Aerospace maintenance, repair and overhaul sector faring relatively well

BY KATHY HAGOOD
        Alabama’s aerospace maintenance, repair and overhaul (MRO) sector recently got a boost with the announcement that Valencia, Calif.-based Regent Aerospace would open a plant in the Brookley Industrial Complex in Mobile.
        The aircraft interior refurbishment operation is being established in part to support neighboring MRO operation ST Aerospace Mobile. That ST Aerospace operation, a subsidiary of Singapore-based ST Engineering, services wide-body and narrow-body aircraft. With more than 1,200 employees it’s Mobile’s largest manufacturing company.
         “We expect this decision will have a significant impact on the growth of the MRO sector in Mobile and a positive effect on our local economy. It’s especially welcome considering the economic slowdown the country has experienced,” says Bill Sisson, executive director of the Mobile Airport Authority.
        ST Aerospace has heavy maintenance contracts with United Airlines and US Airways, and Regent helps support those with new seats and other interior refurbishment.
        “It’s a good synergy to be located right next door. We can provide better customer service,” says Tom Abner, Regent quality control manager.
            During the first phase of its entrance to the Alabama market, Regent plans to employ 90 employees. The company was hiring workers in April as well as pursuing other customers. Future plans include expanding at Brookley and doubling the Regent workforce within the next two years.
        “Definitely it’s good news for the sector, which has had its ups and downs in this economy,” said Jeff Thompson, executive director of the Alabama Aerospace Industry Association (AAIA).
        The MRO sector in general is faring much better than the general aviation sector, which is more vulnerable to economic downturns. However the MRO sector isn’t as strong as space and defense in general, relatively stable thanks to major government facilities such as Fort Rucker, Maxwell Air Force Base, Redstone Arsenal and Marshall Space Flight Center.
        As the economy improves Thompson expects the MRO sector to rapidly ramp up its revenues because Alabama has a good supplier base to facilitate growth.
         “There’s a lot of pent up interest and demand out there for MRO work. But people are holding off to see what’s going to happen with the economy,” Thompson says.
        AAIA is collecting aerospace industry economic impact statistics and expects to issue a report sometime this summer. The last report, released in 2003, showed $3.66 billion in direct wages here in Alabama were generated by the industry.
        Aircraft MRO accounted for 19 percent of aerospace jobs and aircraft part MRO and manufacturing an additional 6 percent, according to the 2003 AAIA report.
         “We thought we’d have the new report out by now, but these companies are fairly tightlipped about their numbers. It’s a competitive industry,” Thompson says.
        Major government and/or commercial contracts can make or break a company’s revenues and profitability.
        New contracts have boosted the bottom line for the Andalusia operations of Helicopter Services North America, a subsidiary of Toronto, Ontario-based Vector Aerospace.
        One of those is a subcontract to paint 25 TH-67 (Bell 206) Fort Rucker helicopters and overhaul two damaged TH-67 helicopters. Another is a $15-million contract with the Brazilian Air Force to support of its fleet of Bell H-1H helicopters.
        The Andalusia operation, which focuses on MRO for Bell and Eurocopter helicopters, doubled the size of its facilities in recent years and hired 25 new fulltime employees last year for a current total of 94 workers. Additional plant expansion is being considered.
        “We’re in a growth mode. We increased revenues by 25 percent last year and expect a 30 percent increase this year,” says Alan Fletcher, vice president of operations for Andalusia.
        Fletcher’s operation has established a business office in Daleville next to the to Fort Rucker Army Airfield to facilitate customer service and is opening an office in Huntsville for Redstone Arsenal.
        Alabama Aircraft Industries Inc. in Birmingham, which services large fixed-wing aircraft for the military, is pursuing to several new MRO contracts for U.S. Air Force C-130 transport aircraft and U.S. Navy P-3 patrol aircraft. The company maintains a huge facility, 1.2 million square feet of covered hangar space, next to the Birmingham International Airport.
        “We live and die by our contracts. And it’s not easy for us to compete against larger players like Boeing and Lockheed,” says Ronald Aramini, president and chief executive officer of the publicly traded company, which has experienced net income losses for the past few years.
        The company’s employment numbers, now at about 730 workers, dipped several years ago to less than 500 workers. And the company likely will lose 100 to 150 workers this year as most of its current U.S. Air Force KC-135 aerial refueling tanker work is completed.
        “But if we win the contracts we’ll be back up to our current level or even above,” Aramani says. “(Congressman Spencer) Bacchus and (U.S. Senator Jeff) Sessions are fighting for us.”
        Alabama Aircraft Industries, formerly Pemco Aviation Group, owned several other MRO operations, including Pemco World Air Services in Dothan, but sold them off in recent years to concentrate on its core business.
        “We wanted to focus here on what we do best,” Aramini says.