Fast 5: Turkey-Based Total Technic Explores JVs, Capability Additions
Salih Zeki Ozturk, CEO of Turkey-based MRO provider Total Technic, discusses how it has overcome the challenges of recent years the company's plans to look at potential joint ventures and enhance its repair capabilities.
How did the COVID-19 pandemic impact Total Technic’s maintenance operations?
The COVID-19 pandemic proved to be the most severe crisis, leading to significant disruptions in global flight operations with much of the aircraft fleet affected worldwide. As a result, Total Technic experienced a substantial drop in annual revenue (approximately 50%) and encountered numerous challenges during this unprecedented time.
One of the most critical challenges for us was ensuring the job security of all our employees and instilling confidence in them that we would endure the crisis. Initially, our repair shops were completely closed for only 20 days in March 2020, but we gradually resumed operations based on customer demands and expanded our workload shop-by-shop throughout the year.
The decline in air travel and reduced demand for maintenance services posed additional challenges for us. Disruptions in the global supply chain also had an impact on our operations. Delivery of spare parts was also delayed due to the grounding of passenger aircraft.
What strategies did Total Technic employ to overcome the challenges posed by the pandemic?
We swiftly adapted to the decline in demand for component repairs, especially for time-expired components - such as slides, fire extinguishers, and batteries - by diversifying our services to include storage and preservation solutions for grounded aircraft. This strategic move not only provided a steady revenue stream for the company but also instilled confidence in our employees regarding the company’s survival amidst the uncertainties of the pandemic.
We implemented robust supply chain management practices to ensure efficient operations. We closely monitored spare parts availability and established strong relationships with alternative suppliers, minimizing disruptions. Agile decision-making also played a crucial role as we closely monitored the market trends and customer needs. Additionally, our engineering team was focused on expanding our capability list to include new part numbers requested by our customers. Furthermore, to enhance our service offerings, we acquired a complete line maintenance station from one of the MRO, which was closing its line maintenance station in Frankfurt, Germany. That enabled us to establish EASA-approved line maintenance capability for Boeing 737,777 and Airbus A320 and A330 aircraft. Overall, the pandemic presented us with an opportunity to improve our facility, capability and capacity.
As MRO demand grows, are you looking at partnerships or capability expansions?
We consistently receive demands from investment companies and aviation entities for our specialized know-how in emergency equipment such as slides, fire extinguishers, and oxygen systems. Currently, we are engaged in negotiations with companies from the Middle East and the United Arab Emirates to establish repair shops, potentially from joint ventures. Although, these discussions have yet to be finalized.
Our goal is to become a prominent provider of aircraft component repair and line maintenance services in the long term. To realize this vision, we are committed to investing in advanced technologies, facilities and ongoing skills development for our workforce. We are actively looking for strategic collaborations with industry stakeholders to contribute to shaping industry standards and driving industry advancements.
Since its inception in 2003, Total Technic has expanded its operations to three locations in Turkey. We have component repair shops at Istanbul’s Ataturk Airport, line maintenance services at Istanbul Airport, and both component and line maintenance facilities in Antalya, Turkey. With all the necessary capabilities for heavy checks, the next step for us will be incorporating hangar facilities for heavy maintenance.
What measures has the company taken to address supply chain challenges and its effect on turnaround time (TAT) for component repairs?
Total Technic, like many other companies in the industry, has encountered supply chain challenges that have impacted our TAT for component repairs. The pandemic and its associated disruptions have caused delays in the availability of spare parts and components, resulting in extended repair processes.
To address these challenges and expedite repairs, one of the strategies we are considering is increasing the annual procurement of spare parts based on anticipated demand. By doing so, we can minimize shipping and customs costs, ultimately ensuring that our customers receive their repaired components on time. However, our ability to implement this strategy is currently limited by financial constraints and the need to order spare parts for 20-30 components at a time.
Additionally, one of our key focuses is the implementation of lean and efficient repair practices. Through continuous evaluation and optimization of internal processes, we identify and eliminate bottlenecks. Also, effective communication and collaboration with our customers is paramount. By engaging in clear and timely communication, we gain a comprehensive understanding of their specific needs and requirements. This enables us to proactively plan and allocate resources, facilitating faster TATs.
One of Total Technics' core capabilities is component repair services. How is demand for component repair services evolving in the region?
The demand for aircraft component repair in Turkey has undergone significant transformations in recent years. To meet and surpass industry standards, we have made consistent investments in infrastructure, certifications, and highly skilled personnel. Additionally, the emergence of new aircraft models and technologies has necessitated specialized expertise, which prompted us to invest more in training and equipment.
The company’s expansion to Antalya a few years ago and the recent addition of line maintenance services have allowed us to not only capture an increasing market share but also expand our geographical reach. Notably, we have acquired new equipment for two additional shops: one for hydraulic actuator repairs and the other for hydraulic pump repairs. We are optimistic about obtaining EASA approval for these shops by September.
We also understand the importance of a skilled workforce. Thus, we provide regular training programs to our technicians, ensuring they remain up-to-date with the latest industry advancements. Additionally, we have also signed agreements with some aviation colleges to attract talent. Through these agreements, we offer employment opportunities to graduates and provide them with practical experience in our shops alongside our technicians.