A350 JV should double MRO market share for Air France-KLM and Airbus

Air France-KLM Maintenance & Engineering (AFI KLM M&E) intends to double its market share in component maintenance of the Airbus A350 to some forty percent. That’s the target of the proposed joint venture with Airbus, which was announced in early September. AirInsight spoke to Benjamin Moreau, SVP of Strategy & Business Development at MRO Europe in Amsterdam. AirInsight – The press release about the JV was issued in early September. What steps need to be taken before the JV is finalized? Benjamin Moreau – “We still have a lot of topics to tackle together with Airbus, mainly on the pathway. We need validation by the regulatory agencies, the European Commission, and other authorities to get approval for our project. This is antitrust approval.” AirInsight – What is the JV bringing to Air France-KLM and what to Airbus? Moreau – “This is not the first question we asked ourselves. The first question is: what does it bring to operators? Does it bring value to the market? That’s what we discovered by working together on this project. Yes, it does. We believe it is going to improve the value proposition, improve the availability of parts, improve the economics for the operators, and it will mitigate in the long-term all the risks related to supply chain issues.” “For Airbus and for ourselves, it is a matter of combining strength on that vary specific platform, where we see that we have complimentary forces for us as an airline MRO and Airbus as the aircraft manufacturer.” “We are offering maintenance from nose to tail, on top of other services that we can offer as an airline MRO with all the knowledge that we have.” AirInsight – There are competitors out there on A350 maintenance, like Lufthansa Technik or HEACO. Do you want to become the biggest player in the A350 MRO market? Moreau – “We want to bring the best value to the market. If the market recognizes that, we expect to gain market share, of course, but that is mainly driven by what that brings to the operators.” AirInsight – You have now some ten airline customers for the A350 MRO program at Air France-KLM, correct? Moreau – “Yes.” AirInsight – Of course, Air France-KLM recently announcing its intention to order fifty A350s plus forty options makes a huge difference to your business case… Moreau – “This is not what is driving the project. These are topics that are in parallel. For sure, adding aircraft and operating more will help the business case, but the business case was already positive by itself.” AirInsight – But if you look at the A350 MRO market as a cake, what share do you have now and where do you want to be? Moreau – “Today, we are at about twenty percent for aircraft component maintenance. By combining our strengths, we go up to forty or fortyish percent together with Airbus. It is a combination of combining our current customer base and growing the fleet. The fleet will grow as aircraft age. And we expect to offer sufficient value proposition for new customers to step into our joint venture.”

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