Features MRO
MRO Roundtable

Canadian Operators Weigh In

Every year, Helicopters magazine takes a critical look at the state of the Canadian helicopter MRO (maintenance, repair and overhaul) industry. For this year’s analysis, we have brought together some of the industry’s top people. They are Valérie Delorme, CEO of Hélibellule at Montreal-Mirabel International Airport;  Mike Guntner Jr., VP and QAD of Essential Turbines in Dorval, Que.; Phil Kemp, VP Sales, Vector Aerospace North American Helicopter Services; and Tom Roche, StandardAero’s VP Helicopter Programs (worldwide facilities).

Helicopters: How has the last year been for your company, and the helicopter MRO industry in general?
Kemp: 2008 has been a very busy year in most of the product lines we support. For any line that slows there is always another coming up, but again these are cyclical products. There are certainly signs of economic slowing in some of our customer’s operating sectors, but conversely others are in a sustained or growth mode.

Guntner: We experienced a significant growth in local, U.S. and international markets. There doesn’t appear to be a slowdown in sight for us.

Phil Kemp, VP Sales, Vector Aerospace North American Helicopter Services.

Valérie Delorme, CEO of Hélibellule at Montreal-Mirabel International Airport.

Thomas G. Roche, VP Standard Aero Helicopter Programs.

Mike Guntner Jr., VP and QAD of Essential Turbines in Dorval, Que.

Roche: The pace of business has been steady but marginally lower than anticipated.

Delorme: Last year was our first year of operation. We have been working hard on building our reputation of giving a (good) and honest service. But for sure the biggest challenge was to make (it) heard that general and corporate aviation are back at the airport.

Helicopters: What areas of the business are the busiest for you, such as regular maintenance and rebuilds?

Delorme: At the moment, I would say it’s regular maintenance. In the near future, we will be able to offer maintenance on Bell 206, Bell 222-230, AStar 350-355, Gazelle 341 and Robinson R22-R44 models.  We are looking into expanding our services by doing rebuilds on these models and even more if demand occurs.

Guntner: Key maintenance contracts for major repairs and overhauls in the commercial and government sectors. Of course, we are always busy with quick repairs.

Roche: Our busiest is engine and accessory MRO.

Kemp: We have seen sustained demand across the medium and heavy helicopter airframe sector for both heavy maintenance and upgrades. On the smaller airframe side, demand remains very high due to the unavailability of new helicopters from the OEM, resulting in continual repair and rebuild activity. Engine and component business has remained steady through 2008. Our Glass cockpit upgrade programs have been extremely busy in all product lines.

Helicopters: What areas are slow, and why?
Roche: Certain segments of our customer base have been affected by higher fuel prices and general tightening of the operational purse strings (potentially as a result of credit crunch).  EMS operations seem to be less affected than corporate. Forestry and exploration have also been negatively affected.

Delorme: Rental service helicopters [are slow] because we are still at the stage of exposing our services to the general public.
Kemp: Many of the utility sector operators saw a slow start to the year, and this carried on throughout the season. Many of the commodity sector businesses have seen a slowdown in operations due to falling prices and harder access to discretionary funding, resulting in lower helicopter utilization.

Guntner:  We have not experienced any slow areas. If you are not busy right now, you’re probably doing something wrong.
Helicopters: In past years, we’ve seen an increased emphasis on owners keeping older aircraft flying. Is this still the case? If so, what challenge does this present to your company?

Delorme: Based on our short experience, yes we find that more owners keep their older aircraft flying. To this effect, the challenge to us is being able to answer the increasing demand.

Guntner: Yes, mature aircraft are still the most economical and financially accessible aircraft to operate. In addition, helicopter manufacturers are still maintaining long lead times for new aircraft. We are not seeing any direct challenges that impact our ability to service and support a mature fleet.

Roche: There is still an ongoing shortage of new aircraft so the average age of used aircraft continues to go up. From our perspective, maintaining older engines isn’t any more difficult.

Kemp: A well-maintained or upgraded aircraft is often the only viable option in many arenas, as there is no replacement aircraft available for the mission. We have seen many operators investing significant sums in completely refurbishing the airframe and upgrading the aircraft systems. Most are conservatively based on an additional 20-year operational return, with a resultant improvement in operational availability and profitability. The biggest challenge is being able to meet the demand!

Helicopters: What other challenges are you dealing with in the MRO business?

Guntner: Parts, or raw materials or whatever is the excuse of the day. Once in a while we will see a hiccup in stock availability. However, it is much better today than it was a year ago. Integrating new employees and having them become productive more rapidly is still proving to be a challenge, but we are getting there.

Kemp: Controlling costs in order to provide the best service to the customer. Parts remain an issue in every line at some point or another during the year. Regulatory and Certification delays impact many projects, with more demand on shrinking resources in all regulatory agencies.

Roche: Expectations related to availability of rental assets for use by the operator during the overhaul cycle. Operators are continuing to draw down their spare assets to support cash flow but are finding themselves struggling to find the necessary equipment to keep themselves flying.

Delorme: The challenge is to stay up-to-date; to always improve ourselves so we can give more to our customers and be able to stand out in this field.

Helicopters: Finding qualified people has been an issue in years past. Is this still the case? If so, what are you doing to find and retain good staff?

Guntner: Finding skilled and competent people is always difficult. This is why we work extremely closely with several trade schools and provide direct assistance through on-site participation and/or sponsorships. As a growing service and support company, we offer key opportunities that motivate and challenge a healthy team environment. We are still somewhat flexible and this is key to maintaining such a diverse range of personnel.

Roche: The availability of skilled personnel continues to be a challenge. We have continued to work with the local technical college in the development of programs specific to our needs and utilize a work experience program throughout the educational cycle. Retaining staff is a function of providing challenging work with enough variation to keep it interesting along with competitive pay and benefits and a positive work environment.

Delorme: Yes, it is still the case but our philosophy of business is treating our employees with respect and giving them good [working] conditions. In turn, this reflects on the service we give to our valued customers. We are really proud of our staff.
Kemp: Finding and retaining the very best people is always a challenging undertaking, but one were are very good at. We have a superb workforce full of committed, talented and skilled individuals that we are extremely proud of – they are Vector. We are starting to see more skilled people available in our area, and the tight labour market does appear to be easing slightly.
Helicopters: What opportunities exist for growth?

Roche: Geographic opportunities continue to be one of the primary areas for growth.

Guntner: As a small (compared to some other competitors) MRO, we are able to meet many difficult and customized demands. Therefore our business continues to meet and exceed our goals and objectives. The Canadian market continues to expand for us, but we have seen substantial growth from the American and European markets.

Delorme: We have been looking at the possibility of expanding our facilities to better meet the demand given the popularity of our location at Mirabel.

The biggest challenge for Hélibellule in the last year was to spread the word that general and corporate aviation are back at the Montreal-Mirabel airport.

Kemp: We anticipate introducing some new products into our capacity in the near future. Vector is totally committed to lean production techniques and coupled to other production capacity improvements, we anticipate being able to grow any of our lines as demand occurs to meet the opportunities in the marketplace. These improvements will offer greater value to our customers, whilst improving turn-times and controlling costs – all of which provide for organic growth.

Helicopters: Finally, how do you expect the upcoming year to be, in terms of business?

Guntner: We expect another wonderful year at ETI. In fact, we should exceed last year's growth substantially.

Delorme: I think more and more business people will travel by their own aircraft and that considering our strategic location and services we offer, we anticipate a very successful year.

Roche: We expect the upcoming year to be solid with increased aircraft utilization.

Kemp: Overall, we anticipate 2009 will be a good year. We do see potential for some operational sectors in for a potentially rough ride in 2009, particularly in the commodity and utility field; due to the perceived economic instability, high operating costs and expensive money. Fortunately, our customers consist of many highly adaptable, creative companies and individuals who will find ways to succeed and thrive whatever the market conditions.