Spirit AeroSystems Boosts MRO Work With EGAT Agreement

Spirit AeroSystems, its diversification efforts struggling as two major acquisitions remain in limbo, announced a smaller move to bolster its strategy via an aftermarket support partnership with Evergreen Aviation Technologies Corp. (EGAT). 

The collaboration also announced its first deal, winning a contract to service GE Aviation GE90 nacelles for EVA Air. 

The agreement will see Wichita, Kansas-based Spirit support EGAT so the repair station can service Spirit products, including GE90 and Rolls-Royce Trent 800 nacelles, CFM International CFM56-7B thrust reversers, and various flight-control surfaces. Spirit technicians are training their EGAT counterparts on-site to perform all of the touch labor.

"Spirit has program staff collocated with EGAT in Taiwan, and we also provide reach-back into our engineering and technical support group located in Wichita," Spirit said. "EGAT is performing all services in its facility."

Spirit also will work with EGAT to set up spares pools and expand MRO services offered to operators in the Asia-Pacific region, including performing work for EGAT customers that the facility previously sent to other shops.  

“Asia represents extensive growth opportunities for Spirit. We’re committed to making investments in the region that align with our growth strategy and help increase readiness for growing fleet demands,” Spirit’s senior director of Aftermarket Services Jim Lickteig said. “Given our expertise in repairing advanced composites, we want to share our established knowledge with strategic partners and customers to establish regional expertise when these structures need repairs and modifications.” 

The EGAT venture gives Spirit a physical MRO presence in the Asia-Pacific region more than two years after a decade-long composite-repair partnership with Haeco ended. After that venture and before the EGAT deal was struck, Spirit was performing work for Asia-Pacific customers in its Wichita repair station or contracted with other shops in the region.

Spirit’s MRO expansion comes amid struggles to finalize two separate acquisitions. One deal would bring Bombardier assets into the fold, including MRO business in Belfast and Dallas. Announced a year ago, Spirit said in a recent U.S. securities filing that some closing conditions have not been met. As currently structured, the deal must close by Oct. 31. 

An agreement to buy Belgium-headquartered component manufacturer Asco reached in May 2018 is in more jeopardy. The European Commission has not signed off on the deal, whose current terms expire Oct. 1. 

Both acquisitions and the EGAT deal are part of a diversification strategy meant to lessen Spirit’s reliance on Boeing. Before the COVID-19 pandemic hit, Spirit generated about 80% of its annual revenue, which totaled $7.9 billion in 2019, from Boeing work.  

Most of Spirit’s revenue comes from supplying large structural components for new aircraft, such as the 737 and 787 programs. A massive decline in demand for new aircraft that is expected to last several years has underscored the need for Spirit to explore more aftermarket opportunities. 

“We’ve always had a relatively small aftermarket MRO as well as spare parts,” Spirit CEO Tom Gentile said on an August analyst call. “We see opportunities for that to grow in the future.”

Near-term, the company will focus on growing its newest partnership. 

"We are continuing to expand capabilities to cover a broad base of components and aircraft models," Spirit said. "While we cannot share specifics about our upcoming plans, there is definitely more in store."