BAE Systems Regional Aircraft helping to maintain aircraft value

BAE Systems Regional Aircraft’s engineering and support business is continuing to pick up contracts and moving away from dependence on work from its parent company, reported Sean McGovern, business director support at the company’s annual press briefing in London.

In 2010, the company had a 65% dependency on BAE Systems contracts, with total contracts that year being worth around £12 million. “Now it’s only 10% and we have engineering service contracts with four new OEM customers, and there should be some major stories breaking soon.” McGovern reported. The 10% BAE Systems share this year will be out of expected total revenues approaching £15 million.

Regional Aircraft, of course, no longer includes the asset management business which was sold to Falko in mid-2011. However, the company continues to provide engineering support to the fleet which transferred to Falko’s portfolio. “We have a contract with Falko that would choke a horse for long-terms support of their fleet,” McGovern quipped.

With asset management gone, Regional Aircraft’s strategy, according to McGovern, is to simply offer competitive solutions to compete in the global market. “We’re finding ways of providing local solutions to regional customers. It makes customers feel that we’re just around the corner rather than 8,000 miles away. And focussing on the supply chain helps to ensure the stability of contracts, both in terms of costs and delivery so there are no surprises for the customer.”

On the company’s rate-per-flying-hour (RPFH) programmes the company has 20 years’ experience including 3 million hours of operation. McGovern announced $30 million worth of new deals.

The first is a five-year 20 aircraft Jetspares 2020 deal with Swiss International Airlines covering all the RJs in the Swiss fleet and including the extension of the Jetspares 2020 programme to more than 450 rotable components. “The contract calls for Swiss aircraft to be working as reliably and efficiently as possible, so this is not simply a parts exchange programme, it’s about working technically with Swiss too,” noted McGovern.

On the turboprop side, Regional Aircraft signed a three-year 44 ATP Macro agreement with West Atlantic Group. This cover three configurations of the aircraft, some for passenger, some bulk freight and some featuring the large freight door.

In South Africa, Airlink is extending Jetspares and Macro deals by two years on eight RJ85s and 14 J41s respectively.

Eznis Airways of Mongolia has already signed a Jetspares deal for the RJs in its fleet. Moving on from that, McGovern reported that one of the airline’s RJs has been modified with new protection kits for the sharp gravel runways and rough fields into which the carrier flies.

For Regional Aircraft’s spares business, the company has agreed with Kuehne + Nagel to use a facility in Miami to serve North and South America. “I strongly believe that if you put stock near the customers then they are more likely to use it than look elsewhere,” McGovern emphasised.

Planning ahead for a busy time in London during the third quarter when the Olympic Games will be taking place not far from London City Airport, Regional Aircraft has decided that getting stock from its Weybridge facility during that time may prove too difficult, so stock is being placed at a facility near LCY owned by a major Avro RJ operator from the airport, CityJet. The company is also prepared to commit field service and technical support at the airport for the duration of the Olympics.

Also in the spares portfolio, a new “Parts Plus” spares programme is to be introduced which guarantees price and availability on high turnover parts. By the end of 2012, there will be 3,000 parts available under the programme.

In the area of managed solutions, Regional Aircraft has been working with Mitsubishi Heavy Industries on the MRJ, building on established agreements and has now been chosen to supply flight test hardware for flight test programme.

In a bespoke contract, the company is now handling a major repair mandate with Airlink. The airline had an RJ85 nose landing gear failure in November 2011 and Regional Aircraft has taken complete control of the repair of the aircraft.

Looking at other services, McGovern reported that small airlines have been asking Regional Aircraft to do maintenance planning for them. “I would like a generic set of maintenance plans, but many customers want tailored solutions. So I’m not sold on using engineers on all these customisation packages,” he commented. “However, we will be going ahead with a meeting in March to discuss a Low Utilisation Maintenance Programme – including business aviation operators – to see if a generic solution can be designed for them.”

Bernie Baldwin, editor, Low-Fare & Regional Airlines/
London City Airport, UK

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