ITP Aero Looks To Tap Engine Aftermarket Potential

ITP Aero CEO Eva Azoulay talks with Inside MRO’s James Pozzi about how the engine and component manufacturer aims to broaden its capabilities across multiple commercial engine types and eventually grow its aftermarket offerings.

Nearly one year after being appointed as CEO of ITP Aero, what are some of your near-term goals for the business? ITP Aero has built solid foundations over 35 years and across several engine programs such as the EJ200, Rolls-Royce Trent programs, for which we have developed some of the core parts for many years, and most recently, the Pratt & Whitney Geared Turbofan (GTF), for  which we manufacture numerous structural, critical rotating components and external components and most recently secured a new contract to manufacture combustors. Having joined the company last year, I’m looking at how we look forward as an independent company for the first time in our history and how we open doors to go out to the market and our capabilities to a broader group. How do we continue to  grow with all major engine OEMs, how do we look at a broader spectrum of OEMs where our capabilities can add value. Another big area is the lifecycle part. Before, our ownership structure limited our ability to play on the aftermarket, and this is where we think we can also have a lot of value. (Editor’s note: Rolls-Royce agreed to sell ITP to Bain Capital in 2021.)

Which parts of the aftermarket do you think present good growth opportunities? ITP Aero has around 1,500 engineers and a strong operation that works with most engines and it’s no secret where the engine aftermarket needs in terms of capacity and capability. It doesn't matter which product whether it's the existing in service engines or the brand-new engines – there is a big need for services. We believe we can provide some of that capability to the market in different ways, whether it’s repairs, hospital shop visits, or even full overhauls, so we are very focused on growing those aftermarket capabilities.

Was ITP Aero’s acquisition of Irving, Texas-based engine parts specialist BP Aero in February an early indicator of this aftermarket focus? Absolutely. We do have a strong footprint in Spain where we do maintenance repairs and overhauls but this work is mostly for the Spanish defense forces today. When we laid out our strategy last year on engine component repairs, we looked at building capability and access to specific markets. The U.S. market is a very significant one, but we didn’t have much of a footprint there. Acquiring BP Aero gives us access to that market while on the capability side, giving us hospital shop, component repair, and teardown capabilities while also opening us up to more engine programs in CFM International’s CFM56 and Leap engines. This acquisition was about expanding what we can do and presented a very good fit for ITP Aero. We will continue to look at how else we can complement our global footprint while adding more capabilities that enhance our services. In addition, earlier in September we appointed Alan Jones, to lead our MRO business globally. Alan brings a very solid track record of working for 30+ years in the aftermarket.   

What is the contribution of aftermarket services to ITP Aero’s business now? Commercial MRO is a small percentage of the business. We are the preferred service provider for the Spanish Defense forces, a role we don’t take for granted, however on the commercial front opportunities were limited due to our previous ownership structure. But now we are rebuilding our commercial products in not just commercial aircraft engines but also in helicopters and business jets. In the past year, we became a designated overhaul facility (DOF) for MRO of PW200 engines at our facilities in Albacete, Spain, while also servicing General Electric CT7/T700 engines. In business jets, we recently signed an agreement for the repair of the mid-turbine frame and low-pressure compressor modules of the PW800 engine for the Gulfstream G500 and G600 aircraft. As we continue to rebuild our product line, we aspire to make the aftermarket an increasingly important part of the business.

For commercial engines, much of the future demand will be generated by narrowbody engines, but given the widebody expertise related to Rolls-Royce programs, where will you look to steer ITP Aero’s focus? We are talking to all the OEMs and the fact we already have capability for both widebody and narrowbody engines helps us. We understand the Rolls-Royce customer base especially well, given our design and manufacturing expertise on many of their programs including the latest generation Trent engines, while also having a deep understanding of the widebody engine market. Similarly, this is the case for the GTF in the narrowbody segment and some of the work we do for manufacturers in business aviation. We will not limit our scope – it’s all about where the need is and how our capabilities can best meet those needs and then deciding exactly where geographically we should be positioned, whether that’s in Europe, the U.S. or somewhere else. That need could be for full overhauls and we're looking at that, but we believe that component repair is a key area, not just in the execution of these repairs but also in their development. There's a widespread market of component repair specialists, but there are not a lot of companies out there with access to around 1,500 engineers which would give us scope to do the development of parts repairs as well as the execution of them.

Will building up your services require more in-house capacity for ITP Aero or will it be able to utilize what it has available?

There will likely be a bit of both. At our facility in the outskirts of Madrid, we run a fairly large MRO facility which is where we do the Spanish defense maintenance and have the capacity for more work volumes and could move things around quickly. To build a new MRO facility usually takes at least two years and requires a large investment in equipment and tooling, but we are equipped on certain engine programs. Existing capacity is there and then as we understand the needs of the market, we will look to make future investments. In addition to the facilities in Europe and the U.S., we also have a facility in Mexico which had its origins in MRO having carried out maintenance on Pratt & Whitney JT8D engines which still has a fully operational test cell. Having that broad landscape also gives us access to the skilled labor we need. From an industry point of view in my view, the talent pipeline is the biggest focus when meeting the ramp ups we need to do – there are thousands of shop visits projected in a very short window of time.

The workforce issue is wide-reaching. What do you identify as the biggest challenge within this pillar of the industry? The biggest challenge relating to talent is not just about how you bring people in but also how can you train them fast enough. The traditional model was normally one expert technician training a handful of people but given the numbers required, that's just not fast enough for what we're going to need for support in the field. The industry needs to think differently about training and utilizing technology as it looks to ramp up its people. As a company, our reputation is strong in Spain and while still a competitive labor market, we’ve done a good job of retaining our talent. In Mexico, it is a more competitive labor market. We've invested over the last 25 years to continuously grow the scope of work and capability in that facility and make it so much more than merely a parts manufacturing facility. There, we do complex manufacturing and engineering and supply chain functions and we’re even duplicating our castings capability in Mexico – these factors are all appealing to growing the workforce. In the U.S., the labor market is even more competitive and the BP Aero business has focused heavily on both attracting and retaining talent. For the overall ITP Aero operation, we added around 10% more people last year and currently, we employ around 5,500 people in the business. We expect that number will grow by another 10% this year, so building up the workforce is a big priority.