Russia’s Biggest MRO Feeling Pinch, May Redeploy Line Mechanics

Russian MRO S7 Technics tripled its CFM56 engine repair capabilities by launching its second repair shop at its southern base at Mineralnye Vody Airport. The shop, which has multiple repair capabilities, can simultaneously service up to four CFM56 engines.

According to official figures, Russia has not been much affected by coronavirus so far, with only eight deaths per million reported by April 30, versus 50-600 deaths per million in Western Europe. In addition, Russia’s cut in domestic airline capacity, down 57% from a year ago, has been less sharp than in its western neighbors. 

But Russia’s largest private carrier, S7 Airlines, flies to 26 countries across the world and is feeling the dive in international passenger traffic. Many airline customers of S7’s maintenance arm, S7 Technics, are also feeling the downdraft, according to Technics deputy CEO Igor Panshin. 

S7 Technics is the largest MRO supporting aircraft for both its own and other fleets in Russia and CIS. Its one thousand workers normally do more than a hundred heavy checks each year at three bases and perform line maintenance at stations across Russia.

Now S7 Technics is experiencing a serious drop in line maintenance. “The bigger part of our airline customers’ fleets are grounded,” Panshin says. Managers are thinking about moving line maintenance staff to other departments, for example base maintenance or another division.

As for base maintenance, Panshin says S7 Technics still has some work contracted before summer season. “However, the overall situation makes airlines change plans.” That could affect heavy maintenance checks. But Panshin says he may be able to add some redelivery checks within coming months. 

In summary, “we have huge slowdown in line maintenance demand, and we are dealing with changes in base maintenance plans,” Panshin says.

In light of reduced airline flights, S7 Technics is working on cost optimization. “Our company is considering different cost-cutting scenarios in order to continue providing all its services to clients without interruption,” Panshin says.

The MRO is hoping to see traffic to start slowly growing back to normal by end of summer. “But stable and foreseeable growth could not be taken seriously until June-July 2021,” Panshin predicts. “If traffic seems to have stable growth by that time, then the airline business will begin to grow back again and the MRO sector will follow, as always.”

Meanwhile S7 Technics has applied for tax deferral in accordance a government decree and requested the company’s inclusion in a list of Russia’s strategic enterprises.