Rockwell Collins is a regular visitor to MRO exhibitions. The Cedar Rapids-based company was attending MRO Asia-Pacific in Singapore last week and has just closed its European tour. Thierry Tosi, vice-president and chief executive of Rockwell Collins's Service Solutions division, took the opportunity to explain to us how Rockwell Collins sees the maintenance market in Europe.
What are the bases for Rockwell Collins's service activities in Europe?
There are three important points. First of all, there is a real tradition of after sales service for customers at Rockwell Collins which cannot be denied. For the last ten years we have always ranked in the top 5 suppliers in OEM airline satisfaction surveys. This is part of our culture and helps us win market share in the maintenance sector. We have two maintenance programmes: Dispatch 100 for airlines - which is an integrated support programme which covers repair or spare parts - and CASP (Corporate Aviation Service Program) for business aircraft. Both programmes have experience double-digit growth as Rockwell Collins has high performance and recognised support.
In addition, we have a strategy of proximity with service centres which are close to the customer. We have two strategic centres in Europe: one in Toulouse, for the commercial side and one in Heidelberg, for the military side - given that we will be carrying out little military maintenance in each country when it is personalised by the local Ministry of Defence. So, not only can customers select an integrated offer, whether Dispatch or CASP, but they also know that they have a service centre to repair their products quickly or for a return to pool, since there is also a strategic product pool for exchange or to help customers when they need spare equipment. This service centre will be able to repair anything which comes into the pool very quickly and put it back there, which also enable quicker pool planning.
So, our strategy is close service, integrated service and flexibility. Some customers prefer "parts and labour" contracts, while others prefer flight hour based contracts, to which may be added spare part and asset management. Some simply want repair and others want us to manage stocks, with others wanting to buy some components, and so on.
Then there is the whole product modernisation part, which often depends on mandates. At the moment, there is extraordinary demand worldwide for ADS-B and deadlines which are approaching.
Are you on the used parts market?
I also supervise the activities of our Intertrade supplier, which markets used spare parts. It is a market which is continuing to grow while we have been seeing a reduction in the number of aircraft aircraft retirements for the last year, and is one where we are very well positioned. It is a market which really works on demand: once more aircraft have been taken out of the market that means there are a lot more parts available. Conversely, when there are fewer parts available, the market is more difficult.
Rockwell Collins has a well-balanced system since when more aircraft are withdrawn Intertrade will be able to manage more used products, and when fewer aircraft are withdrawn this means that the products are on the aircraft and fly more, so that also generates more maintenance.
How quickly is Rockwell Collins growing in Europe?
Our growth generally corresponds to the growth in air traffic - which is slightly lower in Europe than in Asia. It's a little better this year thanks to our integrated solutions, Dispatch and CASP, which are growing beyond the air traffic part since we are selling more services.
Is it more difficult to develop the maintenance market in Europe than elsewhere?
The dynamic is different in this region, but I wouldn't say it's more complicated. This is due to the presence of very large MRO companies and a culture where companies are used to carrying out repairs in-house. Other regions around the world have expanded rapidly at a given time and haven't necessarily developed MRO capacibilities or repair solutions in each airline. These are more ready to sign integrated contracts where they delegate their maintenance completely to a company. In Europe, there is AFI KLM E&M, Lufthansa Technik, SR Technics, British Airways which carries out repairs in-house, Iberia, TAT, and so on - you could almost list the whole of Europe. This is without including Airbus and Boeing, which propose maintenance solutions and whose ambition is to be the main MRO solutions providers for their customers, the military sector and helicopter manufacturer OEMs. This of course creates a different dynamic from other regions. Either we adapt to the customer or we get left out. So, our strategy is to understand the needs of all these customers and to work with them, while preserving our own interests.
What are the stakes involved in the recent partnership you signed with Atlantic Aviation Group?
We have a Boeing 767 and 757 modernisation solution. It is a new cockpit with LDC displays which replace cathode tubes. It enables us to save weight and consumption and also achieve higher display development capabilities. This is critical for future air traffic management developments, whether for improved vision systems, radar, all navigation displays and so on. A new technology screen enables us to evolve, to have enhanced vision systems and have common pilot training between new generation aircraft and these modernised aircraft - for example, there are a lot of similarities with the 787s and the 737s when we carry out this cockpit retrofit.
We have already modernised certain 757 and 767 fleets in the United States and this agreement with AAG should enable us to deploy this solution in the EMEA region. For now, the priority is Europe but we are also looking at Asia, even if the fleet is smaller.