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not after anything in my mind.”
Jim Keenan, svp and general manager of
Pratt & Whitney’s commercial MRO services,
is upfront about where the business is
headed. He is directing a four-part strategy
that aims to more than double revenues by
2009 excluding spare parts.
The plan calls for:
• Increasing Pratt’s market share in
overhauls and services for its own engines
from an overall 17%.
• Winning market share in overhauls
and services on V2500 and CFM engines.
It currently has 20% of the V2500s and is
aiming for 30%. Boosting its CFM share
from five percent to 10% by 2008.
• Bringing new solutions to the marketplace.
“Some will be through acquisitions
as the industry consolidates, and some
through identifying integration opportunities
in providing for engineering,
logistics and planning for our customers,”
said Keenan.
• Continuous upgrading of current
engines to enhance time on wing, reduce
maintenance costs and lower the total life
cycle cost of ownership.
Keenan joined Pratt two and a half
years ago from United Airlines, where he
ran the airline’s engine overhaul and
engineering businesses. His move underscores
Pratt’s strategy to infuse MRO
services with a customer perspective,
indeed to focus on each customer’s
unique business problem and to build a
unique solution for each.
Keenan notes that industry has taken
over from airlines in developing the cutting
edge of MRO service technology; it
takes an OEM with deep pockets and critical
mass to advance the art with such key
tools as advanced diagnostics, performance
monitoring and proactive troubleshooting,
and to lean out the supply chain with
sophisticated ERP systems. Airlines, especially
today, are increasingly unable to
make the investments needed to compete
with OEM-developed business solutions.
Pratt’s perspective is also influenced by
the joint venture partners it has in eight of
its 16 overhaul centers around the world,
says Keenan, as well as by independent
overhaul shops that are also its customers.
“Our strategy is to not drive our own
solutions but to receive input from our
customers and build our solutions
around that.”
United Airlines had a unique problem
when it came to Pratt: it didn’t know how
large its fleet of V2500-powered A320s
would become, and it wanted to avoid
investing in its own facilities after the warranty
period ended. The A320 is now the
single-aisle backbone of the airline, which
last year signed a record $2 billion, 10-year
comprehensive fleet management program
with Pratt covering more than
300 engines. Pratt has responsibility for
in-flight monitoring, diagnostics, fleet
management, engine overhauls, managing
all the material from those shop visits, and
the logistics of ensuring spare engines
when and where needed.
Delta Air Lines needed a different solution.
The airline has its own PW2000 and
PW4000 overhaul facilities for Delta and
third party work but realized that materials
management is not a core competency.
So it signed a materials management contract
under which Pratt supplies materials
at a fixed price per hour, decides the extent
of a repair and whether parts should be
new, used or serviceable. “We manage it all
for them,” says Keenan. “When they need
a part we give it to them with a turn time
that is very aggressive, allowing them to
achieve world class turn times.”
The advent of the virtual airline has
found Pratt taking over not only the
overhaul function but also, in many
cases, performing many of the actual
management functions that would traditionally
be embedded in an airline. Even
at legacy carriers a fleet management
program can involve active management
within the airline and a partnership role
in its day-to-day operations. This is
where Keenan sees opportunities for
integration services.
“Outsourcing can bring airlines high
value high quality services at a lower
cost than they can deliver to themselves,
but a lot of management infrastructure
and coordination remains. To be able to
provide more, broader solutions, and
management and integration of those
solutions, allows another step change in
terms of cost reduction opportunity,”
he believes.
“At Pratt & Whitney we are uniquely
equipped to provide comprehensive integration
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