MTU Zhuhai Adapts To Market Conditions

Next expansion of MTUs Zhuhai MRO facility will add 50% more capacity

MTU Aero Engines, preparing for continued growth in narrowbody engine overhaul demand, is making short- and long-term plans to expand its Zhuhai engine maintenance facility, increasing annual capacity to 450 shop visits in short order.

"The market is booming,” Frank Bodenhage, president and CEO of MTU Maintenance Zhuhai, tells Inside MRO. “There are a lot of engines available.”

Opened in 2001 in a joint venture with China Southern Airlines, Zhuhai focuses on International Aero Engines V2500-A5s and CFM International CFM56-3s through -7s. An expansion in 2012 took annual shop-visit capacity from 200 to 300; the facility inducted 280 engines in 2017. 

In recent years, shop visits were split roughly between the two engine families, but changes in the marketplace have boosted V2500 demand in the last year or two, with the V2500 edging closer to 60%. MTU, which captures about 35% of global annual V2500 overhaul demand, responded by adding V2500-A5 capability at its Richmond, British Columbia, facility last year and is making bigger plans for Zhuhai.

The first steps, Bodenhage says, involved freeing up some existing space. Zhuhai relocated some spares and materials it had been holding for customers to a third-party logistics provider. This cleared about 5,000 m2 (54,000 ft.2) he said—enough space to add some overhaul capacity and handle demand through the end of 2019.

In 2020, “we will build again,” Bodenhage says. Analysis and preliminary design work is underway, with a goal to have annual capacity of up to 450 shop visits by 2021.

One key to Zhuhai’s success is the shop’s flexibility. Unlike some overhaul facilities with dedicated, model-specific maintenance lines, Zhuhai is set up with general task areas, such as assembly-disassembly and combustor overhaul. Employees are trained to handle work on at least two engine types, adding to the flexibility that allows it to respond to rapid changes in demand, such as when more V2500s recently began to flow in.

"I cannot have separated lines,” Bodenhage says.

Zhuhai’s philosophy is shaped by customer demand. Carriers in the region tend to be more flexible with their overhaul schedules, allowing in-service time, not the calendar, to drive removals. If an engine scheduled for removal in one month still has green time, the airline is just as likely to keep flying it rather than stick to its overhaul forecast. This is less common in Europe or North America. The result: Shops like Zhuhai must be nimble enough to fill gaps their customers create, yet responsive enough to keep them happy—and their workers busy.

"We have to ensure we have engines coming in, even if the schedule isn’t down to the day,” Bodenhage says.

Having a diverse customer base helps Zhuhai manage volume. About 50% of its shop visits are generated by third-party customers—a rate that will grow as joint venture partner China Southern and its affiliate airlines need fewer V2500 and CFM56 overhauls. Zhuhai has its own sales team, but the shop also is fed work by MTU’s main commercial sales team based at its Hannover, Germany, facility, and it supports long-term agreements (LTA) that V2500 customers have with the OEM. 

In some cases, multiple MTU shops may support the same customer, but typically geography will determine where an engine goes. Zhuhai generates about 40% of its work from joint-venture partner airlines, but this figure is decreasing. About 20% is from other Chinese operators and 12% from elsewhere in the Asia-Pacific region. The rest is from around the world.

"We’re not a shareholder shop that is filled from our partner airlines,” Bodenhage emphasizes. “We have to be competitive.”

Zhuhai’s flexibility is a key differentiator. An even bigger one, Bodenhage says, is the depth of its capabilities. The shop can repair or overhaul about 80% of the parts numbers in the engines it serves.

"We don’t just disassemble engines and send the parts into our network,” he says. “We can do combustor repairs. We have our own plating shop, our own nondestrucutive testing.”

The greatest benefit of the heavy in-house capabilities: added certainty.

"We have more under our logistical control,” says Bodenhage. “We try to, number-wise, control as many parts as possible in our own processes.” 

The increase of Chinese aero engine MRO industry needs to stand on the shoulder of giants, needs to be open to the international leading companies and seek double-win working pattern through cooperation. CivilAircraft Operation Support Technology International Forum 2018 is the annual aero support event in China. The forum is aimed to accelerate the process of the Chinese aero engine development, sharing the technical breakthrough and barriers in the aero engine MRO phase.

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