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Mix and match

MTU Maintenance has developed a hybrid business model to simultaneously meet the demands of several sectors of the engine MRO market. Ian Harbison reports from Hannover

Late last year, MTU Maintenance celebrated its 35th anniversary in the engine MRO business, having started in 1979 with the General Electric CF6-50 and LM2500 industrial/marine gas turbine from its first facility in Hannover, Germany. This was a natural second step by the parent company – MTU Aero Engines based in Munich – in diversifying out of the military engine market, having become involved with civil engines in 1971 with the production of CF6 parts for the Airbus A300. Since then, there has been a link between new engine production and MRO (see Table 1) – most notably with the IAE V2500, for which MTU Maintenance became the very first overhaul facility in 1989, and is now the market leader (see V for Valuable). Announcing its preliminary 2014 performance figures, the company said that the V2500 was the key revenue driver in the commercial maintenance business, recording a 7% increase in revenues to €1,298.9 million (up from €1,213.7 million in 2013). 


Holger Sindemann, Managing Director & Senior Vice President at MTU Maintenance’s primary location in Hannover, says the company decided to enter the overhaul business as it does not have the cyclical nature experienced on the production side as projects came and went. In addition, most MRO products are linked to MTU Aero Engine’s risk-and-revenue sharing partner (RRSP) agreements with the engine OEMs. The project share usually represents the percentage of engines that are under long-term service agreements, which are expected to be allocated between the partners. Though this provides a base load, it does not stop the company actively pursuing the independent market. In these cases, a licence still has to be purchased from the OEM – a practice also followed in straightforward commercial agreements like those for the CF34, CFM56 and GE90-110/115B.


In total, MTU Maintenance carries out MRO services on over 20 engine types, with applications ranging from widebodies and business jets, to military aircraft and helicopters. Ten of them are currently being served in Hannover, which remains the heart of a worldwide network developed over almost 25 years. In 1991, MTU Maintenance Berlin-Brandenburg was launched, which now looks after Pratt & Whitney Canada PT6A, PW200, PW300 and PW500, as well as General Electric CF34 family engines. It is also MTU’s centre of excellence for industrial gas turbines. In the same year, Airfoil Services was set up in Selangor, Malaysia, as a joint venture with Malaysia Airlines for the repair of low-pressure turbine and high-pressure compressor blades. It became a wholly-owned MTU subsidiary in 2002, and then a 50/50 joint venture with Lufthansa Technik a year later. Today, it works on blades for CF6-50/-80C2, CFM56, GP7000 and V2500 engines.


MTU Maintenance Canada was formed in 1998 as a joint venture with Canadian Airlines (now Air Canada), but became a wholly-owned subsidiary in 2003. Based in Richmond, BC, next to Vancouver airport, it specialises in CF6-50 and CFM56-3 engines. In 2000, MTU Maintenance Zhuhai was established as a 50/50 joint venture with China Southern Airlines, specialising in CFM56-3/5B/7 and V2500-A5 engines. It extended its capacity by 50% in 2012, from 200 to 300 annual shop visits. The most recent addition, in 2011, is MTU Maintenance Dallas, which specialises in on-site/on-wing repairs.


Of course, the maintenance business usually covers the entire engine, not just the sections produced by MTU Aero Engines. An exception to the rule is the Engine Alliance GP7000 for the Airbus A380, where MTU Maintenance is the only facility for the low-pressure turbine repair. These are shipped from the GE plant in Nantgawr, Wales, which is currently the sole MRO provider for the rest of the engine.


MTU Aero Engines also produces the turbine centre frame for the GP7000, and has extended this to the GEnx for the Boeing 747-8 and 787, as well as the GE9X for the 777X. In the case of the GEnx, it is part of a product improvement programme which Sindemann says shows the company’s expertise in designing structures that are both lightweight and robust enough to stand up to the heat and pressure encountered inside a modern turbofan. Though the centre frame is one of the major structural components of the engine, it is also the transition duct from the high-pressure to the low-pressure turbines and thus is in the hot gas path.


With the Rolls-Royce Trent programme off limits, and no involvement with LEAP, MTU Maintenance has secured its place on the only other next generation engine programme currently available: the Pratt & Whitney PW1000G Geared Turbofan. The first engine will arrive in Hannover mid-2015 for training purposes. Although the first variant – the PW1100G-JM for the Airbus A320neo – is not due to enter service until the fourth quarter of the year, and the first shop visit is a long way off, Sindemann says preparations have to be made well in advance in case the OEM requires small fixes under warranty caused by the inevitable teething problems with a complex new powerplant. 


The ability to respond quickly in support of Pratt & Whitney goes back to 1989 – when MTU Maintenance was the first IAE shop for the V2500 – and has provided useful experience for other models, as well as the new programme. Early involvement delivers a subsequent commercial advantage through product knowledge and a good OEM relationship. In fact, a PW1000G Performance Improvement Package (PIP) has already begun which will improve the specific fuel consumption by an additional 2% by 2019. Airbus also recently announced the official launch of the A321neo, with 97 tonnes maximum take-off weight and a transatlantic range of 4,000nm, which requires an increased thrust level of 35,000lb.


Leo Koppers, Senior Vice President Marketing & Sales, says the MRO market situation is relatively healthy at the moment. The maintenance division of the company has overtaken military engine production in revenue terms and is now second only to commercial engine production. Over the next 10 years, forecasts indicate a 2.7% compound annual growth rate in terms of shop visits from commercial jet engines. Short-term demand might be increased by aircraft coming out of the desert in order to provide an uplift in capacity, these may include 737 Classic, 757s and 747-400 freighters. However, Koppers warns that this would only be temporary and the associated maintenance packages would most likely surround getting the engines to the end of their useful life, rather than full blown shop visits.


Fortunately, many of the current programmes will still be some way from the demand peak for shop visits. The V2500 is expected to peak in 2019, while the CFM56-5B/-7 and GE90-110/-115B will peak in 2024. By that time, the first shop visits for the next generation engines will not be that far off. Koppers says MTU Maintenance can serve about 50% of the current market and is confident that this can grow to 70% over the next decade as new programmes are introduced.


Conversely, some of the older programmes (CF6-50/-80C2, CF34-3, CFM56-3, PW2000 and V2500-A1/-D5) are seeing a decline, but the company has already taken steps to minimise the effect. MTU Maintenance Canada has been working closely with Southwest Airlines under an exclusive, five-year customised programme on CFM56-3 engines for its 737-300/500 fleet. This involves older engines being torn down to provide spare parts for those remaining in service. Clearly a developing market, the Southwest programme has subsequently been developed and enhanced to produce a complete portfolio of service called MTUPlus Mature Engine Solutions. As well as recovered material, services include repair of reusable material; storage and reuse of serviceable material; the sale of surplus or otherwise redundant parts to third-party customers; tailored workscopes; module swaps; and lease packages.


For the latter, MTU Aero Engines and Sumitomo Corporation established two companies in 2013. MTU Maintenance Lease Services is an 80/20 joint venture between MTU Maintenance and Sumitomo for short- and medium-term solutions, while Sumisho Aero Engine Lease is a 90/10 joint venture between Sumitomo and MTU Aero Engines that focuses on long-term lease arrangements. Engines covered include CF6, CF34, CFM56, GE90, PW2000 and the V2500.


On the floor

Dr Frank Seidel, Senior Manager, Repair Development & Materials, says the success of the business over the years has resulted in a steady expansion of the repair facilities at its Hannover location. It probably has the most extensive parts repair capability under a single roof, the company claims. The production area also includes two flow lines – one for disassembly, one for assembly – with engines moving after set time intervals. No distinction is made between models, with the exception of the GE90, which uses adjacent bays as work stations. The flow lines are located across the front of the building, with module sections located next, followed by a central inspection area. The repair lines and an automated cleaning and plating section are at the rear of the building.


Of course, processes are driven to reduce turnaround times, though fluctuating demand levels can pose a challenge in production planning. Inputs at very short notice are common, which increase work levels, but there can also be drops in demand. As such, there is a buffer of less time-critical engines that can be inducted to fill any gaps. This is controlled through induction review meetings that prioritise the flow line slots. As many staff are cross-trained on different powerplants, they can be redeployed to meet the work load mix at any given time.


Considerable investment has been made to ensure the latest technology is available. Currently being installed is a DMG Mori DMC 210FD 5-axis Universal Machining Centre, with a pallet changer that allows several items to be preloaded and processed in series. An inspection system using X-ray fan beam Computed Tomography (CT) has been recently introduced to simultaneously examine batches of turbine blades. The blades are rotated in the fan beam and a set of X-ray line profiles are acquired that show information of the external and internal blade surfaces, wall thickness measurements and internal casting flaws. Previously, some 30 measurements had to be made on each blade using ultrasonic probes. Another example includes a vacuum brazing furnace being used for a company-developed repair that deposits diamond-like cubic boron nitride particles on the tips of V2500 blades – when the engine is run for the first time, the deposit helps to ensure that tip clearances are minimised for greater operating efficiency.


The facility has two engine test cells. The second was built to handle the GE90-115B’s 115,000lb thrust, which is higher than any of the next generation engines coming on stream later. On the GE90 the company only receives the propulsor module for overhaul, so has its own fan case and blades for testing. As there are no environmental restrictions on run times, the cells can be kept busy – some 430 test runs were made in 2014 across all models and up to six engines can be in preparation at once.


Also on site is a major logistics centre, which opened in March 2013 after a building phase of only eight months. The 7,500m² storage building contains an automatic miniload warehouse, with a combined capacity for 140,000 spare parts. These are contained in barcoded drawer compartments of varying sizes. For rapid retrieval, the item is delivered via a powered roller conveyor system. Additionally, there are eight vertical carousels from Kardex Remstar with a height of 12m; traditional racking can hold 10,000 pallets up to 3m x 3m.


Before the centre opened, parts were stored externally so transportation distances have been reduced from 15km to only 75m. This involves a shuttle service every 30 minutes that delivers requested parts to the main facility. Here, they can be pre-kitted for just-in-time delivery to work stations on the floor.


Future work

With these investments the company is well placed for the three new engine programmes, which, Sindemann believes, have started a new trend. Currently, some 80% of MTU Maintenance’s work is independently sourced under licence, outside of any OEM agreements (it also gets work via OEM purchase order which it is not allowed to acquire independently, or a portion comes via the OEM as a network partner).


With GEnx, GE9X and PW1000G, long-term support agreements, with fixed RPFH payments, are increasingly being signed at the time of engine acquisition. This will lead to less independent work being available – hence the importance to MTU of having a RRSP agreement – though the OEM is left with a higher financial risk as income only derives from fixed fees. As well as driving the OEMs to provide better reliability and increased time on-wing, it also meant fewer shop visits for heavy overhauls during the engine’s life. This approach may change the OEMs’ current mentality of using new replacement parts rather than repairs. At present, if the OEM does not agree but the customer wants the solution, MTU Maintenance is actively involved in repair development, sometimes with OEM approval, sometimes with EASA approval. Sindemann believes EASA repairs will become a thing of the past as manufacturers see the advantages of lower cost repair solutions. Of course, his company is in an extremely strong position, with its experience and knowledge of high technology design and engineering.


In fact, MTU Aero Engines has already responded to this change, with the organisation having been restructured at the start of 2015 to align its OEM and MRO businesses more closely at board level. Dr Rainer Martens, Chief Operating Officer, will oversee all group production and maintenance facilities, while MRO sales and marketing will come under Michael Schreyögg, Chief Programs Officer.

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