Fast 5: Spirit AeroSystems’ Aggressive MRO Goals
Sonny Stern joined Spirit AeroSystems on Feb. 28 as chief commercial officer-aftermarket. He previously was VP sales and marketing for Delta TechOps, where the business doubled during his seven years there. He talks with Lee Ann Shay, Aviation Week’s executive editor MRO and business aviation, about plans to double Spirit’s aftermarket business in the next three years.
Are there any changes that you’re planning to make to the sales organization?
Spirit has a really a good workforce but it’s tiny. There's one sales person in the Americas and two in Europe. We have to scale it but even more important than the sales organization is customer service. One of the things that I know that Delta focused on for the airline side of business and I tried to in the MRO space is the customer. Spirit hasn’t really had much interaction in the aftermarket except in what it does as a manufacturer. With regard to work scopes, it would be service bulletins and ADs that come out on the products that Spirit builds. Customer service wasn't at the forefront of its strategy so I want to really bolster it.
What are your revenue goals?
One of the things that is an upside for me is that Spirit, as I see it, now that I've been in here six weeks, is one of the best kept secrets out there. When I agreed to join the company, I thought of Spirit more as an OEM than an aftermarket company. But now that I've been here for six weeks, I'm seeing what the capabilities are for the organization and it's really exciting.
When the company reorganized in late 2021, the goal was to be 40% commercial, 40% military and 20% aftermarket. Today the aftermarket business is 2-3% of the total revenue of the corporation, so we've got to grow 17% from what it is today. [Editor’s note: Spirit AeroSystems’ 2021 revenue was $239.9 million, which was a 19% increase over 2020. In the next three years its target is $500 million.] Based on the fact that we haven't been out there, but we are now, and that we're developing a bigger sales team and we're developing stronger customer service organization, I think we'll be able to get to the goal.
As I said earlier, we predominantly work on the products that we build, but in the future we’ll start to maintain other products. As an example, in Dallas, we do some C-17 and C-130 components, such as flight controls. We'll focus on platforms that we are not the OEM on, but we have the expertise to repair.
Spirit manufacturers parts for commercial, business aviation and military aircraft, so will it pursue new repairs in all of the segments?
Yes. We’ll get into more military platforms and more business jet work than what we do today. We'll probably try to build alliances with some of the depots. As an example, we'll start to have discussions with Warner Robins and Tinker to try to partner with them on nacelle systems, flight controls and composite structures.
Spirit AeroSystems has stated that it wants to expand its global business. How will you expand international sales?
It is imperative for us to grow internationally if we're going to make that 20% goal. We work on flight controls and nacelle systems, so you really have to have a local solution for customers. Spirit formed a joint venture with EGAT prior to me coming here. We're talking about other locations around the world with local partners, whether it be through a joint venture, maintenance cooperation or acquisition. We’re definitely going to be near our end customers because it's too expensive to ship flight control systems around the world.
During your six weeks at Spirit, what’s your opinion of how the company is meshing the acquisitions of the Bombardier MRO business in Belfast and Casablanca?
I was in Belfast two weeks ago and think that team is a strong, capable team with a great attitude. The challenges will be typical merger things such as the SAP systems are different and the way that we each handle MROs are different. You just have to figure out how to integrate all of that. But I do have to say it's been refreshing that the teams really are embracing it. The people in Belfast were happy that Spirit acquired them because they had been starved of capital and it was tough for them. You have to invest in businesses to go forward. So now that Spirit is the owner, I think that they see a better path. Once we start cross pollinating the products we work on and our engineering and everything that goes into being a good service provider, it’s a one plus one equals 2.2 or 2.3 type of an equation.