MRO Operations: Regional Service Centers

On Feb. 8, 2012, the Aeronautical Repair Station Association (ARSA) gave a collective cheer. After years of delays and many short-term extensions, the House and Senate have approved the FAA Modernization & Reform Act (H.R. 658). At last American MRO companies feel that they should be able to compete head on with other international companies for the growing global aircraft maintenance and service business.

International competition, in-sourcing, outsourcing, and protecting American jobs are hot political topics. Whatever your position, most can agree that the global aviation industry is interconnected and very competitive. Entrepreneurs and business owners will always follow the money and aircraft sales of and service for commercial passenger and business aircraft in the Asia-Pacific markets are strong and growing.

Bombardier is one of the international companies that has been developing facilities and competing for aviation services business in Asia-Pacific and other global markets. As in any game or business it is always a good strategy to know where new opportunities lie and the strengths of your competition, especially the leaders.

OEM-owned regional service “hubs”

The economies of China, India and Brazil are growing nicely and the United States is rebounding, albeit slowly. Mr. Éric Martel, president, Bombardier Customer Services & Specialized and Amphibious Aircraft, predicts that by “2030, there could be more than 1,100 business jets in service in the Asia-Pacific region and we expect a large share of their owners and operators will be Bombardier customers. We are ready and committed to supporting our existing and future customers in the Asia-Pacific region by ensuring they have access to the full range of support and services in their own time zone and in their own region. It is a reflection of our commitment to current and future operators that no matter where they fly, they will have our service.”

On Feb. 15, “Bombardier Aerospace announced that it will open a full-scale company-owned and operated service center in Singapore in 2013. The new facility will be its second fully owned and operated service center outside of North America, bringing the total number to 10 worldwide. It will be capable of performing a variety of light to heavy maintenance tasks on all Bombardier Learjet, Challenger, and Global aircraft.”

The Singapore Regional Support Office (RSO), opened in late 2011, will work in conjunction with the new service center location as well as the company's current Singapore parts depot. Together with other facilities based in the Asia-Pacific region, this will create a full-service customer support hub in the region to complement existing regional networks in North America and Europe.

Bombardier is developing and operating three of these global hubs. They are organized by geographical zones, Zone One hub serves North and South America customers; Zone Two hub is anchored in Amsterdam at Schiphol Airport and, with the support of regional support offices (RSOs) and parts depots including Frankfurt, serves Europe, Middle East, and African customers; Zone Three hub is being developed to serve Asia-Pacific and the RSOs and parts depots currently in the region will be anchored by a maintenance facility in Singapore, that will be operational in 2013.

When asked about the philosophy behind this regional “hub” approach, President Martel says, “Our business philosophy for international service is simple. We want to provide the best service that we can for our customers - where they are and when they need it. In 2001, the installed Bombardier fleet was about 2,500 business jets and about 80% of those were North American customers. Today we have more than 4,000 business jets in-service around the world – approximately 60% are North American customers, 40% are at international locations. Our international customer base is growing and we will be building service hubs to support them.

"At Bombardier we are refining a “yes” service philosophy. In the past when our service centers and parts depots were located in North America, our answer to international customer requests for service was sometimes “no” because of time and logistical constraints. We recognize that our customers operate their business jets around the globe and around the clock and we are bringing OEM quality service to them. We are being proactive and hiring, training, and building capacity to service our customers 24/7.”

Developing and staffing international hubs

Stan Younger, Bombardier’s vice president of Aircraft Service Centers, discusses the business strategies and process for developing a new OEM service hub and the phased approach to maturing a hub. “Initially a team is sent in to help organize, develop, and certify these international hubs at the FAR 145 level.

"We work with whatever regulatory agencies are involved with certification in a region.” According to Younger, they “monitor the density of aircraft in a geographical region and as that grows we begin ramping up customer support, networking assets, and increasing maintenance support personnel at the RSOs. We staff our international service centers with a combination of local technicians, staff from North America, and some supplied by sourcing agencies. We accept AMT avionics and electronic technicians with A&P certificates or the equivalent from their country.

The international AMTs usually speak several languages and have a good understanding of the culture of the local and regional customers. They are brought to one of the service centers for several months of on-the-job training to learn about the company culture, maintenance processes, and procedures, and especially our customer service philosophy. This philosophy is very important because our business jet customers are becoming more sophisticated and want to be involved in the maintenance activity.

“Like Starbucks’s business model, I want our customers to be able to take their aircraft to any Bombardier Service Center and get the same level of reliable and predictable service," Younger says. "The faces behind the counter or the toolbox may change but the customer gets the same quality experience and product. This is one of our tactics for building the Bombardier brand. To do this we need a higher level of contribution from our AMTs. First we need qualified AMTs that can effectively maintain our customers’ aircraft. We also need our AMTs to understand our cost and pricing models and when asked, can discuss these with the customer.

"Our business jet maintenance service is built on and will be sustained by customer trust. It is most important that our customers understand and trust our technicians' recommendations. This makes the conversation about pricing and cost much easier. Our customer-facing staff is much more important to our customers than our management and back office staff.” During the interview it became very obvious that training and staff development was a passion for Younger and an important part of the corporate culture.

Advice for AMTs

Younger graduated from Spartan College of Aeronautics in the mid-70s and through hard work, personal development, and perseverance is now a vice president for a major OEM. He offered some very appropriate advice regarding development and promotion for the AMT.

“In my opinion and experience most companies don’t do a very good job of developing AMTs for promotions to management or other key positions. We often take our best AMTs and promote them to management without adequate training and development. AMTs, as well as members of management, must develop business acumen and have essential business and financial knowledge and skills. Bombardier is addressing that gap by providing training to help our maintenance staff develop these capabilities. Training and staff development is one part of our 'rebranding initiative.'”

During the week of our interview it was announced that “each of Bombardier’s eight wholly owned service centers in the United States was awarded a 2011 FAA Aviation Maintenance Technician (AMT) Diamond Award Certificate of Excellence, the industry’s highest honor for aviation maintenance.

This award recognizes Bombardier’s commitment to offering customers access to the most highly skilled work force through an extensive training program.” As for the AMTs, Younger suggests they consider their own personal brand by looking at how they are marketing their skills and abilities and improving their value in today’s marketplace.

He recommends a personal continuous improvement program where AMTs take business and finance courses or learn a second language. “Business aviation AMTs must stay current with technology and as customer-facing employees; develop good customer service and communication skills. They also must be developing their capacity for larger roles and positions with their companies.”

Younger’s position was echoed by a panel of three executives from major business aircraft MRO companies during the recent Cygnus Aviation Expo in Las Vegas who stated that their businesses were growing again so they were looking for and hiring AMTs that demonstrated good values, ethics, and communication skills.

After hearing from Bombardier’s executives about their business strategy and implementation of service hubs, we can only conclude that other MRO companies wanting to enter and compete in the global marketplace have their work cut out for them. It was also apparent that aviation company executives are placing much greater importance on AMTs having or developing business and customer service skills.

Editor’s note: These interviews were made possible through the diligence of Mark Masluch, Advisor, Media & Public Relations, and Bombardier Customer Services.