Fast 5: UK MRO Looks To Adapt In New Lansdscape
The past year has seen a raft of changes implemented by 2Excel Engineering as a means of navigating the COVID-19 crisis. The company's CEO Chris Norton discusses how it is looking to reshape and grow.
How did 2Excel navigate the COVID crisis? Did it look into different capabilities/service lines?
We reacted quickly, matching capacity to demand safely, resiliently, socially-acceptably and economically-viably. We increased our focus on the lessor market in order to make up for the drop off in airline operator activity. By August 2020, we had decided our ‘reconfiguration plan’, to make 2Excel Engineering leaner, stronger, better controlled and more functionally-driven and by November we had implemented it. We managed to save 165 out of 197 permanent jobs and created new terms of reference for each one. In 2020 we reacted, survived, reconfigured and recovered. 2021 will be another hard year for us but next year we will prosper.
Which services did 2Excel see the biggest slump in demand for?
Sadly, a lot of companies have taken a huge hit due to the pandemic and, because of the interdependencies within the supply chain, the whole sector saw a huge slump in demand. Front and centre were the airlines, which were a significant percentage of our market. When Covid 19 hit, we refocused very quickly to the lessor market. As an independent MRO, we already had good relationships with them (as they don’t have their own MROs) and we pride ourselves on flexibility, transparency and engineering excellence. The lessors could trust us to be able to react to their very swiftly changing requirements and they brought us large numbers of aircraft each. At the peak we had 30 aircraft at Lasham in storage with deep maintenance checks held in abeyance until onward customers were found. Today we have only 12, so it is obvious the market is moving again.
Post-crisis, will there be challenges related to capacity? If so, how is 2Excel readying for those?
From a people perspective, we have structured ourselves to be able to double capacity within a week. That is much more capacity than we are being asked for, so we can scale up really quickly. The collapse in demand means the contractor market has changed so we have a ready supply of high quality engineers that already support us. We have provided steady demand to that market for eight months now. From a supply chain perspective, the pandemic has negatively affected the spares and parts market not so much from availability but due to high friction transport and, therefore, timely supply.
Do you see the UK skills landscape changing post-crisis? Will there be an oversupply or a shortage?
2Excel Engineering is built on the solid foundations of 70 years of engineering experience. How we harness those skills and make them relevant commercially to the market as it changes is vital. We continue to adapt to the changing realities and our deep engineering skills are still in demand. Our services are becoming harder to find elsewhere. Whereas before the pandemic there was a shortage of skilled engineers, the lack of work means availability has gone up. It will take years for the airline industry to regain 2019 levels so, for a few years, supply will exceed demand. But without generating new engineers we will once again find ourselves on the wrong side of that curve. That is why our Apprenticeship Scheme is so important to us. We want to train our own people with our culture. We want to build a psychological bond with our staff who want to stay at 2Excel and make a success of Lasham in the long-term. So far, it’s working. We have been able to employ all our graduating apprentices and we have recruited nine more apprentices this year to keep filling the bucket. It’s a long-term plan but it’s vital to addressing the long-term shortage we see ahead.
How do you see the role of 2Excel as a UK-based independent MRO evolving long-term?
We are constantly modernizing to be fit for the new realities. We fill our order book by offering high-quality engineering, flexibility, transparency and resolute customer focus. We have become used to adapting to rapidly changing commercial realities. Being comfortable with uncertainty, and agile in our response, is a natural position for 2Excel. There is an increased demand in the cargo market; that is the next opportunity for us.