Aircraft Maitenance El Salvador

Aircraft Maintenance El Salvador

Sergio Castro, Fernando Haeussler, Augusto Martinez, Carlos Carranza,Mario Arteaga and Carlos Montoya.

1. El Salvador profile2. TACA & Comalapa’s Airport3. AEROMAN4. Aircraft maintenance cluster5. Diamond analysis6. Conclusions

Agenda

• Land area: Total: 20,742 km2• Population: 5,744,113 (June 2007 Census)• GDP (2007): Nominal Total: 20,372.6 USD

Million• Nominal Per capita: 3,546.7 USD• Real Growth: 4.7%• Economically Active Population: 2.3 million

El Salvador Profile

PROESA Information Kit El Salvador 2008


Agenda

• TACA is an international airline carrier headquartered in El Salvador.

• Fleet Size: 40 jets nearly all of which are Airbus models.

• Cities they serve: 40 destinations10 in North America, 15 in South America and the rest in Central America and the Caribbean.

• Hubs: San Salvador, San Jose and Lima

TACA

www.answers.com/topic/grupo-taca and ww.taca.com

http://www.answers.com/topic/grupo-taca

The hub at Comalapa International Airport makes connections between all of Central America and North America (Los Angeles, San Francisco, Washington, New York, Miami, Dallas, Toronto, Houston, Mexico City, Oakland) as well as Lima, Peru.

San Salvador Hub

www.answers.com/topic/grupo-taca and ww.taca.com

http://www.answers.com/topic/grupo-taca

Airport Connectivity

PROESA Information Kit El Salvador 2008

• Distance 50 kilometers from San Salvador, about 40 minutes.• 17 gates and more than 2 million

passengers per year.• With space for 17 airplanes on the main

terminal, 3 on the cargo terminal, 6 in Aeroman, and around 20 in the "Long Term Parking”. 94.5% of the airport's flights are on time.

El Salvador International Airport

ww.cepa.com

http://www.youtube.com/watch?v=s8BpM0KyqJo&eurl=http://www.skyscrapercity.com/showthread.php?p=24334980&feature=player_embedded

• The expansion of the airport will start in 2009.• By the end of that year, the airport will handle

4 million passengers • And will expand from 17 gates to 30 gates.

Airport Expansion

Modernization Project & Expansion

ww.cepa.com




Agenda

Aeroman

• Certified maintenance, repair and overhaul facility (MRO)

• Provides heavy maintenance services• Located at El Salvador International Airport, at

an economic free trade zone

History

• 1983: established as a Maintenance and Engineering Division of TACA

• 1992: became an FAA 145 Repair Station, providing service to third party companies

• 2006: Aveos Group bought 80% of shares– Canadian firm with 4 facilities at Canada– Leading MRO provider in the Americas

Present

• Airframe capabilities:– Airbus A318, A319, A320 and A321– Boeing 737 and 757

• Clients:– TACA, Jet Blue, US Airways, Donbassaero (from

Ukraine), Air Tanzania, and others• Services:– Airframe Heavy Maintenance– Engine on-wing– Component shops– Other specialized services

• Staff of more than 1500 people– Technicians in avionics, systems, structures and

composites– Engineers– Support departments and administration

• Operations:– 6 state-of-the-art bay hangars, providing service to

6 aircrafts simultaneously– 100 aircraft visits annually

Future

• 2012– 16 bay hangars– Staff over 5000 people– Total investment of US$120 millions


Agenda

Direct world competition

• This kind of clusters (aviation) are now the majority on develop countries

• On Europe, the Hamburg aviation cluster, on the USA, the Florida cluster, and in Asia Singapore, are the most important ones in the industry

• The El Salvador cluster is now emergent and attracting clients worldwide (First cluster in Latin America)

Pros and Cons of El Salvador

Pros•Low cost rent of facilities•Low cost labor•Flexibility on tax payment•Increasing institutions of training•Location•Actually has a industry hub

Cons•Technology•Hi training labor•Political instability•Low R&D•Low capital•Low development of financial markets

Strategic Partners

• This year (2009) the first free zone called San José Aviation is emerging in El Salvador with FDI from Costa Rica.

• With 69 acres, equivalent to 50 football fields • On march (the first stage), they started with 3

new companiesWill do maintenance to airplanes

Aviotrade Aviotechnology Storage Company

San José Aviation Free Zone

• This free zone is considered more like an strategy partner than a direct competition to the companies already established on the cluster

• We consider that it will help the cluster to develop and to be more attractive to the world aviation industry

Airlines

international maintaining companies and airlines

Repairing, warehouses, maintaining companies and airlines


• Those companies are going to work in two ways:

• In the future they want to establish the third way:

• This free zone believes that right now 40% of its production will be going to Aeroman

Repairing

Distribution of parts

Making parts in the country

http://www.laprensagrafica.com/index.php/economia/nacional/13999.html



• Also 30 companies have been chosen to be invited to come to the free zone

• On the positive points that this free zone offer:

Attractive

Training instituti

ons

Lots of worke

rs

Low cost

Leading MRO to attractLufthansa Technicks vrs. ST Aerospace

• Lufthansa facts:– Six divisions: Maintenance, overhaul, engines,

components, landing gear, VIP aircraft completion– 19,199 employees worldwide– 32 technical maintenance facilities around the

world– Market share of 15 percent– 660 customers worldwide– 2007 sales of $5.175B and EBIT of $452M (8.74%)



Leading MRO to attractLufthansa Technicks vrs. ST Aerospace

• ST Aerospace facts:– Two divisions: Aircraft maintenance & Modifications and

Component & Engine Total Support– 7000 employees worldwide– Facilities in the Americas, Asia Pacific and Europe.– Market share of 4% percent– Main clients: All Nippon Airways, FedEx Express, Japan

Airlines International, Republic of Singapore Air Force, Royal Air Force of Oman, UPS, Venezuelan Air Force, Northwest Airlines

– 2007 sales of $3.48B and EBIT of $440M (12.6%)Source: http://www.staero.aero

Leading MRO to attractLufthansa Technicks

• The world’s leading provider for maintenance, repair and overhaul (MRO) of airplanes, components and engine

• Specialized in Airbus A320, Boeing 737 (Classic and Next Generation)

• 2007, Investment in new facilities located at Shamshabad, the site of the upcoming Gandhi Hyderabad International Airport• $20Million in a two-bay hangars and its state-of-the- art workshop.• 20,000 square meters facility• Specially designed training program to develop qualified technicians

and aircraft engineers

• Lufthansa needs for this facilities 400 highly qualified personal

Source: http://machinist.in/index.php?option=com_content&task=view&id=1332&Itemid=2

B/E Aerospace:

• It is the worldwide leading manufacturer of aircraft passenger cabin interior

• Business Segment– Consumables -- distributor of aerospace fastener and

consumables, and stocks in 40 locations world wide– Commercial aircraft

– Seating manufacturer– Galley insert equipment– Offers a broad range of interior reconfiguration

– Business jet

B/E Aerospace:

• Other products:– Oxygen system, Lighting system, Structures

• Presence:– Florida´s aviation cluster

• Location products:– EUA, Canada and West Europe

• Location customer support:– Latin America, Middle East, Asia, Australia

• Awards:– Crystal Cabin Award 2009 Hamburg

Harris

• Communication and information technology sector

• Presence in 150 countries and 16,000 employees

• Provides customized critical components for air traffic control system – i.e. communications and weather system


Agenda

Context for Firm Strategy and Rivalry

Factor (input) Conditions Demand Conditions

Related and Supporting Industries Government

Factor Conditions

• Labor low cost: Entry-level mechanic at Aeroman earns $4,500 a year vs. $44,000 a year in Canada and veterans earn $15,000 vs. $52,000

• Universidad Don Bosco launched in 2005 a two year mechanics course

• Location (between North-America and South-America).

Fuente: http://www2.canada.com/montrealgazette/news/business/story.html?id=ebb07a17-0e73-42ba-9892-a36c52b8b7f5

Factor Conditions

Fuente: El Salvador 2008, Kit Investor Information Kit, PROESA

Demand Conditions

• U.S. main carriers outsource about 68% of their MRO (Maintenance, Repair and Overhaul). With 80% for low-cost carriers.

• "I do think we are going to see more North American work being done in Asia, Eastern Europe and Latin America, particularly with the wide-body aircraft," said Derek Nice, CEO of ExelTech Aerospace Inc.

Fuente: http://www2.canada.com/montrealgazette/news/business/story.html?id=ebb07a17-0e73-42ba-9892-a36c52b8b7f5

Demand Conditions

• Customers: Iberia, LAPA, Aerolíneas Argentinas, America West and JetBlue.

• Boeing (727, 737, 757 y 767), Airbus (319, 320, 321 y 300).

• Good service, low cost and delivery time.

• Southwest airlines planned to outsource to Aeroman.

Fuente: http://exploretacaairline.com/esp/article.html?pagesrc=archives&id=456 and http://travel.latimes.com/articles/la-trw-fixplanes30apr30

Context Firm Strategy and Rivalry

Fuente: http://www.weforum.org/en/initiatives/gcp/Global%20Competitiveness%20Report/index.htm

Related Industries

Fuente: http://www.elsalvador.travel/

• Universities• Airlines• Tourism• Airport Facilities• Free Zones

Government

• Investment Law to encourage specially FDI. • Benefits: – Include friendly procedures.– Equal treatment for all investors. – Liberty to make investment. – Transference of founds abroad. – Access to local financing. – Property protection and security.– Creation of the National Office of Investment (ONI)

as a dependency of the Ministry of Economy. Fuente: El Salvador 2008, Kit Investor Information Kit, PROESA

Government

• International Services Law.• Benefits: – Exemption of tariffs and duties in the introduction

of machinery.– Income tax exemption.– Exemption of municipal taxes on the company.– Exemption of VAT for the purchase of goods and

services.


Government

• Free Zones Law.• Benefits: – Income tax exemption.– Municipal tax exemption on the assets.– Tax exemption on real estate transfer.– Tax exemption on imports of machinery, lubricant

and fuel not produced in the country. – Free admision of raw materials.– No limits on foreign capital.


1. El Salvador profile2. TACA & Comalapa’s Airport3. AEROMAN4. Aircraft maintenance cluster5. Diamond analysis6. Recommendations & Conclusions

Agenda

Recommendations

• PROESA has to play an important role attracting more companies related to the cluster

• Plan to develop a new engineer career focus on aircraft technical maintenance

• Incentives to locate new companies closer to the airport

• Incentives to generate more competition between airlines to increase the demand for services to the cluster

Recommendations

• Keep Attracting important world aviation institutions to train local universities in aviation knowledge

• Implement English programs since first school years • Promote exchange programs with other prestige

institutions with MRO knowledge• The government has to make a better effort to

improve security to promote FDI

Conclusions

• The country has comparative advantages like geographic location

• Competitive advantages like the experience curve of more than 20 years

• The cluster must continue to attract companies that can add more value

Aircraft Maitenance El Salvador

Business

Transcript of Aircraft Maitenance El Salvador