Maintenance business

Aircraft maintenance is the Air France-KLM Group’s third business. In addition to the services provided to the Group fleets, this activity generates more than one billion euros of revenues with third-party customers.

An attractive market despite the growing constraints

In 2012, the global MRO market comprising maintenance and modification spending by aircraft operators on their own account or through sub-contractors stood at an estimated at US$53 billion (source: ICF SH&E). Trends in this market tend to mirror those of the airline fleets globally and their usage patterns. In the short term, this market is more sensitive to variations in older-generation fleets than to those comprising new generation aircraft due to technological advances and a maturity effect. Due to the economic crisis, the market was adversely affected by the adjustment measures adopted by most airlines including a reduction in flight schedules, route closures and the early retirement of the oldest aircraft. These effects persisted throughout 2012, particularly in the European market.

Even fiercer competition

The crisis has led to a shake-out among market players with the portfolios of some of Air France-KLM’s competitors seeing a significant deterioration as older-generation fleets have been phased out. These players are now moving energetically into new-generation products, on which AFI KLM E&M itself is especially well-placed. At the same time, aircraft, engine and equipment manufacturers are aggressively developing their after-sales services on this market by offering clients increasingly-integrated maintenance solutions.

Affirming AFI KLM E&M’s position as a global leader

With its position as the number two global player in the multi-product MRO area by total revenues, AFI KLM E&M is pursuing its strategy of targeted growth based on its own specific characteristics and the Group’s overall objectives. The strategy is two-pronged and aims, firstly, to reduce costs and sustain a high level of quality and performance and, secondly, to build the third-party client portfolio in high value-added products and services. In 2012, a number of adaptation projects were launched to speed up the process of restoring competitiveness in the Aircraft Maintenance sector. These cost-saving initiatives rely on optimizing site-specific activities, prospecting for external partnerships and implementing more effective work structures. The initiatives will be backed up by efforts to adjust resources to activity and create new career paths. There are three priorities in the Engine and Component segments namely the ability to finance lasting growth in these profitable business activities, positioning on products and services tailored to market expectations and the development of a global MRO network in high growth regions.

Contributing to flight safety programs and operational performance

AFI KLM E&M’s primary task is to guarantee the airworthiness of the Group’s fleet and oversee regulatory compliance. To this end, AFI KLM E&M steers the management of the technical data, implements the maintenance policies, and ensures the permanent availability of the required skilled staff and technical resources.

AFI KLM E&M: an international network tailored to local requirements

Maintenance_moteur

AFI KLM E&M is pursuing its growth strategy on profitable markets and segments by deploying its network of subsidiaries (EPCOR, CRMA, KLM UK Engineering, AMG) and partnerships (AMES, ATI, Spairliners, MAX MRO Services, AAF Spares), and leveraging the power of its global logistics network. The development of this MRO network is in line with the objectives of the Transform 2015 plan. It guarantees AFI KLM E&M clients local access to the Group’s full array of services, tailored solutions and local spare parts inventories.

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