Finding your core
At Empire Airlines, Komberec made the decision to split the company, with MRO operations at Empire Aerospace providing about 20 percent of his business and the cargo carrier operation at Empire Airlines making up the rest. Regional flight operations, he said, would be the core of the business, with MRO being just a supplement. “I see that trend continuing,” he added. “I think the MRO’s contribution will grow steadily, but I still don’t see a point in time where it exceeds what the flying operation does. We’re a quiet company, [but] our reputation is spreading.”
Like many airframe MROs, Empire Aerospace division doesn’t do component repairs or engine overhauls,“but we do pretty much everything else, including all of the sheet metal,” Komberec said. “We have a composite repair shop, where we do 95 percent of the composites of the airplanes right here in house.”
For flight operations, Empire Airlines currently operates 19 ATR-72s and 25 Cessnas, all hauling packages for FedEx, plus three ATR-42s in pax configuration for Hawaiian Airlines. The carrier is also in process of bringing in three more ATR-72 freighters to serve Hawaiian this spring.
The hardest part for Empire was mixing heavy maintenance work with line maintenance. “You get a lot of ups and downs,” Komberec said.“If you gear up for the heavy maintenance side and you don’t have the capacity all the time, then you’ve got labor that you’ve got to spill off.”
Komberec said he still sees customers that used to perform their own MRO, but who recently decided to farm it out for a variety of different reasons, including cost considerations, a recent merger or the realization that MRO work is not part of their business plan.
Donald Kamenz, vice president of sales for full-airframe MRO Commercial Jet, agreed, saying he has several clients that decided they no longer wanted to do their own MRO work. “Among the cargo carriers which have, let’s say, one to six aircraft, to set up maintenance for that kind of an operation is time-consuming,” Kamenz said. “So, we definitely see that a lot of airlines have set up – I’ll call it a virtual maintenance approach – where they’re in control of their maintenance, no question, because they have to be, but they sub it out to us.”
Much of Commercial Jet’s repeat business comes from its connection with freighter conversion firm Aeronautical Engineers, Inc. (AEI), Kamenz added. He said that several customers, such as DHL, Airworks and Swift Air, have returned after their AEI conversions were completed to request anything from a small conformity check to a full D-check.
Sometimes, the core business involves more than one operation, like at Israel Aerospace Industries Ltd. (IAI), an OEM of aircraft and many other aerospace products. Bedek Aviation Group, which is IAI’s MRO and conversion arm, devotes about 75 percent of its time to full-service MRO work, with the remaining 25 percent spent on cargo-configuration conversions.
“The cargo conversions is our core aircraft business, in addition to the MRO,” said Moshe Haimovich, director of marketing and business development for IAI/Bedek. “We have the flexibility to accommodate the operation to the picks/fluctuation in the conversion market, as well as in the MRO market. This flexibility is the key to a profitable business.”