Aerospace Focuses on Maintenance and Niche Business For Growth
Economic growth in the aerospace industry has been lukewarm, but companies large and small are taking advantage of middling advances to propel expansion.
Craig Guillot (June/July 10)
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Maintenance and Niche Businesses Blossom
While the construction of new aircrafts might be slowing, Woodard says maintenance is up. As airlines hold on to their planes, demand for maintenance and upgrades increases. More airlines are handing maintenance contracts over to third party companies.
Since airlines lose money for each hour a plane remains out of circulation, maintenance timing is critical. Spokane's combination and addition of painting contractors along with other maintenance functions makes the city a one-stop-shop for aerospace services.
"Being online is strategically important to these companies. It is about $6,000 to ferry an aircraft and flight crew. Having the ability [to get all the work done in one place] can bring significant cost savings," Woodard says.
Growth exists for these third party contractors because so many of them support the industry. In New Orleans, the Michoud Assembly Facility is one of the largest manufacturing plants in the world. It features 43 acres under one roof along with 22 million square feet of manufacturing space, 400,000 square feet of office space, and more than 40,000 square feet of machine and shop equipment. Mike Dawson, general manager of the Michoud facility manager Jacobs Technology, says that as NASA opens the facility to non-NASA businesses, the sector will have great potential.
"We've been working for the past nine months to develop models to attract more [aerospace companies]. There has been a lot of interest and a lot of entrepreneurial efforts where companies want to turn their ideas into a production line," Dawson says.
Smaller companies and entrepreneurs may hold the key to industry growth in the coming years, Hernandez says. Gore Design Completions, a San Antonio outfit that designs, engineers, and builds custom interiors for Boeing's Airbus, counts heads of state as its core clients. The firm has produced planes for the president of China and other Central Asian and Far East leaders. Gore director of business development Rob Tomenendal says that although the aerospace industry has had its declines, specialty and niche companies can weather the storm.
"Because we are such a narrow market, the clientele that we deal with aren't really affected by the economic downturns," Tomenendal says. "Our business is doing very well and we have business booked in the hangar until about mid-2012."
In Spokane, Absolute Aviation Services is thriving in a cost-savings climate. The company serves Delta, American Airlines, and British Airways and focuses strictly on electrical component repair and overhaul services for Airbus, Boeing, and regional aircrafts. Instead of buying a brand new wingtip light for $8,000, the client can refurbish an existing light for less than half the price.
"That is the big trend," Woodward says. "You're seeing airlines holding onto these planes and extending the useful life as long as they can. That just causes a need for more maintenance and there's a lot of growth in that."