Economic Advantages and Disadvantages: Aviation Maintenance and Repair Industry

The economic advantage that Goodrich ATS division has over its competitors is that the Goodrich Corporation that has deep pockets. It operates at a loss in the short run and break even in the long run. Goodrich ATS has downsized in the work force but never shut down during economic turmoil, unlike its competitors.

The internal economic advantages Goodrich ATS has over its competitors are the Goodrich Aviation Technical Services is located within three miles of Boeing. Goodrich ATS has onsite engineers who have been authorized by Boeing to approve minor engineering alterations on site with proper documentation. Boeing has a contractual agreement with the airlines that have bought planes from them to send their warranty claims to Goodrich ATS in Everett, Washington for evaluation and repair. The size of the facilities allows Goodrich ATS to perform component repairs in their own back shops, rather than outsourcing components to another facility. During my interview with Michael Zubovic, he stated, “The advantage to this is one stop shopping. Why take your planes anywhere else, when we can provide all your servicing needs right here including minor engine repairs to engine replacements? Our relationship with Boeing has given Goodrich ATS added value to its core customers.”

Goodrich Aviation Technical Services has its economic advantages and disadvantages both internally and externally. The rising costs of jet fuel and the location of Goodrich ATS has caused some customers to look for repair centers closer to their home base especially when aircraft are supposed to stop for an overnight stay for a turnaround inspection after four to seven days of flying. According to Kalyan Talluri:

Federal aviation regulations require that all aircraft undergo maintenance after flying a certain number of hours. Most major U.S. airlines observe the maintenance regulations by requiring that aircraft spend a night at a maintenance station after at most three or four days of flying. The maintenance routing problem is to find a routing of the aircraft that satisfies the short-term routine maintenance requirements. (1)

The longer the aircraft is on the ground, the more money airlines lose. Goodrich attempts to compensate for their geographical location by providing the highest quality available, extend credit to credit worthy customers, and to work closely with their own core customers.

When airlines pick repair centers, they not only look at quality and safety, they also look at aircraft turnaround time. Goodrich can only operate at full employment for short periods of time due to the unstable cycle of incoming work is unstable. Zubovic also stated, “The Everett, Washington plant employs 2,600 to 2,800 during the peak seasons with full benefits. This is usually around February to June. During these months, a typical mechanic can make almost $20,000 because of the overtime requirements.” It has been my experience that during the slow times, Goodrich typically does not layoff but encourages their employees to take their vacations during the down times and operate on a skeleton crew. If they have to layoff workers, it starts from the top management down to supervisors. Mechanics have a better chance of keeping their jobs because they are the ones that make the company money. To operate at maximum efficiency, the company went to a “lean process model.” This means that there is no wasted material, hanger space, or excessive walking to the parts and tool room. Everything is pre-organized at your work station to avoid waste. The company went to the extent of reevaluating each worker's talents and reassigned them accordingly.

Singapore Technologies Aerospace is one of the leading competitors of Goodrich ATS. This company also claims to be the world's largest third-party repair station. According to the home page for Singapore Technologies Aerospace:

Singapore Technologies Aerospace (ST Aerospace) is a global company with more than 5,000 employees around the world and a global customer base that includes many advanced military forces, seven of the world's largest airlines and the world's three leading freight carriers. As the largest, independent, third-party aviation Maintenance, Repair and Overhaul (MRO) with an annual capacity of more than six million man-hours, and extensive capabilities in engineering and development, engines, aircraft components spares, we assure our customers consistency in quality standards for all your maintenance and engineering services. (1)

Singapore Technologies Aerospace has similar products and services to Goodrich ATS, and they are both global companies. However, Singapore Technologies Aerospace has more engine repair and overhaul capabilities than Goodrich ATS. They can perform engine repairs and overhauls onsite rather than outsourcing, while Goodrich ATS mainly replaces engines with serviceable stock when repairs maybe too costly or beyond their capabilities. Both companies are global, but Singapore Aerospace Technologies caters to a more international customer base while Goodrich has a more domestic core customer base.