Russian Recovery Prompts S7 Technics Expansion Plans
The domestic markets of China, Vietnam, India and Russia were the first to recover strongly from the COVID slump. Indian flights have seen a drop as a spring wave of the virus prevented movement across the country, but the other recoveries are still going strong.
For example, due mostly to resumption of domestic flights, Russian carriers served 7.2 million passengers in April 2021, nearly ten times the 739,000 passengers carried in April 2020.
That has been good news for S7 Technics, which focuses mostly on narrowbody maintenance. “The Russian MRO market declined less than other markets, and we managed to avoid a serious reduction in volume of work in 2020,” notes Nikita Belykh, deputy CEO of sales and marketing.
The seasonality of Russian travel, like that of most northern hemisphere countries, means a slight dip in maintenance is on the horizon. “In the summer months, there will be a slight seasonal decrease in the volume of work, and full workload capacity is planned from the beginning of autumn,” Belykh observes. And he is optimistic that Russian carriers will continue to develop in future years.
Maintenance of wide-bodies is a small share of S7 Technics’ business, and Belykh expect that small share to remain stable.
Meanwhile, steady growth of domestic narrowbody flights is encouraging expansion of staff and capabilities.
Human resources director Daria Obedkova says S7 Technics plans to hire more mechanics because it will be adding an APU repair shop and CFM56 hospital repair shop at Sheremetyevo airport. Belykh expects the APU shop to open at the end of 2021 and CFM56 shop to open in 2022. In 2021, S7 Technics will begin manufacturing seat cushions, and the MRO is considering obtaining certifications for maintenance on Airbus A320neos with the LEAP-1A engines.
Although S7 Technics and Russian domestic aviation has been doing relatively well, getting parts delivered on time has been a challenge, according to Danila Larin, deputy CEO of logistics. “We do face difficulties with delivering on time,” Larin says. “COVID-19 issue caused significant perturbations.”
First, the quantity of flights available was reduced significantly because of the COVID. Larin hopes this will change toward the end of 2021.
Another logistics issue has been the costs for sea and ground delivery have risen, boosting demand for air transportation. That in turn reduced air cargo capacity available to S7 Technics.
Finally, Larin says Russia sometimes poses challenges in custom clearance. “This can add an extra 1-3 days for delivery.”
But longer-term prospects still look bright. Belykh believes COVID-19 has changed the future MRO market. “Companies have accelerated the pace of updating their fleets, and the number of redelivery checks has increased.”
S7 Technics plans to develop a comprehensive product for managing and ensuring aircraft redelivery, engineering support, material management and modifications. The MRO is also looking into both maintenance of cargo aircraft and possibly convert aircraft from passenger to cargo versions.