Global Aftermarket Business Showing Signs Of Recovery, Triumph Says

Triumph Group saw both MRO sales and key leading indicators such as repair orders climb last quarter, suggesting that the commercial aftermarket recovery is gaining momentum.

Speaking to analysts on the company’s fiscal 2021 third quarter (Q3) earnings call Feb. 3, Triumph president and CEO Dan Crowley said “upstream” measures for all of its MRO work, including defense business, were up 11% sequentially for the three months ended Dec. 31, 2020 compared to the previous three months. Ten of the company’s 12 shops posted increases in repair orders, while another was flat. The only shop to show a notable decline was an interiors shop that is closing, with the work moving to its existing Hot Springs, Arkansas interiors-manufacturing facility.

“It’s a very small operation, and nobody is bringing their planes in for interiors,” Crowley said of the Atlanta shop.

The company, which is projecting $1.8-1.9 billion in fiscal 2021 revenues, does not break out its commercial vs. defense sales, nor does it detail its percentage of MRO receipts. In general terms, Crowley put the aftermarket share at about 25% of total revenue, while its commercial revenue, which includes several original-equipment supplier deals on major aircraft programs such as the 737 MAX, represents about 65% of its total.

Triumph generates most of its aftermarket work from accessories, structural repair and interiors. With interior work expected to be soft, it is looking to diversify as part of a broader growth strategy.  

“Interiors is going to be less of a contributor, but we’re looking at new classes of products to provide aftermarket that build on what we do in engine components and structures,” Crowley said. 

Triumph reported strong aftermarket increases from multiple regions, driven by commercial business. Asia-Pacific led the way, with a 17% increase, bolstered by a 23% jump in China. 

“The support we provide to China Southern, China Airlines, China Eastern, all very large airlines, is up substantially,” Crowley said.

A blossoming aerostructures and nacelles support partnership with Air France Industries-KLM Engineering and Maintenance is helping generate more work in Europe, where sales were up 16%.

“We decided to enter into this joint venture to get on the newer aircraft,” Crowley said. “So think 737, 787 ... those are just getting into their more intensive phases of support. The partnership with Air France, with our license from Collins [Aerospace], allows us to do so.”

North America was up 13%, “and that’s driven by cargo carriers,” Crowley said.

“It looks like Asia is coming back strong, and we expect Europe and North America to continue to steadily ramp up,” Crowley added. “The commercial aviation recovery is progressing, albeit slowly.”