In the Netherlands, home to more than 150 aerospace companies, MRO and logistics dominate: 66% of the €2.3 billion-plus ($3 billion) in aerospace and defense revenues in 2011 derived from the sector.

Although Dutch aircraft construction ceased in 1996, to secure its future, the country has invested in support infrastructure and technologies—innovative materials, advanced design tools and production processes, along with smart systems, such as wiring and information technology. The Airbus A380, for example, contains a Fokker Technologies material called Glare, which reduces its overall weight by 1,000 kg (2,200 lb.).

A focus on value-adding activities drives the way companies such as Fokker Services map the future. “I think the ambitions of the Netherlands are not necessarily always in the maintenance itself but also involving development, in materials and techniques and methodologies,” says President Peter Somers. Organizations such as the Netherlands Aerospace Group (NAG) market these strengths to meet the Dutch national aviation policy's lofty goal: to become one of the world's top three countries for MRO. It now holds about 1.5% of the global MRO market.

Location is one inherent advantage for the Netherlands, which lies in the center of Europe's three largest economies: Germany, the U.K., and France. From the country, 95% of Europe's major cities can be reached within 24 hr. by road. Its MROs have particularly expedient access to suppliers. “I'm right in the middle of a triangle between Frankfurt, Paris and Amsterdam, and that's where all of my [European] suppliers are, in that triangle,” says Constant van Schaik, CEO of Samco Aircraft Maintenance, a regional aircraft MRO at Maastricht Aachen Airport, situated less than 10 mi. from the Belgian and German borders.

Moreover, the Netherlands' track record of aviation expertise weighs in its favor. “One of the main reasons [the Netherlands is interesting to investors] is because there is a lot of experience here in MRO. KLM was actually the first airline in the world,” says Frank Jansen, NAG's managing director. “Because the majority of our aerospace activity in the Netherlands is MRO-related, there are quite [a number of] qualified personnel available.”

Jansen says the aerospace industry in the Netherlands employs 17,000 people, about 11,000 of whom work in MRO. As the country invests in training future mechanics, Jansen hopes that will move the MRO industry closer to its market-leading goal. He believes that training, plus cooperation among members of the industry, is the way to do that.

Central to this national strategy is a concept-in-progress of three distinct MRO clusters: locating commercial aircraft maintenance primarily at Amsterdam's Schiphol Airport, focusing on regional aircraft maintenance at Maastricht and homing in on military work at Woensdrecht Airport in the southwest.

The Maastricht plan was conceived six years ago by 20-25 companies that selected it as the best place to start, says Jaap Heukelom, senior project manager for business development and foreign investment at the Limburg Development and Investment Co. (LIOF), which directs the initiative. Its scale fits more with the small and medium-sized enterprise businesses that the Maastricht Maintenance Boulevard Foundation represents and markets at air shows. Because of its high efficiency, quality and low cost, the focus is regional aircraft and medium-size airlines, he says. Heukelom's goal is to double the number of MRO employees there to 1,000 in two years.

The presence of smaller companies at Maastricht has been beneficial to established companies, such as Samco. “For competencies that we don't have the volume on, I outsource right away, like welding and machine shops, complicated composites,” says Van Schaik. “That [enables you to] act quick on the demand in your hangar, instead of having your own capabilities and then there being a lot of costs when there is no work. [That's work that we previously sent] out of the country, so now I'm doing things closer by and focusing on it and working together.”

Van Schaik says the national initiative is “working well” in Maastricht, but others cite fundamental challenges to implementing the three-pronged strategy. “The majority of the work is in Amsterdam, and I think it will be for the future,” says Nayak Aircraft Services' managing director, Patrick Morcus. But, he adds, “there is connectivity between the Netherlands, and NAG is playing an important role.”

Even for companies not at one of the three target airports, the strategy could potentially boost business. Ruud Kleinendorst, managing director of NedAero Components, located in Zevenaar, near the Dutch-German border, says his business does not need to be situated at an airport. “With FedEx and UPS, components are brought to Zevenaar within slightly more than one hour from all these airports,” he says. “In a typical turnaround time of 14 weeks for component repair, this is no issue.” But Kleinendorst thinks the strategy will benefit the Netherlands as an MRO player, which will be good for his business.

“This specialization will lead to excellence centers for commercial aircraft, regional aircraft and military platforms,” he says. “In my opinion, this will increase the competitive position of the Netherlands as an aircraft MRO country.”

As for Woensdrecht, conceived of as a military center, civil work prospers there, too. Aircraft End-of-Life Services (AELS), an aircraft teardown and recycling company based in Delft, midway between Schiphol and Woensdrecht, has a facility there. “That's where we can fly airplanes to tear them down,” says General Manager Derk-Jan van Heerden. AELS added operations there in mid-2011 and has completed two projects at that location. Van Heerden says convincing customers to fly aircraft to Woensdrecht remains a challenge, but his business is seeing sustained growth.

Fokker Services' substantial sustainment base in the Netherlands includes not only its operations at Schiphol but also a maintenance base at Woensdrecht. “As we speak, we have [two concurrent] heavy-maintenance lines through Woensdrecht for Oceanair de Brazil,” says Somers. “They fly their Fokker 100s for six weeks to Woensdrecht, and we do the heavy checks, so the revenue we generate [in the Netherlands] comes from all over the place.”

For Fokker Technologies, the focus is on servicing its eponymous fleet while diversifying its capabilities. KLM still operates 26 Fokker 70s, but the Fokker fleet is concentrated in the Asia-Pacific region, says Somers. Fokker Services' new three-bay hangar in Singapore (where it services the burgeoning Australian Fokker fleet as well as ATR aircraft, for which it is an OEM-designated MRO) is humming at a rate of 50,000 man-hours annually. But its Woensdrecht civil-aircraft operation—resized during last year's lull and now seeing high-volume contracts come back, Somers says—will perform just over 200,000 man-hours this year. Its Fokker lines are booked through mid-2013 with Fokker 100s for Oceanair de Brazil and for Qantas subsidiary Network Aviation.

Somers's long-term focus is not on Fokker work, however. In addition to the Asia-Pacific ATRs, his company will perform roughly 50,000 man-hours on the Airbus A320, working closely with Dutch lessor Aercap. “It's an interesting shift of focus in Woensdrecht. and for the longer term. I think it's essential to have that capability,” Somers says.

Component MRO work is another area for cultivating new specialties, such as CFM56-5 independent drive generators (IDG). “We now have a current stream coming out of Snecma, so that's an area where we developed a capability that we had for the IDGs on the Fokker engines, the Rolls-Royces,” he says. “[The CFM56] is a high-volume engine, so that's definitely a growth area.”

Like Fokker Services, Samco sees a “reasonable chunk of work” from lessors as aircraft change hands. “We've got about 15 aircraft parked at the moment at our place [in Maastricht] for different lessors and owners and banks, and we do nose-to-tail support for operators and lessors when aircraft change hands,” Van Schaik says.

But work for Bombardier is increasing for Samco, as it is the Netherlands' endorsed MRO for commercial Dash 8 aircraft. “We do lots of Dash 8 work,” says Van Schaik. “It's a fair source [of business], not only for the Maastricht facility but also on-site at operators' locations throughout Europe and Africa, which gives a lot of spinoff.” Samco recently extended its capabilities to the CRJ1000, so that it now covers the whole CRJ series as well.

Netherlands-based Avio-Diepen, a partner on Boeing's Integrated Materials Management initiative, looks to supply-chain management services to add value for customers. Its ADvalue program “enables customers to concentrate on their core activities, such as component repair,” says Marketing Intelligence Officer Ben Nieuwland.

Nayak Aircraft Service in Amsterdam traditionally has been a line maintenance company, but it is extending into fleet management and IT solutions. Lufthansa, for example, flies to Amsterdam for aircraft overnights; Nayak has 60 airlines under such line maintenance contracts. But new growth, says Morcus, is coming via fleet-management arrangements, such as the one Nayak has with KLM.

Nayak also is launching a software package called Qlikview at Aviation Week's MRO Europe conference this week in Amsterdam. Used internally to link Amos maintenance management software with Netline and financial software systems, the company now is offering it to customers. “It's a shift of our company,” Morcus says, adding that such services will become more important in coming years with new-technology aircraft, such as the Boeing 787.

Nayak is developing capabilities for the 787, as it expects to be the second MRO in Europe (behind Monarch Aircraft Engineering) to receive Part 145 authorization to maintain the aircraft: Japan Airlines plans to operate a Boeing 787 at Helsinki in January; Nayak staff there will be qualified up to C-check level. The MRO also is preparing for 787 services at Amsterdam Schiphol and will be opening 787-capable stations in Stockholm and in Oslo.

Boeing 787 training also should be an incentive, Morcus says. “A trend I expect [is] that Nayak will be sending people from the Netherlands with 787 training as background to help engineers starting up airlines all over the world.”

In addition to JAL, TUI Group Dutch subsidiary ArkeFly is preparing for the arrival of its Boeing 787-8s, as well. Its wholly owned subsidiary Tec4Jets in Amsterdam will handle 787 line maintenance, says Simone van den Berk, communications manager. Tec4Jets also handles line maintenance for ArkeFly's five Boeing 737-800s and five Boeing 767-300s.

Like Nayak, Air France Industries KLM Engineering & Maintenance is readying for the 787. It has recently been added to the Schiphol base's component portfolio, says Paul Vonk, marketing manager. “Prior to the introduction of the 787 within our parent airline, we have a launch customer contracted and are in full swing ramping up our capabilities and building stocks and inventories,” he says.

Despite these expansions and although the Dutch aerospace industry has been growing at 5% per year, according to NAG, “it is a harsh environment for everybody,” says Ted van Zundert, sales and marketing director for Dutch aircraft, crew, maintenance and insurance company Denim Air. But he points to Bombardier's recently opened MRO center at Schiphol as a positive indicator.

The component MRO market is doing well, due to the stronger U.S. dollar and “bright innovations to improve turnaround time,” says Avio-Diepen's Nieuwland. That strength carries over to the aircraft teardown business. AELS's Van Heerden says this year's developments are going according to plan, particularly now that the dollar-euro conversion has improved. “Last year, we had the dollar-euro conversion, [which] for us was an important development of course, because aircraft components are sold in dollars, so if the dollar-euro is low, which it is now, that is good for us. Last year, it was pretty high.” This year, AELS had already completed six teardown projects as of mid-September.

The ambition for AELS, as Van Heerden puts it, reflects that of the Dutch industry: “What we try to do is add value to the project in total,” he says. Often that means branching into new lines of business.

Samco supports mobile repair teams throughout Africa from Maastricht. Fokker is widening its MRO portfolio and working with Denim Air and others on its FLYFokker program, assisting start-up airlines, and aiming to build work on the Bombardier Dash 8 series, under its strategic partnership with the OEM. Nayak is concentrating on fleet management and taking advantage of the opportunity to provide airlines with new data-monitoring tools.

Like the rest of Europe, the Netherlands' labor-intensive airframe work is migrating east. Nayak's Morcus says he's seen more widebody and narrowbody MRO work go to Eastern Europe and Malta. But this is not exactly news: Fokker Services' Somers says in his prior role at KLM E&M, he began to send MD-11s to China in 2002, and now KLM's Boeing 747s have followed suit.

“You see a shift [in the Netherlands] from labor-intensive to more value-adding activities, and I think component repair, modification development, logistics services—that's more where we have to find our future,” Somers says. “We can't deny the fact that the Netherlands, like our neighbor countries, is high cost. You have to find intelligent solutions where you create value for your customers to justify it.”