Marcos Rosales
Director General and CEO
Mexicana MRO Services
View from the Top

From Survival to Stability, then Growth

Thu, 12/01/2016 - 14:59

Q: How did Mexicana MRO overcome Mexicana de Aviación's bankruptcy?

A: Mexicana MRO was created in 1987 to provide maintenance services to Mexicana’s fleet. It became an independent company in 2007. While Mexicana MRO worked mainly with the airline’s fleet, it gradually started to incorporate new clients. Throughout 2010, the workshop ran at minimum capacity and the MRO suffered many economic and operational difficulties. That year, the airline filed for bankruptcy and underwent a bailout that ultimately failed. By August 2010, Mexicana had stopped operating as an airline but our external clients gave our workshop the opportunity to continue running our MRO operations. In 2014, highly unfavorable economic, financial and operational conditions pushed us to rapidly identify cost-saving areas. Although client retention was not very high in 2014, this started to change by 2015 and we closed the year with 95 percent client retention.

Q: What new services is Mexicana MRO planning to introduce to its offering?

A: We are maintenance service providers for airplanes, mostly performed at our overhaul workshop. Our service portfolio includes maintenance, repair and back shop component repair services directed mainly at Airbus’ A320, A318, A319, A321 and A330 and Boeing’s 727, 737, 757 and 767. Over the years, we have developed capabilities to service the Fokker 100 as well and are now working to incorporate other fleets. In September 2016, we inaugurated the second Airbus Virtual Training Room for A320 in Latin America, which will also provide training for the A320neo and the A330. Afterward, we will start a similar project for the Boeing 787, a state of the art aircraft built with composite materials.

The growth of the aviation industry in Latin America has reinforced our own. Locally, we have cultivated partnerships with VivaAerobus, Volaris, Aeroméxico and the Federal Police, which are now our main clients in Mexico. Our largest market outside of Mexico is South America, representing 40 percent of our clients. We also have clients in North America, many of which are leasing entities, as well as in Europe and in South Africa. We are negotiating several contracts to increase our involvement with airlines to expand our 6.5 production lines to 8.5 during 2016.

Q: What is your current position in Mexico and what is your strategy to reach new clients?

A: Mexicana MRO is the largest MRO in Mexico and is in the Top 5 for Latin America. We also possess the largest number of certifications in this area, allowing us to provide services to 16 different countries. The three main certifications we hold are from the DGAC in Mexico, the FAA and the EASA.

Mexicana MRO’s competitive advantage is the reputation we have acquired over the years, consolidating our technical capacity, skills, certifications and quick response time. Our turnaround time is very competitive because clients compare our prices to MROs based in the US that focus on materials and components, while we focus on the sale of technical hours and labor. Another competitive advantage is having two platforms, giving us the flexibility to handle a large number of planes at once and to provide overnight and line maintenance at short notice. While some major airlines have their own hangars we are the primary service providers for all other airplanes that arrive at AICM.

Q: How will NAICM impact Mexicana MRO and how is the company preparing for it?

A: We will move operations to the new airport as soon as possible. Our goal is to increase Mexicana MRO’s assets in AICM as much as possible before putting it up for sale as a business unit. The strategic growth plan developed for the period up to 2018 will be presented to the new buyers of the business unit after which we will open facilities in NAICM.

For Mexicana MRO, 2014 was a survival test, 2015 a year of stability and 2016 is the year for reinforcement and growth. Mexicana MRO is a completely separate entity from Mexicana airlines, so while the airline’s bankruptcy affected us considerably, we are working to solve these problems and expand our client portfolio.