At ExelTech, the goal is to be the best provider of aircraft MRO services for regional airlines and airliners. Lorie Greenspan finds out how the 60-year-old company is forging ahead with new contracts that take on more sophisticated aircraft parts and components.
The ExelTech Aerospace story begins with the rise in air transportation following World War II and expands into maintenance and engineering, a fortuitous turn in which the tail eventually began to wag the dog. In 2000, the company decided to focus entirely on its MRO operation with services that encompassed a wide range of regional jets and turboprops, and narrow-body aircraft.
But while MRO (maintenance, repair and overhaul) seemed to be its destiny, the company started more than 60 years ago by Spitfire combat pilot Paul-Émile Lapointe also had a hand in advancing the small airline industry in Eastern Canada. Lapointe had returned from flying 211 combat missions over North Africa and Europe in World War II, with the intention of founding an airline that would link small, remote communities along Canada’s eastern coast, stretching from Gaspé in the province of Quebec through Labrador to Hudson’s Bay in the far north.
With backing from local businesses in the small Quebec city of Rimouski, Lapointe began operations with a single war-surplus, two-seat Fleet Canuck, then quickly added Beech 18s, DC-3s and DC-4s. By the mid-1950s, his airline, Quebecair, had emerged as a dominant player in the Canadian aviation industry, with a reputation for its entrepreneurial spirit, aggressive growth and customer service – values that continue in ExelTech today.
But it was Quebecair’s Montreal-based maintenance and engineering group that took the show with its own reputation for innovation and high productivity as the airline pioneered the operation of turboprop aircraft (Convair 540) and small jets (BAC 1-11). In the 1980s, after the company was acquired by a major Canadian international air carrier and re-named Inter Canadian Airlines, it became the North American launch customer for the Fokker F.100 regional jet and a lead operator of the ATR 42 turboprop, going on to establish utilization and maintenance reliability records.
ExelTech Aerospace emerged as a new standalone MRO company in a management buyout in April 2000 of Inter Canadian’s maintenance and engineering operations. Focusing initially on ATR 42 maintenance, ExelTech has grown rapidly, expanding its support services to encompass a wide range of regional jets and turboprops, and narrow-body aircraft. The company added an additional maintenance facility in Montreal in 2003 and merged with Quebec City-based NordTech in 2005.
In the summer of 2008, ExelTech opened a 140,000-square-foot, state-of-the-art maintenance facility at Montreal’s Pierre Elliott Trudeau International Airport where the EJET family will be serviced. It also converted a former heavy maintenance facility into a dedicated line maintenance facility servicing domestic and international customers for Montreal’s Trudeau International Airport. “We increased capacity by 30 percent through the new building, which enables us to have 16 lines of aircraft going non-stop,” says Donald Kamenz, vice president of sales and marketing.
In its current configuration, ExelTech is the third-largest commercial airframe MRO vendor in Canada, providing maintenance repair and overhaul services to airlines in Canada, the U.S. and 25 other countries. The company holds Transport Canada, U.S. Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) approvals to maintain a range of aircraft and associated structures, components and systems. Aircraft models serviced by ExelTech Aerospace include Embraer ERJ 145 family and EJET 170/190 family, and Bombardier CRJ regional jets and ATR-42 and 72, Bombardier Dash-8 and Saab 340 regional turboprops and Boeing 737 narrow bodies.
In addition to heavy maintenance, ExelTech Aerospace offers a dedicated line maintenance facility servicing domestic and international customers for Montreal’s Pierre Elliott Trudeau International Airport. A presence on the East Coast gives ExelTech a convenient jumping point between Europe and North America, particularly because of bilateral agreements with the FAA that allows the company to perform maintenance to European certified aircraft, enabling ExelTech to transition from country to country.
“There’s a continuing trend to outsource maintenance and leave the airline to its core business, which creates a large degree of communication requirements among airlines,” Kamenz adds. “We offer full service maintenance which makes us a one stop for airlines, with airframe, parts and engine. Another trend is to partner with OEMs as they sell aircraft to sell maintenance around the aircraft, allowing ExelTech to take care of the complete maintenance program.”
Such is the focus of an LOI the company recently signed to finalize membership in the newly formed SuperJet International authorized service center network. This enables ExelTech to participate in its heavy maintenance and modifications MRO network program for the new-to-market SSJ100 aircraft program. In this way, SSJ100 customers will enter service with a quality airframe maintenance services network in place, with a well-recognized MRO provider strategically located according to market needs, and with a strong understanding of the regional aircraft services market.
“This is very much in line with our vision to provide a timely, quality maintenance product at a fair price to the regional aircraft marketplace,” Donald Kamenz said at the time of the announcement.
SuperJet International, based in Venice, Italy, is a joint venture between Alenia Aeronautica, a Finmeccanica Company (51 percent) and Sukhoi Holding (49 percent), in charge of marketing, sales, customization and delivery of the Sukhoi SuperJet 100 regional jet in Europe, the Americas, Oceania, Africa and Japan, as well as of worldwide after-sale support. SuperJet International is also responsible for the design and development of VIP and cargo variants. A SuperJet International branch is already active in Moscow, together with sales offices in Toulouse, France and Washington, D.C.
The first two Sukhoi SuperJet 100 series aircraft have been recently delivered to the M.M. Gromov Flight Research Centre in Zhukovsky for Flight Certification Testing.
GROWING BIG AND STRONG
“We started as a mom and pop operation, and went public and now we’re moving to larger airlines with requirements that are more stringent,” Kamenz says, noting that the added responsibility has come about through ExelTech’s three-legged stool of quality, price and turn-around time. “The biggest thing is getting the aircraft back into the customer’s hands fast; otherwise, they could experience a $15,000-$40,000 loss daily. We’ve been successful in reducing return time. When we did the Embraer 170 we turned it in 12 days as opposed to our competition’s 18 days. When we promise that you’ll have it we live by that promise.”
And you can bet on his word. According to a case study on the company’s Web site, ExelTech mobilized for action following a call from Jay Perez, Continental Express Director of Logistics, after a tug hit an ATR42 sitting on the ramp at an out station, leaving major structural damage. He was on the phone to ExelTech within the hour. The company’s planning manager, Serge Brochu, knew there was a lot of work to be done after viewing photos of the damage that had been emailed. But a customer also needed help. The aircraft was ferried to Montreal the same day.
Weekend plans were cancelled and everyone went straight to work. The aircraft fuselage was braced to prevent any potential bending. Then the interior was stripped. Work entailed replacing Frame 3 and Frame 4. Frame 5 was also damaged but it was repairable. Two skins had to be replaced and a third had to be spliced. All the work was done in-house by ExelTech except for the two new fuselage skins, which were shipped from France.
The aircraft was back on the line less than four weeks after it arrived at ExelTech. “I don’t know anyone else who could have turned this around so quickly,” Perez said in recounting the incident on ExelTech’s Web site. “It was a job well done.”
And for such good work, the company is targeting revenues in 2009 of $50-$60 million, increasing to $60-$70 million for 2010. “When I joined in 2005 we were at $20 million,” Kamenz says. “Year over year we’ve had 30 percent growth a year, which has well exceeded the industry.”
The company’s goal, he adds, “is to be the leading regional MRO for all part 25-based aircraft and up to and including the 737 family.”