Features MRO
Canadian Helicopter MROs

Much to their delight, Canadian helicopter MROs (maintenance, repair and overhaul shops) have stayed busy over the last year. “As with most companies in the industry, business is booming,” says Chris McDowell, Heli-One’s VP Business Development and Sales. With Canadian facilities in Richmond, BC, Heli-One employs over 900 in Canada, US, UK, Norway and the Netherlands. “We provide MRO support to companies all over the world and find that worldwide this industry is very busy,” McDowell says. “Our R&O revenue in fiscal 2007 was approximately $396  million – up more than $30 million from last year.”

“Overall, [it’s been] a busy and successful year, with most areas of the MRO businesses running close to capacity,” says Phil Kemp, VP Sales with ACROHELIPRO Global Services in Richmond, BC. “This is pretty much the feeling across all businesses in this field.”

However, the past 12 months would have been even more profitable, were it not for the strong Canadian dollar. “We had a good year, but not as good as expected,” says Mike Guntner Jr., vice-president of Essential Turbines in Dorval, Quebec. “The continued drop in the US dollar defi-nitely impacted our business, but we concentrated on some key international contracts that are now paying dividends in this fiscal year.”

Busy Times Everywhere
What kind of helicopter work is keeping Canadian MROs busy? Everything, Guntner replies. “There are no slow areas,” he explains. This said, “Things such as quick repairs and leaks take up most of our time because customers require a quick turnaround time. Large repairs/overhauls are received with advance notice and thus our planning allows for breathing space.”

At Canadian Helicopters, which owns and maintains 132 aircraft operating from 43 base locations across Canada, “we’ve increased our component shop staff by 50% over the last 12 months just to keep up with our internal demand,” says vice-president Ed Bergnach. “Our shops are extremely busy, because aircraft activity is up almost across the board.”

“With a global customer base, if one part of the world slows down, there are always others that are doing well,” McDowell observes. “We don’t really have a slow area.”

All of this activity is being driven by a booming global helicopter industry. To paraphrase Bergnach, helicopters are being flown everywhere for all kinds of missions, including oil and mineral exploration, firefighting, transport, and air medical services.

Number one Challenge: Getting Good Help
As mentioned, the strong Canadian dollar has dampened the domestic helicopter MRO sector, at least when it comes to attracting work south of the border. But there are other challenges being faced by Canadian MROs as they stay busy.

Of these challenges, finding and keeping qualified technicians remains at the top of the list.
“Finding talented, qualified people is the number one challenge in the hot labour markets of western Canada,” says Kemp. “Providing good work environments and opportunities for positive personal growth within the organization is perhaps the most important challenge for employers. There is a very skilled and dedicated workforce in our area and they are all extremely cognizant of their potential and the opportunities being provided by the marketplace.”

“At CHC/Heli-One we offer competitive salaries and comprehensive benefits plans as a means of attracting and retaining staff,” says McDowell. Meanwhile, Essential Turbines is improving staff morale (and thus retention) by bringing them into the decision process. “We listen to our employees,” Guntner says. “This has been the biggest learning curve we are going through. It is also the toughest. We cannot do everything they request, but we do listen and now have given our employees every opportunity to present a solution to a concern.”

 The Pros and Cons of Older Aircraft
These days, helicopter owners are flying their machines longer than ever before. “Older aircraft have to be properly maintained for their age. You can’t just follow the manufacturer’s minimum recommendations and expect no surprises during the major inspections,” explains Bergnach. “With demand outpacing supply, waiting lists for new aircraft are growing longer and longer. A one- to three-year wait for a new aircraft is not uncommon these days, so people are keeping older machines flying, and looking for used aircraft to expand their fleets.”

On the positive side, keeping the same helicopters in service longer “can be good for both the operator and the service support company,” says Guntner. “If someone keeps an aircraft for a long period of time, the operator and service support facility understand the helicopter and its requirements and capabilities. The service/repair facility also benefits from any scheduled/unscheduled maintenance.”
On the negative, “with the increased levels of operational activity, comes an increase in parts consumption.” Kemp says. “The problem currently being encountered is many OEMs had slowed production to meet the declining fleet activities for many types, planned production around current or projected utilization, and have seen flight utilization at unprecedented levels. Other serious problems have occurred from raw material shortages, vendor capacity and vendor and production capacity being lost through attrition.”

Bergnach agrees that helicopter parts supply is a major hurdle. “It’s happening across the board,” he says. “Parts supply shortages have been a major cause of downtime with almost every supplier we deal with. Some are doing a better job than others, but in general the current helicopter boom is keeping components in very high demand.”

Concludes Kemp, “There will always be a lag in parts production when operational levels increase, and we are in the midst of the consumption/production curve at this time.”

Other Challenges
Ask Guntner what other issues Canadian helicopter MROs are facing, and he replies: “Lack of Transport Canada assistance. There is a serious shortage of PMIs [Principal Maintenance Inspectors] and our business is expanding which requires their input and at times, their approval.” When PMIs are in short supply, business expansions can be stalled.

“In addition, cash flow is becoming an ever-present concern,” Guntner says. “Suppliers want to be paid within 30 days, and many operators struggle to pay their service support facilities in 30 days. We have even noticed that provincial governments have seriously contributed to this concern with ridiculous accounting issues that have held up cheques or not having the appropriate money transferred from one government account to another in a reasonable amount of time.”

Looking Ahead
With demand for helicopters continuing to increase, Canadian helicopter MROs are bullish about the future. “We expect the upcoming year to be a good year for Heli-One,” says McDowell. “We believe the industry will continue to grow, and are building a new 235,000-sq-ft facility to help ensure we have the capacity to grow with the industry.”

“We see the business continuing at the same or increased levels,” says Kemp. “Parts will continue to be a significant issue, but capacity issues within the entire MRO sector may become an increasing concern to operators. As the newer types enter the overhaul cycle this may also impact existing capacity as MRO providers gear up for the future.”

“2007/8 will be our best year ever,” enthuses Guntner. “Several key and profitable contracts are in place. In addition, we expect to implement several new capabilities that will be very exciting for our employees and the helicopter industry. The future looks better today than at any other time we have had the opportunity to reflect upon it.”