Return to BTJ Online

Component repair market rebounds after aircraft industry slump

ANNE STRAUB
Brevard Technical Journal

The Titusville company was moving to a new and larger facility nearby, at Space Center Regional Airport. Plans included building additional hangars and eventually doubling employment, to about 120 workers.

PAA, which repairs and overhauls parts for the aircraft industry, made the move to the airport. In July 2001, officials obtained permits to build the hangars.

Two months later, everything changed.

Professional Aircraft Accessories president Robert Bial has led the company back from an industry-wide slump resulting from the Sept. 11 2001 terrorist attacks.

Fortunately for PAA, the slump in the commercial market was partially offset by an increase in demand from the military. By the time the surge in military demand had tapered off, other business was showing signs of recovery.

“Business has come back strong in the past couple years,” said Robert Bial, company president. PAA has built its employee roster back up to 70. “Everything we said was going to happen, happened – but not in the time frame we expected.”

PAA’s roots extend to the mid-1970s, when the company was founded by a local family. The acquisition allowed Fairchild to capture the revenue of a repair center, so the company had a hand in the entire cycle of sale and refurbishment of airplane parts. The new owner invested in new equipment and added capabilities to the company’s offerings.

PAA’s move to the airport almost tripled its space, to 37,000 square feet. For now, the location at the airport has little practical application because parts that the company works on are removed from the aircraft offsite and sent to PAA. Still, customers like seeing a runway right behind the building. “The building is one of our best salesmen,” Bial said.

The location might have implications for the future, as well. PAA is interested in finding a fixed-base operator – without an overhaul shop – that’s interested in entering a joint venture at the airport. Together, the companies could service aircraft on site.

Federal Aviation Administration regulations require that aircraft parts be refurbished after a set number of cycles, or uses. Aircraft owners must send the parts, such as landing gear, to an FAA-approved repair center for service. PAA is equipped to check for damage, repair and test parts under simulated conditions.

Where new landing gear might cost $1 million, for example, the company can service the existing gear for about 10 percent to 20 percent of that, Bial said.

Component repair is a category of aircraft maintenance that’s frequently contracted to an outside company, said Marshall Filler, managing director and general counsel for the Aeronautical Repair Station Association in Alexandria, Va.

Repair centers have felt the effect of the decreased airplane capacity since Sept. 11 – a sort of flip side to the adage that a rising tide lifts all boats. “That can work in the reverse direction,” Filler said.

He sees carriers as in a period of trying to better use their resources to develop a profitable business model. The opportunities are there: “All the forecasts show that the number of passengers our carriers fly is going to increase,” he said.

PAA has built a reputation for its work on landing gear and has developed specialties by targeting specific aircraft. “We build on the wheels and work our way up,” said Bial, who joined PAA in 1998. He had worked as vice president of operations for Fairchild’s largest distribution subsidiary in South Florida.

Fairchild pumped money into the avionics side of the business, developing capability in repairing instrumentation. PAA now markets itself as a one-stop shop for aircraft part repair and refurbishment.

While major carriers are struggling financially, PAA relies more on the healthier regional carriers. Bial describes the customer base as 20 percent military, 30 percent business aviation and 50 percent regional airlines.

But there are still worries. Skyrocketing fuel costs could cut into business aviation, causing companies to sideline their fleet and fly commercially. “It’s a concern we have, that it will throw our industry back into flux,” Bial said of fuel costs. “But we’ve been through it before.”