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Winnipeg Free Press - PRINT EDITION

Aerospace company flying high

StandardAero expands again

By: Martin Cash

17/09/2009 1:00 AM | Comments: 0

A worker details a jet engine at StandardAero Wednesday. Employment is expected to increase as a result of new work. (PHIL.HOSSACK@FREEPRESS.MB.CA)

StandardAero is breaking ground today on its latest expansion: a $13-million, 27,000-squarefoot effort this time around.

It is becoming something of an annual occurrence for the largest independent gas turbine engine maintenance repair and overhaul (MRO) operation in the world.

A year ago, there was an 80,000-square-foot, $20-million expansion to handle an increase in work Standard does for a line of General Electric engines that power Bombardier and Embraer regional jets. This latest expansion, however, is far more significant than the square footage or dollar amount would suggest. It was made necessary because of an $850-million, 12-year contract StandardAero has signed with WestJet to service the General Electric engines on the Calgary-based airline's fleet of Boeing 737 jets.

The deal, announced in June, is massive in and of itself, but it also adds a new repair licence to StandardAero's portfolio that gives it the opportunity to compete for business on engines that power commercial airlines around the world.

Mike Turner, StandardAero's director of communications, said the new expansion will be integrated with last year's so that each of the new facilities will be used for both engine lines.

"There are core elements from both engines that will be integrated into the same cells," Turner said in reference to StandardAero's innovative cellular work stages.

It has been StandardAero's strategy for some time to break into the market for engines that power the larger passenger jets and Turner said it is already working on a plan to pursue other work on the engine, called the GE56-7B. Not only does the new engine add lustre to StandardAero's reputation, but it happens to be the fastest-growing engine in use in commercial aviation.

Some estimates have the number of GE56-7Bs in use tripling by 2018.

That doesn't mean StandardAero's work in that category will triple over the next 10 years, but it does mean there will be solid demand for a service for which only a very few suppliers exist in the world.

Considering the high levels of quality assurance demanded by international commercial aviation regulators, it does not take a manufacturing expert to understand the barriers to entry for such a service would be massive. And StandardAero, owned by Dubai Aerospace Enterprise, has emerged as a solid competitor, even after the commercial aviation and aerospace industries have sustained massive turbulence through the recession.

When it comes to employment, some aerospace clusters around North America have been decimated with places like Wichita, Kansas, losing almost half of its aerospace workforce.

Employment across StandardAero's global operation -- which, since its purchase by DAE in the summer of 2007, also includes the former operations of Arizona-based Landmark Aviation -- is down a modest four per cent. But in Winnipeg, its workforce continues to grow. The WestJet work, which is expected to start showing up on StandardAero's shop floors in about a year, will mean its local workforce is expected to hit 1,500 by 2012, an increase of about 200 people from a year ago. The timing of StandardAero's latest expansion coincides with the announcement today of the first CEO of CentrePort Canada, Diane Gray, currently Manitoba's deputy minister of finance.

That signals the beginning of the journey of transforming the inland port concept into what some are predicting will be the most important economic driver in the city for the next several decades.

The hundreds of millions of dollars worth of development taking place at the airport -- most of it committed to prior to CentrePort's creation -- sets the stage for a 21st-century inland port colossus that is being envisioned for CentrePort.

Among other things, the concept includes locating aviation and aerospace-related manufacturing activity at the site. CentrePort couldn't ask for a better poster child in that regard than StandardAero.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 17, 2009 B5

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