Germany’s Atlas Air Service Acquires Swiss MRO AAL

Credit: Atlas Air Service

Atlas Air Service has acquired Swiss-based AAL, a business aviation maintenance, repair and overhaul (MRO) operation. 

The deal, concluded at the turn of the new year, sees the Altenrhein, Switzerland-based AAL added to Ganderkesee, Germany-based Atlas’s existing MRO, continuous airworthiness management organization (CAMO) and charter operations in Bremen and Augsburg, Germany. Terms were not disclosed. 

The companies will continue to operate independently. But they will benefit from economies of scale while being able to provide new and existing customers with more comprehensive and responsive services, Atlas CEO Nicolas von Mende and AAL Managing Director Natascha Rode tell The Weekly of Business Aviation. 

“One of the most stressful situations for our customers is when they have an AOG (aircraft-on-ground) away from their base,” says Rode, who points out that the newly combined firms are five times bigger than the hitherto independent AAL. “With our network now, working very closely between the three centers, we will provide much faster response to any AOG situation.”

“In some areas, some business activities, it is better to be a larger entity,” von Mende says. “For example, marketing. For our trade show participation, we can combine our efforts and be there much more efficiently. Another advantage is the warehousing of spare parts. Between the group, we now have three warehouses, and therefore the availability of spare parts for customer aircraft is three times what it was before.”

There will be no job losses as a result of the merger. Indeed, the combined companies will need to expand. 

“We expect to have a stronger position in the market, a better position against our competitors, and therefore we will have more customers,” von Mende said. “More customers means we have to look for highly qualified technicians to serve these customers.”

Attracting and retaining skilled maintainers will remain a challenge, but the enlarged group now has new opportunities to develop its workforce which did not exist prior to the merger. 

“We can bundle our training needs,” von Mende says. “For example, we can set up a training course at one of our facilities. We don’t have to send technicians to the United States or to other training centers, but can ask a trainer to come to our facility and train our staff on the job in the hangar. This is only possible if you have a minimum staffing in that training course.”

The decision to continue to operate the companies independently under the same umbrella is informed both by practical pragmatism and prior experience. 

When Atlas absorbed the former Beechcraft service center, Augsburg Air Services, it continued to operate independently within the larger group—a construct that proved beneficial to the combined companies. 

With AAL being not just outside Germany but outside the European Union, different legislative and regulatory protocols apply, limiting the degree to which greater integration may be possible. 

“For example, at Atlas, we have a very modern IT [information technology] system for maintenance,” von Mende says. “We have two experts who know how to run that system. We introduced this system in Augsburg, and Augsburg has a huge advantage because we do not have to pay external consultants to introduce the system. If Altenrhein decides that the system we use here at Atlas is better than the current system, Altenrhein can ask, and we will be happy to provide the service to implement that new IT system. And the same is the case for personnel training or for marketing. In all these overhead functions, we at Atlas perceive ourselves as being a service provider to our subsidiaries. And if the management sees this as an advantage to ask for our services, then we will provide them.”

The background to the merger goes back around 18 months, though the companies’ management teams knew each other for many years. The COVID-19 pandemic played some part in the decision, though it was not the only consideration. 

“In March 2020, I was very unsure how this corona situation would end up,” von Mende says. “But by summer 2020 our confidence in the growth path for the industry was restored, and therefore we started discussing with the previous owner about the acquisition of Altenrhein. There were several strategic reasons to think that this company is the perfect fit for the Atlas Group.”

“As management, we were very, very supportive for this deal to take place,” Rode said, noting that AAL’s previous owners were looking to sell as part of a decision to concentrate on their core business of aircraft sales. 

“I have been in aviation all my life,” she adds, “and I have noticed for a long time that only really big companies will have a future. We are a single company in Switzerland, with a higher labor rate than in surrounding countries. We’re very happy to have such a big company behind us.”