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Russian renewal

Recognising that aircraft maintenance is a business in its own right, Russia’s S7 Group has decided to handle it accordingly and with a view to capturing a promising market. Tom Zaitsev reports from Moscow and Novosibirsk

Known as Sibir before 2005, S7 Airlines stands out among Russian top-tier carriers in two respects. Firstly, it has a dual tenancy – with main operating bases at Novosibirsk Tolmachevo and Moscow Domodedovo airports. Secondly, it has no in-house technical support arm. All maintenance work on its fleet, excluding engine repair, is performed by standalone firms loosely related to the parent S7 Group.


These are run by a designated management company called Engineering LLC. On the day of MRO Management’s visit, its chief Vladimir Perekrestov called it S7 Maintenance Holding. He explained: “Our parent [S7 Group] comprises around 20 aviation-related businesses. We act as an owner and directorate of all technical and engineering units affiliated with it through common shareholders.”


Four units


Engineering LLC was set up a year ago and to date, it has brought four major assets under its wing – Tolmachevo-based Sibir Technics, S7 Engineering, Domodedovo Aviation Technical Centre and former aircraft overhaul plant 411 in the city of Mineralnye Vody, in southern Russia.


Sibir Technics evolved from Sibir Airlines’ maintenance arm, which split off following the carrier’s restructuring and rebranding in 2005. But its roots go back to 1957, when the first MRO facility opened at Novosibirsk. Located almost equidistant from Siberia’s farthest points, it eventually became a natural venue for all mainline Tupolev and Ilyushin aircraft types used by Aeroflot’s local divisions.


By contrast, Moscow-based S7 Engineering had no background when it came on stream in January 2006. At that time, the freshly rebranded S7 Airlines began introducing five ex-Aeroflot Airbus A310s. Before long, it also added 10 Boeing 737-500s, becoming Russia’s third-largest operator of foreign-built passenger aircraft behind Aeroflot and Transaero.


To secure heavy maintenance for its newly acquired western jets, the carrier initially turned to Lufthansa Technik because Sibir Technics could only perform A checks on them. With fleet modernisation gaining pace and more foreign aircraft, including A320s, scheduled for delivery, the airline leaders decided to establish a special enterprise certified for a full range of work, up to the heaviest airframe structural checks.


Perekrestov says S7 Engineering was deliberately designed to service only non-domestic models. “We chose to create it from scratch to make sure that it does not bear legacy of the past and meets international standards rapidly. Co-operation in this venture with Lufthansa Technik was indispensable. They assigned a group of specialists who teamed up with our taskforce for six months to help put it all on the right track.”


To further increase production capacity, in 2010 the S7 Group snapped up Domodedovo Technics with its ample hangar from the airport operator East Line, which wanted to spin it off as a non-core business. Last year, a fourth heavy maintenance facility was put into operation in Mineralnye Vody, where S7 acquired a newly privatised plant, which used to specialise in overhauling Tupolev Tu-154s.


Quick learners


In the meantime, to combat spiralling fuel costs, S7 Airlines continued switching to more efficient western aircraft types. By October 2008, when it completed phasing out Tu-154s and Ilyushin Il-86s, Sibir Technics and S7 Engineering were already capable of fulfilling a wider range of tasks on Airbus and Boeing narrowbodies.


The first C check on the Airbus A319 was performed in November 2008 and on the 737-800 in the following year. Shortly afterwards, S7 effectively adopted a two-type fleet model. Today, apart from a pair of Boeing 767s, which replaced A310s, it uses around 30 A319/320s, while its charter subsidiary, S7 Globus operates a dozen 737-800s.


Naturally, constituent companies of Engineering LLC could enjoy guaranteed orders from the sister airline, enabling each of them to become a prominent service provider and master higher value jobs. S7 Engineering and Sibir Technics have received EASA Part-145 approval to service the 767 airframes and extended their competence to perform more sophisticated D checks on the 737 Classics/NG and A320s – they were the first to achieve them in Russia. From January to May 2011, both accomplished 33 heavy maintenance tasks, up from 45 in the entire previous year, including four and three D checks respectively.


The Mineralnye Vody division has also proved to be capable of advancing quickly. In 2011, it conducted its first A319 C check, says Perekrestov, with 20 more Airbus and Boeing narrowbody jets scheduled for overhaul before June. Although Domodedovo Technik is partially certified to service the 737s and A320s, at this point it adheres to its traditional MRO competences covering all Ilyushin and Tupolev types. The company will cater to these ageing workhorses as long as they remain in service with domestic carriers. But when demand for keeping them airworthy finally fades away, it should be absorbed into S7 Engineering to form one MRO provider at Domodedovo.


Broad reach


In terms of production capacity, almost evenly spread among its four business units, the enterprise now rivals Russia’s largest and oldest MRO specialist VARZ-400, which is based at Moscow Vnukovo. In total, hangars cover 35,700m2, while offices, workshops and storage occupy 58,000m2. The company also claims to be capable of accommodating up to 18 narrowbody and five widebody airframes.


In particular, with a 11,200m2 hangar, Sibir Technics is able to house six aircraft, including two widebodies, at any given time. This makes it the biggest MRO plant in the vast area between the Ural mountains and the Pacific coast. S7 Engineering and Domodedovo Technics share a six-bay facility with up to half the spaces used for fixing Soviet-built types. The plant in Mineralnye Vody has a similarly sized capacity which could be expanded through its ongoing restructuring. In addition, there are three transit and line maintenance stations. Sibir Technics has set them up at Krasnoyarsk and Irkutsk, while S7 Engineering runs a permanent certified outlet at St Petersburg’s Pulkovo Airport.

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