On 1 November 2021, Matt Caswell was officially made CEO of 2Excel Engineering having previously served as COO and head of maintenance. Here, he outlines his vision for the company’s future
[This article first appeared in the December 2021 issue of MRO Management]
How do you see the state of 2Excel Engineering as you take over as CEO?
The MRO industry is a difficult industry to be in. The way that the industry operates is very cut-throat and you don’t make massive money – you’re effectively at the end of a supply chain. The fact that we are still here and that we’ve survived given where we’ve been over the last 18 months, and especially through Covid, says a lot for the state of the company. Despite going through a reconfiguration and the Covid restrictions, we managed to land flat last year financially and for us, especially in a very competitive market, that’s a huge success story. That reflects on the control we had over the business throughout the period and also on the staff; they’ve played a huge part in getting us to where we are today. The business is more stable now than it has been over the past five years. We’re now starting to see customers coming back. It’s now for me to look at growth.
What will your six-month action plan look like?
It would be easy to announce grand plans but we’ve got to be mindful of what’s going on still; we are out of the darkness of Covid but we might not be ever fully out of it because customers have changed their habits on how they buy, and we are a product to them. The key thing now is forming new relationships, strengthening existing ones and looking for growth opportunities – adding value to the business. In the first six months we must stabilise, fill the pipeline so we know we’ve got work, and look for niche opportunities.
During Covid we didn’t form any new relationships, but we’re now starting to. We’ve signed a deal with a new lessor company for us, which is going to bring in heavy maintenance and C-checks. We are strengthening existing partnerships, with Easyjet for example. We were doing end-of-lease work for them, but we’ve now got a line of in-service C-checks. That’s a positive story as we’ve been able to adapt to their needs and they obviously like what we do. We’re also seeing existing or old customers come back.
One of the key things we’ve learnt is the need to adapt. Where 18 months ago we were a heavy maintenance organisation that effectively sold hours, we have now adapted the business to customer needs, whether that means end-of-lease work, storage work, or small inputs to keep aircraft flying for certain periods of time.
How has 2022 planning been affected?
Six months ago, we had a 3-4 week pipeline. What we’re now seeing is a pipeline for five months – that’s a huge game change from where we were. Planning-wise the difficult thing for us now is having the capacity to meet customer demand. It’s almost a fight to the death for who gets slots. It’s completely flipped on its head; where before we were trying to bring in whatever work we could to sustain our workforce, we’re now having to look at what work we bring in to make sure there’s a balance to our capacity. It’s difficult to plan now because you don’t know what the best work to bring in is; what we don’t want to do is over-commit and under-deliver. It’s about using our experience to balance what we know we can do with what we actually have.
Do you have any plans to add capabilities?
To grow the business, we’ve got to be relevant. By Q1 2022 we will have A320neo capability, which we’ve been working on for the last 6-12 months. That’s our next big step in capabilities and has been done to be relevant to the market. Looking at existing partnerships that we have – Easyjet, Jet2, lessors – the neo is a big market and fits our skillset and capabilities.
We’re also reinstating our C rating so will have our C rated workshops back up and running by the end of 2021. That’s also about being relevant, and bringing the customer’s risk in-house and de-risking their inputs, which is another key selling point. Within an MRO environment people pick on price, quality and risk mitigation. It’s a big thing when you can do 90 per cent of the work in-house without needing to farm it all out. You can really dictate how a check is planned and run.
It’s also looking for other niches, and we are looking at cargo conversions and expanding our light aircraft side. The aim is to bring all of 2Excel Aviation’s fleet in-house, while seeking third-party customers. We won’t stop there and will also look at line maintenance and other things in the market that fit in with our current business model. The long-term vision is to grow the business sustainably and add value to the business.
How do you assess the state of the MRO sector as a whole?
It’s still in a bit of a state of shock because it went from long-term partnerships, relationships and pipelines to effectively nothing. When Covid struck our turnover halved, and that’s a big indicator on where the market went. People don’t want to part with their money, and cash is king. The MRO industry is picking up, you can see that in the enquiries we are getting. Six months ago we were effectively a goalkeeper, waiting for people to phone us. Now, we are actively out there selling and having to manage inputs rather than accommodating everything.
It could be a false picture at the moment though. While everyone wants to get their aircraft back flying, there will be a peak and we need to realise when that peak is, which could be next year. There will be a dip again, and then we need to see what the stable level is in the industry, and that will be the key point. We’re now starting to recruit for the first time since reconfiguring the business, which shows that there’s growth, but also that we are doing it in a sustainable way.
What are the major challenges you must overcome?
One of the biggest is the exodus of skills from the industry. Now the business is starting to pick up trying to get contract staff in is very difficult, and trying to get permanent staff in is proving more difficult than it was pre-pandemic. In order to grow the business we need to have the right people.
What are the future plans for 2Excel’s apprenticeship schemes?
We’ve taken on engineering apprenticeships this year; we didn’t last year because of Covid. For the first time since becoming 2Excel we have taken on a facilities apprenticeship and an NDT apprenticeship. Going forward, the best way for us to keep and attract people is to grow people. I’m looking at other apprenticeships within the business such as support functions, whether that’s planning, commercial or stores. The business is wider than just the engineering side of it. Apprenticeships form a huge part of our plans.