A Boom Is Born In Mainly Maintenance -- Out In Repairs Hangars, Tramco Leads The Way As The Stakes Mount

PAINE FIELD, Everett - Last August, with the snip of a ribbon, Tramco opened a new, $13.7 million hangar here and thus tripled the size of its jetliner repair and modification facilities.

At 250,000 square feet, the new hangar was designed to corral a herd of large aircraft. Tramco officials figured it would take a few years to expand the business to the point where the space was all used up.

Instead, it took a few months. By February, Tramco's hangar brimmed with nine 737s and 727s parked inside and a couple of 727s snuggled up to an outdoor docking area.

``We expected to take about three years to get to the level where we are now,'' said Bob Trimble, Tramco president and co-founder.

So now what? Backed by BFGoodrich, its $2.4 billion (sales) parent company, Tramco has announced plans to build at least one and very possibly two more giant hangars at Paine Field.

Meanwhile, Goodrich, which acquired Tramco in 1988, is exploring the possibility of cloning Tramco's Everett operation at startup sites in San Antonio, Texas, and Jacksonville, Fla.

``It's a very solid, rapidly growing business,'' Goodrich spokesman Brayton Harris says of aircraft maintenance and modification. ``The potential out there is tremendous.''

Spell potential with a capital P.

As airline fleets have grown to meet ever-rising passenger counts, so has the demand for routine maintenance, which can range from quick repairs to monthlong refurbishings.

Modifications seem to be on the rise, as well, driven by the rise in airplane-leasing companies, a growing air-cargo fleet and tougher federal noise regulations.

Leasing companies tend to order unadorned planes. Companies like Tramco finish out the aircraft in the colors, decor and seating configuration preferred by the lessee airlines. Other work comes from converting jets from passenger to cargo configuration, and from reworking old jet engines to make them quiet enough to meet stricter FAA noise rules.

Factor in tougher Federal Aviation Administration requirements for aging aircraft, which call for extensive inspections and upgrading of several popular jetliner models, and a boom is born.

All across the United States - and in Europe and Asia, as well - the major players in the jet-repair and modification game are stampeding to expand existing facilities and open startups.

The ante: hundreds of millions of dollars. Tramco's next hangar will cost about $20 million to build. A competitor, Page Avjet, is expanding its Orlando, Fla., plant at the same time it is opening a branch operation in Fort Worth, Texas. Plans call for development of a total of six new hangars between the two sites.

Like Tramco, Lockheed Aeromod, of Greenville, S.C., has been growing at breakneck speed - from a dozen employees to 1,900 in six years. The company recently broke ground on a startup branch operation in Tucson, Ariz., that will feature a $25 million, 240,000-square-foot, state-of-the-art hangar.

Then there's North American Aircraft, a division of Rockwell International, which is in the process of converting the gargantuan former B-1 bomber plant in Palmdale, Calif., into a heavyweight jetliner-repair operation.

``Right now is a very key time to increase capacity because it will give you that extra margin of capability which will be a key to securing future work,'' said Brian Loflin, marketing director at San Antonio-based The Dee Howard Co., which is erecting a 65,000-square-foot painting hangar to complement its 265,000-square-foot main hangar.

It is no coincidence that most of the new hangars coming on line are big enough to swallow a 747 jumbo jet. In the eyes of repair-company officials, the 747 is a plum about to ripen.

First flown commercially in January 1970, the 747-model line has reached the 20-year benchmark when maintenance chores to keep the plane safe increase dramatically. Moreover, a FAA/private industry safety task force, formed after the top of an aging Aloha Airlines 737 ripped off in flight two years ago, has mandated expensive renovations for older 747s.

One rule, for instance, calls for the front door-to-nose section of older 747s to undergo frequent, ongoing inspections for cracks and corrosion. Alternatively, airlines can opt to pull an aircraft out of service, remove the interior paneling and replace worn frame and body parts. (This is known as a ``terminating action'' - performing the upgrade ends the requirement for frequent inspections.)

The rule covers 670 jumbo jets, and industry experts estimate a typical terminating action for just the front section of a 747 will involve 50,000 manhours at a rough cost of $2 million. Most airlines probably will have other refurbishing work done at the same time, so a typical 747 job could run more on the order of several millions of dollars. Not surprisingly, a line has started forming for 747 work.

``We're talking primarily to 747 guys,'' said Rockwell's Scott White about the company's hope to convert its old B-1 plant into a major repair station. ``We've got 1 million square feet of space. We could put five 747s under roof. We'd be delighted with the opportunity.''

Said Jeff Kincade, Page Avjet marketing director: ``A lot of people are talking about the 747. Even if everybody who has expressed an interest went ahead and got involved, there would still be plenty of work to go around.''

Business expansion, of course, is more complex than hiring a contractor and doing some marketing.

Tramco's aggressive growth plans, for instance, hinges on convincing the Snohomish County Council to displace some 20 small businesses - including the Snohomish County Senior Services Center - that now occupy decrepit county-owned buildings that Tramco wants to demolish to make room for its hangars.

``We're looking for a win-win situation,'' said county council member Ross Kane, adding that Tramco's plan ``raises questions'' about traffic jams and noisy jets.

Industrywide, one limiting factor could be a shortage of skilled labor and specialized tools. The booming aircraft-manufacturing industry is swallowing up graduates of the nation's 170 or so airframe and powerplant mechanic schools faster than the schools can churn them out. Tool makers, likewise, are swamped trying to keep up with demands of the manufacturers.

``Simply opening a facility and having a large beautiful hangar available isn't going to be enough,'' said David Lagger, new business manager at Santa Barbara, Calif.-based Tracor Aviation Inc. ``You've got to somehow get that experience base up. That's going to be a problem. Everybody's fighting for the same labor pool.''

Lagger, for one, thinks the industry-wide wave of expansion portends an inevitable period of consolidation, perhaps as soon as a year or two from now, during which weaker players fall by the wayside.

``I think there's going to be some winners and some losers,'' Lagger said. ``Personally, I just don't see where the industry can support all the capacity that's coming on line.''

THE JET REPAIR GAME

The business of caring for commercial jetliners is booming. Because of fleet growth and increased requirements to upgrade aging aircraft, airlines are looking more and more to contractors to modify, repair and overhaul their planes. The result has been an avalanche of investments in repair facilities. Here's what the major players are doing:

-- Company: North American Aircraft, division of Rockwell International

-- Location: Palmdale, Calif.

-- Existing facilities: 1 million square feet in two giant hangars

-- Employees: 1,500

-- Expansion plans: Palmdale facility mostly idle since finishing up B-1 bomber program two years ago. Some recent work done there overhauling 727 engines and refurbishing a Continental 747. Intention is to expand business to utilize entire Palmdale space, where up to five 747s can fit under roof at one time.

-- Company: Lockheed Aeromod, division of Lockheed Corp.

-- Location: Greenville, S.C.

-- Existing facilities: 340,000 square feet in 14 hangars

-- Employees: 1,900

-- Expansion plans: Constructing 240,000-square-foot hangar as base for start-up operation in Tucson, Ariz. Exploring possibility of establishing 747 maintenance operation at hangars being abandoned by the military at Norton Air Force Base in San Bernadino, Calif.

-- Company: Page Avjet

-- Location: Orlando, Fla.

-- Existing facilities: Combined 350,000 square feet of office/hangar space

-- Employees: 900

-- Expansion plans: Building new 72,000-square-foot hangar in Orlando and preparing to break ground on identical hangar in Fort Worth, Texas. Both hangars designed to fit 747s. Four more hangars planned, two in Orlando and two in Forth Worth.

-- Company: Tramco, subsidiary of BFGoodrich

-- Location: Everett

-- Existing facilities: 294,000 square feet in two hangars.

-- Employees: 1,050

-- Expansion plans: Pursuing immediate construction of 300,000-square-foot hangar; laying plans for a fourth 250,000-square-foot hangar. Parent company exploring cloning Everett operation at San Antonio, Texas, and Jacksonville, Fla.

-- Company: The Dee Howard Co., division of Aeritalia

-- Location: San Antonio, Texas

-- Facilities: 265,000-square-foot hangar

-- Employees: 1,000

-- Expansion plans: Designing 65,000-square-foot painting hangar for groundbreaking later this year.