agreement Monarch Aircraft Engineering will provide
Titan Airways with a team of specialised engineers which
are available 24/7 and can be deployed worldwide. The
SMART team will support the entire Titan Airways fleet
and can be activated within two hours to manage any
AOG requirements.
Aircraft Services
Designed for aircraft repair stations, MRO
facilities and full service FBOs. Includes
an integrated approach to Quoting, Work
Package Generation, Job Card Management,
Labor Recording, Consumables Management,
Rotable Exchanges, Shop & Vendor Services,
Cost & Profit Management, and Invoicing.
Hangar Management
Allows for complete maintenance and
resource management across an
individual or entire fleet of aircraft. The module
is completely integrated with Quantum's entire
software suite and adds the capability to track
flight history, maintenance history, upcoming
maintenance events, on-going work orders,
available resources and due-lists for technicians
on the hangar floor.
Forms Designer
The Forms Designer in Quantum Control
is a powerful and flexible tool that
allows our standard forms to be customized or
enhanced to meet any customers needs.
AVREF Catalog Files
The AVREF Catalog System provides the
latest OEM pricing information along with
access to Government MCRL cross reference data.
Warranty Module
Manages the tracking and statusing of
incoming warranty claims from
customers and outgoing claims to vendors.
Includes customer centric warranty claim
request capability.
Rental and Leasing
The Rental and Leasing module has the
versatility required to handle all of your
rental and leasing transactions including
flight-time based billing.
Max-Q
With Max-Q you get Quantum Control
implemented with the latest database
technology from Oracle to provide the ultimate
in database Security, Reliability, Scalability and
Performance.
Virgin Atlantic selects NAT and HAECO for
B747-400 cabin reconfiguration work
Virgin Atlantic Airways entered into agreements with
Northwest Aerospace Technologies and Hong Kong Aircraft
Engineering Company (HAECO) to provide cabin
reconfiguration services for the airline’s Gatwick based
fleet of Boeing 747-400 aircraft. The modifications will
reconfigure Virgin Atlantics’ B747-400 fleet with new
and upgraded passenger seating, a new inflight entertainment
system with connectivity, new monuments,
interior furnishing and décor enhancements.
AELS starts aircraft disassembly at Business
Park Aviolanda
AELS started the disassembly and dismantling of a
Boeing 737-500 at Aviolanda. It’s the first aircraft that is
being recycled by AELS at Woensdrecht Airport, Business
Park Aviolanda. AELS and Aviolanda have signed a
long term agreement to provide this new service at
Woensdrecht airport as part of the “one-stop-shop”
principle. AELS will work in cooperation with Fokker
Services, Aviolanda Business Park and Rewin to develop
MRO & Logistics Software Solutions
Integrated with
Shop Control
Manages the complete Component and
Assembly Repair and Overhaul process.
Includes real-time Cost and Schedule
Management functions that put you in complete
control of your shop’s activity.
Time and Attendance
Accurately manages the collection and
tracking of employee's work time. Shift
patterns can be configured to accommodate
overtime, grace periods and to identify
exceptions that require management attention.
Bar Coding
Prints bar codes and allows for the
scanning of physical inventory to track
and manage stock and account for all parts
when shipping, receiving, etc.
Document Imaging
Allows for the association and storage of
documents or images to almost any
Quantum record including part numbers,
stocklines, quotes, repair orders, repair manuals,
work orders, manufacturing records, and
companies.
Contact Manager
This module provides a tool for sales,
service or support centers to record,
track, status and assign contact activity. Email
list management & broadcasting is also included.
Quantum Portal
Quantum Portal enables our customers to
present Quantum functionality to their
users via a standard web browser. Contains
functional modules for your customers to check
status and shipping information for Sales Orders
and Work Orders out of the box.
Manufacturing
The Manufacturing Module is a powerful,
yet easy to use application that
addresses all aspects of the manufacturing
process including product lines, floor control,
inspections, materials planning, purchasing and
outside servicing. The straightforward processing
allows you to generate orders for stock or
planned customer orders all from one screen.
Lot Costing
Manages lot purchases and assembly
teardowns. Provides total tracking of
acquisition costs, overhaul expenses, component
part sales, profit margins & full traceability.
The StockMarket
Quantum users can search, buy, and sell
parts with other Quantum Users in real
time without leaving the software. Inventory
postings are automatic and can include details
such as serial numbers, images, time life & prices.
Storefront Quantum
The Storefront module is the key to your
web services sales strategy. Customers
can login to your website to search, view, RFQ or
purchase from your existing stock. Your selected
inventory is updated automatically in real-time
all the time so no manual updates are required.
EDI Integration
The EDI Module provides the infrastructure
to deploy a fully-integrated solution
between a Quantum user and his trading
partners, with EDI transactions ranging from
quote to purchase to invoice, and more.
Aeroxchange Integration
Provides users with the ability to receive
and respond to customer part inquiries
using either broadcast and/or quote requests.
These requests are generated directly from
Aeroxchange's Airline customers, through their
AeroBuy module working in concert with
Component Control's StockMarket.
Integrated Accounting
The Accounting Module includes General
Ledger, Accounts Receivable, Accounts
Payable, and more - all integrated with Sales,
Purchasing, Repair, Exchange, Work Order and
Invoicing modules.
Fixed Asset
Tracks and depreciates assets, flagging
master parts inside traditional master
part and stock tables. Enables users to flag
master parts for depreciation and tracking, and
modify transactions such as how the asset is
sold, issued to a job or scrapped.
QuickBooks Accounting Bridge
The QuickBooks Accounting Bridge
Module is for customers that prefer
QuickBooks accounting. Relevant data is sent
through the 'bridge' directly to QuickBooks.
Remote Inventory
Accommodates supply chain practices
where the inventory is managed
'remotely' by either the vendor or the customer.
Planning is based on the customer's expected
demand and on previously agreed minimum and
maximum inventory levels.
Shipping Manager
Manages the shipping and order
consolidation process to include user
defined stages and statuses. Creates custom
invoices, packing slips and certification forms
within one shipment. The Starship option
provides integration to UPS, FedEx, & USPS for
automatic shipping labels and rate calculations.
Event Manager & Report Scheduler
Allows for the automated reporting,
emailing and faxing to customers,
suppliers as well as internal users. Email
notifications and reports can be created using
pre-packaged scripts, e.g. shipping notifications
for items leaving the warehouse, or custom
designed to fit your business.
Component Control 619.696.5400 · info@componentcontrol.com · 1731 Kettner Blvd. San Diego, Ca 92101
19
this service further. The new agreement will provide
aircraft owners of aircraft with a size up to Airbus A320
family and Boeing 737 series with a perfect location for
their (older) aircraft.
SAS orders new seats for short-haul fleet
Scandinavian Airlines ordered new seats for its shorthaul
fleet. The next generation seats from Recaro offer
improved comfort for customers, who get additional leg
room, whilst the lightweight seats weigh less and are
thereby better for the environment. During 2012, eight
Boeing 737-800 aircraft will be refitted with the new
seats, a total of 1,484 seats, and SAS thereafter plans to
install the seats on further aircraft the following year.
Taikoo Spirit AeroSystems to overhaul GE90
thrust reversers for Spirit AeroSystems
Taikoo Spirit AeroSystems Composite, the composite
joint venture between HAECO and Spirit AeroSystems,
received two GE90 (Boeing 777) thrust reversers
from Spirit AeroSystems, Wichita, US. The two thrust
reversers will be overhauled according to CMM and all

News in Brief 20
applicable SB’s will be accomplished. Upon completion,
they will be used to secure business specifically in the
Asia Pacific region. Taikoo Spirit offers extensive repairs
on various configurations of the GE90 thrust reverser,
under an umbrella of approvals.
TALSCO acquires ship set of Boeing 777-
200 landing gears
Xaikoo (Xiamen) Landing Gear Services in Xiamen,
China, acquired a ship set of Boeing 777-200 landing
gears. These gears will be available to support the
global market on Boeing 777 in either an exchange or
lease programme.
Monarch Aircraft Engineering signs
maintenance deal with Jet2.com
Monarch Aircraft Engineering (MAE) signed a line
maintenance technical handling agreement with Jet2.
com. The agreement will see MAE to provide line
maintenance support for Jet2.coms fleet of Boeing 737
and Boeing 757 aircraft across a number of Spanish
airports, including Arrecife, Alicante, Malaga and
Tenerife South.
LC Busre from Peru signs ABACUS
contract with Fokker Services for Dash 8
turboprops
Fokker Services reported that LC Busre, a regional
airline based out of Lima Peru, has entered into a five
year ABACUS program for its fleet of three Dash 8-200
aircraft. This program is part of the Strategic Alliance
between Fokker Services and Bombardier and aims to
further expand and improve the support of the Dash
8/Q-Series 100/200/300 aircraft. Under the ABACUS
agreement, Fokker Services will provide a comprehensive
Component Support Program for LC Busre’s Dash 8-200
MANUFACTURING NEWS
ATI signs long-term agreement with
Goodrich Corporation
Allegheny Technologies Incorporated signed a long-term
sourcing agreement with Goodrich for the supply of
aerospace forgings used for landing gear components.
The agreement covers aerospace structural forgings
sold to Goodrich’s Landing Gear facilities located in the
US, Canada, and Poland by ATI Ladish’s ZKM Forging
operation for the period 2012 through 2015. ATI Ladish
is an operating unit of Allegheny Technologies. This
agreement includes forgings for commercial, regional,
and business aircraft.
Spirit AeroSystems completes 1,000th
Boeing 777 forward fuselage section
Spirit AeroSystems announced the completion of the
1,000th Boeing 777 forward fuselage section. The
777 forward fuselage is built in five major assemblies
at Spirit’s Wichita, Kan. , facility. The assemblies are
loaded onto rail cars and shipped to Boeing for final
assembly. The majority of the aluminum alloy section
is designed in CATIA computer software by Spirit and
IFEs & CONNECTIVITY
• Inmarsat, a provider of global mobile satellite communications services, announced the selection of Gogo
as its partner to bring Inmarsat’s Global Xpress satellite service to the commercial airline market. Gogo will
be a service provider, distributing Global Xpress service to the global commercial aviation market. Inmarsat
has also selected Gogo’s business aviation subsidiary, Aircell, as a distribution partner for the business and
government aviation markets. Working with Inmarsat, Gogo will begin in-flight testing of the Global Xpress
aeronautical services after the launch of the first Inmarsat-5 satellite, which is scheduled for mid-2013. Gogo
plans to offer regional service in 2013 with services for air transport, business aviation and government customers
expected worldwide later in 2014.
• Aircell, a provider of in-flight connectivity for business aviation, reported that Travel Management
Company is installing Gogo Biz high-speed Internet service on all mid-size aircraft in its growing fleet of
charter aircraft. Installations are already underway and are scheduled for completion in the spring of 2012. The
announcement includes 21 firm orders plus options for as many as 30 systems for deployment on additional
aircraft. Gogo Biz enables passengers and flight crews to enjoy high-speed Internet capabilities above 10,000
feet in the continental U.S. and portions of Alaska, using their own Wi-Fi enabled laptops, tablets, EFBs,
smartphones and other mobile devices.
turboprops. The services include lease, forward exchange,
re-conditioning and reliability monitoring services,
covering all major line replaceable units.
airberlin technik provides servicing to
Emirates’ A380 in Munich
With the first flight of the Emirates Airbus A380 from
Dubai to Munich, airberlin technik expands its range of
capability to include the double-deck aircraft. In future,
the EASA Part 145 certified maintenance company will
perform the transit check every day, while the aircraft
is on the ground at the Bavarian capital city. At the
Munich location, airberlin technik runs a hangar with
12,000 m² of floor area, with space for up to six narrowbody
aircraft or three wide-body aircraft, along with
employing 270 staff. airberlin technik already provides
complete line maintenance to Emirates in Germany at
Boeing engineers. Spirit AeroSystems also supplies the
forward fairing, strut, thrust reverser assembly, inlet
and fan cowl assemblies, floor beams, seat tracks,
leading edge slats and fixed leading edge for the 777
family of airplanes. The 1,000th 777 is scheduled to
be completed by Boeing in February and delivered to
customer Emirates in March.
Boeing intends to locate 737 MAX
production in Puget Sound
Boeing intends to build the new 737 MAX in Renton,
Wash., following the approval of an early contract
extension with the International Association of
Machinists & Aerospace Workers (IAM), the union
representing hourly employees in Washington,
Oregon and Kansas. Boeing has assessed the
business case for locating production of the 737
MAX in Renton in light of the economics of a
proposed new labor agreement, and the company is
prepared to locate 737 MAX production in Renton
provided the economics contained in that proposal
are achieved. Upon ratification of such an agreement
by hourly employees, Boeing says it will make the
Düsseldorf, Hamburg, Frankfurt and also Munich. This
includes maintenance contracts for the aircraft types
Airbus A330, A340, A380 and also Boeing 777.
Pegasus Airlines signs aircraft maintenance
deal with Turkish Technic
Pegasus Airlines signed base maintenance services
agreements with Turkish Technic for four Boeing 737-
800 C-Check. Maintenance will be carried out within
the fourth quarter of 2011 and first quarter of 2012.
Smartlynx Airlines signs maintenance and
paint deal with Turkish Technic
Smartlynx Airlines signed a base maintenance services
agreement and a paint contract with Turkish Technic, for
one C check on an Airbus A320.
necessary investment to produce Next-Generation
737s and 737 MAXs in its existing Renton facility.
Airbus starts making wings for first A350
XWB
Assembly of the 32m long carbon fibre wings for the
first A350 XWB (MSN1) has started at Airbus’ recently
opened “North Factory” in Broughton, UK. Most of
the A350 XWB wing is made of light-weight carbon
composites, including the upper and lower wing
covers, stringers, front and rear spars. The advanced
structural designs combined with superior wing
aerodynamics are both significant contributors to the
25% fuel saving performance of the aircraft.
Pre-assembly of ribs, upper and lower covers and
fixed leading and trailing edges, has already taken
place. These components will be moved into the main
assembly jigs for full wing box integration. The ribs are
produced by Korean Aerospace Industries in Korea.
The upper and lower covers come from Airbus plants
in Stade and Illescas respectively. In addition, Airbus
extended enterprise partners, Spirit and GKN provide
the fixed leading and trailing edges.
AviTrader MRO - December 2011

News in Brief
SELECTED FINANCIAL NEWS
Avia Solutions Group AB sold Estonian charter operations
Avia Solutions Group AB transferred its entire controlling package of shares (95.5%) in Small Planet Airlines
AS (Estonia) to Brova Air OU. Following the transaction the name of the company will be changed to North
Wind Airlines AS. According to Linas Dovydenas, CEO of Avia Solutions Group, the company is focused on
becoming one of the ten largest charter flight providers in Europe; therefore Small Planet Airlines, operating
offices in Lithuania, Italy, Great Britain, France and Poland is currently increasing its capabilities in these particular
markets. The latter is expected to become the largest Small Planet Airlines served market next year.
AAR completes acquisition of Telair International and Nordisk Aviation
AAR CORP. has completed the acquisition of Telair International GmbH (Telair) and Nordisk Aviation Products,
AS (Nordisk) from Teleflex Incorporated, which the Company announced on October 21, 2011. “This acquisition
significantly adds to AAR’s commercial manufacturing business and elevates our position as a tier-1
provider to the global aerospace market,” said David P. Storch , Chairman and Chief Executive Officer of AAR
CORP. “We will work closely with the teams at Telair and Nordisk to ensure a smooth transition as we support
our expanding customer base and capitalize on new commercial aircraft build cycles.”
The businesses will operate as part of AAR’s Structures and Systems segment. The combination of Telair and
AAR Cargo Systems creates a formidable market leader in the design, production and servicing of aircraft
cargo systems for both commercial and military platforms.
Bombardier reports increased net income for 3rd quarter
Bombardier reported its financial results for the third quarter ended October 31, 2011. Revenues increased
to $4.6bn, compared to $4bn last fiscal year. Earnings before financing income, financing expense and income
taxes (EBIT) totaled $301m, compared to $250m last fiscal year, while the EBIT margin reached 6.5%,
compared to 6.3% last year. Net income amounted to $192m for the third quarter ended October 31, 2011,
compared to $147m for the same period last fiscal year. Free cash flow (cash flows from operating activities
less net additions to property, plant and equipment and intangible assets) usage totaled $346m for the third
quarter, compared to a usage of $108m for the same period last fiscal year. The cash position amounted
to $2.7bn as at October 31, 2011, a level similar to last year, compared to $4.2bn as at January 31, 2011.
The overall backlog stood at a strong $55.3bn as at October 31, 2011, compared to $52.7bn as at January
31, 2011
Israel Aerospace Industries’ sales reach $817m for Q3 2011
IAI’s sales reached $817m in the 3rd quarter of 2011, a growth of 18% compared with the same quarter in
2010. Back orders reached $9bn, at the same level as the preceding quarters. 83% of the back orders are
earmarked for export. IAI reported a $59m profit from ordinary acivities and net profit of $3m compared to
$25m in 2010.
Finmeccanica heads for loss
Finmeccanica revised its earnings forecast downwards for 2011, predicting pre-tax losses of €200m,
and said it would sell off close to €1bn in assets with a view to cutting net debt of €4.7bn. Shares in
the company plummeted 20% on the news and are down 84% since their 2007 peak. The unprofitable
aeronautics division, Alenia, posted a nine-month charge of €753m over problems relating to its contract
with Boeing to supply components for the 787-8.
SELECTED TRANSACTIONS
• Avia Solutions Group, a group of business aviation companies, together with its
subsidiary FL Technics, is to open its first representative office in Kuala Lumpur
by the end of this year, to jointly cater for the rapidly developing Asia-Pacific region.
• Volvo is to sell its aircraft engine component manufacturing business Volvo
Aero after incoming chief executive Olof Persson made it clear that the unit is not
core to the company. Volvo Aero’s sales accounted for just over 1% of total group
sales in the third quarter; its revenues fell by 22% in the same period to SEK1.4bn
($206m), while operating income decreased by 55% to SEK102m. MTU was cited
as ‘the most likely buyer’.
• MTU Aero Engines acquired 75% share in the Dallas, Texas-based facility for-
merly known as Retan Aerospace, which will now be known as MTU Maintenance
Dallas Inc. MTU Maintenance Dallas is an FAA and EASA licensed Part 145 repair
station that specializes in engine on-wing maintenance and repair as well as airframe
A, B and C checks. The large portfolio of engine capabilities includes the CF34,
CFM56, V2500, CF6, GE90, JT8D, PW2000, PW4000 and RB211.
• MTU Aero Engines opened a new sales office in Seoul in South Korea on November
18th. The MTU Aero Engines Seoul Representative Office is managed by
Kyoo Joo Chae.
21
Yakutia Airlines signed maintenance
contracts with Turkish Technic for B737-800
Turkish Technic signed a C Check maintenance service
agreement with YAKUTIA AIRLINES, which will cover one
base maintenance C check on a Boeing 737-800 and a
painting service agreement, which covers one B737-800
tail painting activity. Maintenance works will be carried
out during November & December 2011.
Lufthansa Technik AERO Alzey to provide
PW150A spare engine support for Air
Berlin
Air Berlin and Lufthansa Technik AERO Alzey (LTAA) have
signed a multi-year Spare Engine Pool Agreement to
support Air Berlin’s regional fleet of PW150A powered
Dash8-Q400 aircraft operated by Luftfahrtgesellschaft
Walter (LGW). As per the terms of the agreement, LTAA
will provide spare engines for planned and unplanned
engine removals.
Flying Colours confirms first modification
under new Blackhawk agreement
Flying Colours, the Peterborough-Canada based global
aviation service company, announced its first turboprop
Blackhawk modification project. January 2012 will see
the arrival of a privately owned King Air C90 at the Peterborough
facilities where it will undergo a full XP 135 engine
conversion. The scope of the work will also feature
additional routine maintenance inspections along with
interior modifications.
Spare Solution Support India signs
component maintenance agreement with
Turkish Technic
Spare Solution Support India (SSSI) signed component
maintenance agreements with Turkish Technic for the
repair of Airbus A320 family components. Component
maintenances will be carried out at Turkish Technic’s
facilities in Istanbul, servicing more than 10.000
different part numbers.
Aviointeriors delivers TRANSAERO’s first
B777
Aviointeriors delivered TRANSAERO’s 1st B777 equipped
with their glamourous Imperial First Class, Business,
Premium Economy and Economy class seats, after only
seven months. TRANSAERO’s excecutive director, Alex
AviTrader MRO - December 2011

News in Brief
Krinichanskiy, commented: “I am extremely satisfied
with Aviointeriors’ performances given the challenging
A/C ODD”. Aviointeriors will shortly complete an on-site
unit in Moscow, available 24/7 to guarantee a first class
product support.
EADS EFW receives five additional conversions
from EAT/DHL
DHL placed an additional order for five A300-600 P2F
with EFW, a global market leader in wide-body freighter
conversions. These five aircraft are former JAL aircraft. In
total EFW will now have 18 P2F for DHL under contract.
EFW handed over the first A300-600 aircraft out of the
18 ordered conversions to EAT/DHL at the EAT/DHL facility
in Leipzig/ Germany on November 15th.
John Holland Aviation Services selected as
Boeing GoldCare service provider
Boeing Commercial Airplanes selected John Holland Aviation
Services (JHAS) in Melbourne, Victoria, Australia to
provide Boeing GoldCare maintenance, repair and overhaul
(MRO) services for the region. The GoldCare program
designed by Boeing is a total care engineering and
maintenance service to airline operators providing fully
integrated maintenance solutions. As a partner in Boeing
GoldCare, John Holland Aviation Services will provide
line, base and heavy maintenance services as part of the
fleet management maintenance services program for the
Next Generation 737 and 787 Dreamliner aircrafts.
Boeing 787 Dreamliner completes change
incorporation in San Antonio
The first Boeing 787 Dreamliner to undergo change incorporation
work in San Antonio, Texas, returned to Everett
on Nov. 13th. The airplane completed an eight month
change incorporation program and will now go through
final preparations in Everett before delivery to Japan Airlines
(JAL). During change incorporation, airplanes that
are not part of flight test are configured to conform to
the standards established by the type certification. Some
of the work done in San Antonio includes installing electronic
and mechanical equipment, completing software
upgrades, testing functional systems, and removing and
reworking wiring or equipment that needs to be updated
INFORMATION TECHNOLOGY
• Flight Power Repair Group, an FAA/EASA certified repair facility for the Pratt
& Whitney JT8D engine line, selected Quantum Control to manage its specialized
repair facility in Doral, Florida, whose services include the overhaul of Disks (LLP’s),
Spacers, Stators, Cases, Housings, Tubes and Ducts. Flight Power Repair Group is
leveraging Quantum to automate all repair shop and materials management operations,
ensuring best practices across their business.
• ADSoftware announced that Air Botswana signed with ADSoftware to implement
AirPack Fleet Management System and Logistics Solutions comprising
Airtime (Fleet management- CAMO), AirStock (Inventory control - Logistic), AirDoc
(Documentation management), AirUser (Security management) and Airstat (Reliability
and statistic reports).
• Swiss AviationSoftware announced that Finnair Technical Services
completed the project definition phase and will now procede to implementation of
AMOS software, which will replace the company’s current mainframe legacy ERP
APPROVALS,CERTIFICATION & QUALIFICATION
• AkzoNobel Aerospace Coatings announced qualification at Airbus of their Aerobase base coat/clear coat
system. The Aerobase base coat and Aviox clear coat UVR system was qualified successfully at Airbus, according
to specification AIMS 04.04.033 and AIMS 04.04.037. In addition to the standard AIMS 04.04.033 base coat/
clear coat system specification, AIMS 04.04.037 includes a selectively removable system (SRS).
• The GEnx-1B Engine, which will power the Boeing 787 aircraft, received U.S. FAA 330-minute extendedrange,
twin-engine operations (ETOPS) approval to 14 CFR Part 33.201. The GEnx-1B engine completed all
requirements to achieve 330-minute ETOPS, including a demanding 3,000-cycle ground endurance test in April.
The FAA approval confirms the engine demonstrated the required reliability to conduct ETOPS operations up
to 330 minutes flying time from a primary or alternate airport. ETOPS approval provides airlines much greater
route-scheduling flexibility as it allows twin-engine aircraft to service routes traditionally reserved for three- and
four-engine aircraft.
• Gulfstream G650 received its provisional type certificate (PTC) from the Federal Aviation Administration. This
clears the way for the company to begin interior completions of the ultra-large-cabin, ultra-long-range business
jet in preparation for customer deliveries in the second quarter of 2012, as originally planned.
• Aviation Partners (API) confirmed that Transport Canada granted Canadian Supplemental Type Certificate
(STC) approval for its High Mach Blended Winglets on the Falcon 900 Series. FAA STC was received in September
and EASA approval is expected imminently.
• A J Walter Aviation was awarded Aeronautical Parts & Components Supplier Approval by the General Civil
Aviation Authority in accordance with the UAE Civil Aviation Rules and Regulations. GCAA is the sole authority
for the control and regulation of civil aviation in the UAE and is responsible for the provision of en-route air
navigation services and all aspects of flight safety.
• TAM MRO, TAM’s maintenance unit located close to São Paulo, renewed its certificate to provide airframe and
component services on aircraft registered in Bermuda. The new authorization from the Bermuda Department of Civil
Aviation is valid until March 2013. The certification authorizes TAM MRO to provide MRO services to more than 700
airplane components and to Boeing B767, Airbus A318, A319, A320, A321 and A330 aircraft registered in Bermuda.
TAM’s maintenance unit first received the authorization from the island’s aviation authority in March 2011.
• Chromalloy received the company’s third Approved Organization Exposition certificate from the Japan Civil
Aviation Bureau (JCAB). The certificate was awarded to Chromalloy’s San Antonio, Texas, repair station following
a rigorous audit by JCAB and determination of operational capabilities to provide repair services on various
components in turbine engines powering Japanese commercial aircraft. Earlier this year, two other Chromalloy
engine repair service centers in the U.S. – in Phoenix, Arizona, and Carson City, Nevada – received AOE
authorization from the JCAB.
to current configuration requirements. The work will be
performed through 2013.
Alcoa, Embraer sign technology sharing
agreement
Embraer and Alcoa signed a new technology sharing
agreement that will utilize Alcoa’s proprietary
system. Finnair Technical Services will also interface its existing aircraft e-TechLog
advanced system with AMOS and adhere to a wholly-integrated Spec2000
ordering process fully supported by AMOS. The new AMOS Onboard Loabable
Software configuration control programs will enable the company to support the
approaching delivery of the A350.
• Component Control announced Hansair Logistics Group, a global supplier
of aircraft parts and materials, is leveraging Quantum Control to manage
its three global aviation supply businesses: Hansair Logistics, Inc., Hansair Engine
Group and Hypercoat Enterprises PTE Ltd. The trio of companies distribute both
consumable and expendable aviation products through its network of 19 offices
and warehouses around the world, to support all of the major airlines and several
regional carriers. Hansair is leveraging Component Control’s MRO and Logistics
software solution, Quantum Control, to manage sales, inventory management and
tracking, business reporting and accounting across its entire enterprise.
22
aluminum alloys, advanced design and manufacturing
techniques, and its fastener technologies to support
Embraer’s development of new high-performance
metallic fuselage and wing solutions for its family of
aircraft. Alcoa is a supplier of aluminum sheet, plate,
extrusions and forgings, and fasteners to Embraer and
the aerospace industry.
AviTrader MRO - December 2011

Industry People on the Move 23
AFTERMARKET AGREEMENTS
Singapore Airlines expands GE’s OnPoint
Solution deal on GE90 engines
Singapore Airlines expanded its 10-year OnPointSM
solution agreement for engine maintenance, repair
and overhaul to include its new GE90-115B engines
that power its eight additional Boeing 777-300ER
aircraft. The agreement on the newly added engines
is valued at more than $300m over the life of the
agreement.
SIA Engineering Company secures sixyear
contract from Airbus
SIA Engineering Company (SIAEC) signed a Tailored
Support Package (TSP) contract with Airbus to
maintain Singapore Airlines’ additional fleet of 15
A330-300 aircraft being acquired from Airbus. SIAEC
is a member of the Airbus Maintenance, Repair &
Overhaul (MRO) Network established in 2005. Under
the contract, SIAEC will provide a wide range of MRO
services, including transit and light maintenance
checks, defect rectification, cabin maintenance,
fleet management and heavy maintenance checks
at SIAEC’s facilities in Singapore. SIA will receive
delivery of the A330-300 from 2013.
Cathay Pacific Airways signs OnPoint
Solution deal on GE90 engines
Cathay Pacific Airways signed a 15-year OnPoint
solution agreement with GE Aviation that covers
the maintenance, repair and overhaul of the GE90-
115B engine fleet for four Boeing 777-300ER
aircraft and eight 777-200 Freighters ordered in
August along with the 10 Boeing 777-300ER aircraft
ordered in March. The OnPoint solution agreement
means that GE Aviation will provide engine MRO
services for Cathay Pacific’s entire fleet of 58 GE90powered
Boeing 777 aircraft. GE plans to use
Taikoo Engine Services (Xiamen) Company Limited
(TEXL), an affiliate of HAECO, to perform much of
the maintenance under this agreement. TEXL can
perform full overhaul and engine test services on
GE90 engines. The company recently expanded the
facility with a new two-story, 17,500m² building
where it will perform module strip and build and
component repair.
Cargolux signs 15-Year OnPoint solution
agreement on GEnx fleet
Cargolux signed a 15-year OnPoint solution
agreement with GE Aviation for the maintenance,
repair and overhaul of its GEnx-2B engines that
power its Boeing 747-8 freighters. The agreement
will cover 52 GEnx-2B engines that power its 13
Boeing 747-8 Freighter, and it is valued at more
than $1bn over the life of the agreement. Cargolux
has also been granted TRUEngine status for its
GEnx-2B engine, launching the program on this
engine model. With the TRUEngine designation,
Cargolux has agreed to follow the GE-issued engine
manual, service bulletins and other maintenance
recommendations on its GEnx engine fleet.
American Airlines announced
the retirements of two company
officers, as well as a series
of changes to the company’s
global leadership team: Robert
W . Reding, executive
vice [resident – Operations,
will retire Dec. 31, James B .
Ream is named senior vice
president – Operations, assuming
additional responsibility for
James Ream
AMR
Flight Operations, Operations Planning & Performance,
Operations Finance & Planning, and the Safety, Security
and Environmental Departments, in addition to his
current role overseeing Maintenance & Engineering
(M&E), Mark L . Burdette, vice president – Employee
Relations, will retire Dec. 31 and Denise Lynn,
currently vice president, Flight Service, will move to the
role of vice president – Employee Relations. Monte
Ford, senior vice president and chief information
officer (CIO), has resigned effective Dec. 31, Maya
Leibman, currently pesident of the AAdvantage Loyalty
Program, is promoted to senior vice president and
CIO and Beverly Goulet is named chief restructuring
officer, in addition to her continuing role as vice
president– Corporate Development and Treasurer.
Aveos announced that it has tapped seasoned
aviation industry leaders –Tim Canavan,
Shannon Wagner, Paul Lochab, Mike
New and Bob Madigan – to join its executive
team. Canavan, senior vice president, Maintenance
Operations, has overall responsibility for ensuring
the global competitiveness of the airframe business.
Wagner, vice president and general manager,
Component Solutions, will have overall responsibility
for the Component Solutions business unit.
Lochab, Aveos’ new chief commercial officer (CCO)
will be responsible for all customer-facing activities
and for leading the organization’s marketing and
sales functions. New took over as vice president,
Corporate Quality and Technical Services and
Madigan, vice president and general manager,
Engine Solutions, will be responsible for the overall
performance of the Engine Solutions operations.
Honeywell announced Briand Greer’s appointment
as president of Aerospace Asia Pacific, effective immediately.
Greer is based in Shanghai and will report to Tim
Mahoney, president and CEO of Honeywell Aerospace.
Greer succeeds Mark Howes, who will be returning
to Phoenix, Arizona, to continue a role within the Aerospace
Leadership Team.
Greg Mays joined Alaska Airlines as managing director
of airframe, engine and component MRO. Mays will
manage heavy airframe maintenance and its oversight
process as well as engine and component heavy maintenance
for the airline.
Effective 01 October 2011, Holger Beck, previously
chief operating officer of Lufthansa Technical Training, is
now heading the Marketing, Sales & Product Management
division in his function as chief commercial officer.
karsten Schmidt has been appointed chief operating
officer of Lufthansa Technical Training on 14 November
2011. Before, he worked as managing director of
Lufthansa Systems Aeronautics.
Aircastle Advisor (International), an affiliate of Aircastle
Limited, appointed Owen Roberts as managing director
– Singapore and executive vice president – Marketing,
Asia.
Bombardier Aerospace promoted Raphael Haddad
to the position of vice president, Sales, Middle East and
Africa, Bombardier Commercial Aircraft and Torbjorn
(Toby) karlsson as vice president, Sales, Asia-Pacific,
Bombardier Commercial Aircraft. Stephen young was
appointed to the position of vice president, Sales, Aircraft
Leasing Companies Bombardier Commercial Aircraft.
Spairliners, a Joint Venture between
Air France and Lufthansa
Technik, appointed Olivier
Mazzucchelli as CEO and
managing director. Mazzucchelli
will co-helm Spairliners
alongside André Schulte-Bisping.
With the new management
board thecompany continues to
provide a high standard component
service customized for
A380 operators.
Olivier Mazzucchelli
LHT
Jacques Bernardi was appointed executive vicepresident
Component services of Sabena technics Group.
He will be responsible for ensuring that all Component
services customer commitments are respected, by improving
turn around times and prices through optimized
processes, and will also be in charge of developing Sabena
technics’ component repair capability.
Christoph Meyerrose, who has been the managing
director of Lufthansa Technical Training in Hamburg
for over 10 years, is set to become the new managing director
of Lufthansa Bombardier Aviation Services (LBAS)
in Schönefeld, Berlin. The present managing director of
LBAS, Andreas kaden, who has held this position
for 13 years, will be taking over at the helm of Lufthansa
Technical Training (LTT) in Hamburg.
East Midlands-based composites manufacturer Atlas
Composites boosted its project engineering team with
the appointment of a new project engineer. Alan
Cokayne, who joins Atlas Composites from Heanor
based Advanced Composites, brings with him a wealth
of experience with over 26 years in the composites industry
in a variety of senior engineering and management
roles.
Boeing named Stephanie Pope vice president, Investor
Relations, effective Feb. 1st, 2012. Pope will take
over from Scott Fitterer, who will assume the role of
vice president, Financial Planning & Analysis. Both will
report to Greg Smith, who was recently announced
as Boeing’s next chief financial officer, effective Feb. 1st.
AviTrader MRO - December 2011