Nayak Aircraft Services is an Amsterdam-based maintenance, repair, and overhaul company founded in 1974. As Europe's largest independent non-airline affiliated MRO, it serves all commercial aircraft across 16 countries with its line network of 55 stations.
It appears to be a pivotal time for Nayak Aircraft Services - with a new CFO and CEO appointed in 2022 in addition to last year’s acquisition by private equity firm Cheques Capital. What is the reason behind all these major changes?
Nayak was established in 1974 as a split out of the technical department of an airline, initially, a line maintenance business with just two guys in a van, growing in Germany. In 2000, there was a management buyout And the two founders acquired companies in the Netherlands and Italy, which spurred growth. After restructuring in 2017, a new investor stepped in and acquired Air Berlin's remnants. This accelerated Nayak’s growth to a new height in 2019.
The pandemic was of course a huge challenge, but by 2022, we achieved a turnover of €100 million with a growth of 25% over the pandemic years. The growth was made organically, and now Nayak is up for the new challenge to further work on inorganic growth. With the new investor on board, a new CFO entered to bring investment experience to the board of directors.
How much of your post-pandemic success can be attributed to organic growth as opposed to a direct consequence of the recent deal with Cheques Capital?
During the pandemic, we realized that organic growth alone might not be sufficient for future expansion. We did consider inorganic growth options and explored potential acquisitions, however, determining company values during such uncertain times was challenging, and no final deals were made.
By 2022, we recognized the need for a strong partner to enhance our acquisition power and expertise. This led to our partnership with Cheques Capital, finalized at the beginning of this year. With Cheques Capital now on board, we aim to expand our acquisition power and expertise for future steps. With their support, we aim to make strategic acquisitions and expand our capabilities.
Given that MRO businesses cannot perform most of their functions remotely, how did the pandemic impact your operations?
Demand dropped significantly and our daily business activities, including hangar and line activities, were severely impacted. Many aircraft went into storage during the pandemic due to being idle, which limited our operations. However, we managed to take on projects involving aircraft readiness for part-out, worked with fewer companies reclaiming aircraft, and sought any available work to keep the company going.
Our cargo business remained stable, contributing to a limited loss of business in 2020 and we managed to grow again in 2021. Collaborative efforts with employees, customers, cost control measures, and state support programs helped our survival and enabled future growth after this period.
You currently have operations in 16 countries with 55 locations across Europe. Do you have plans to expand to other European countries or beyond?
We have a broad portfolio encompassing nearly all airlines operating in Europe and work with all major carriers, including American and Asian carriers flying into Europe. We have been expanding in Germany, Austria, and Spain, driven by customer demand and airlines’ needs. In Germany, we identified a gap for an independent maintenance supplier at several airports, positioning ourselves next to Lufthansa. In Spain, we developed a partnership with Vueling Airlines, expanding our presence in Barcelona.
While the UK is not currently a target market, mainly due to its competitive nature and post-Brexit challenges, we remain open to future opportunities if the right one arises. We planned to start operations in Tel Aviv, Israel but have now postponed due to the Israel-Gaza war. Although we haven't proceeded in Eastern Europe yet, we continue to evaluate opportunities.
As an MRO, what is the greatest challenge you are facing in 2024?
Like many other MROs, the biggest challenge for us is manpower since our main asset is skilled employees. Despite this, we have managed to grow our workforce from around 950 in 2022 to over 1,100 employees in 2024. Our solid work environment, quality standards, good tools, and proper compensation all help us attract and retain the right talent; we continue to recruit locally in Europe and beyond.
How is Nayak leveraging technological advancements like artificial intelligence and drones to improve operational efficiency?
We have a cloud-based, secure IT backbone, and use the Amos ERP system which is top-of-the-class in the aviation sector. Engineers are encouraged to bring forward ideas for improvement, which our IT team implements. We collaborate with companies developing technology for inspections, but our main aim with artificial intelligence is to reduce repetitive tasks and administrative burdens for our engineers. Our continuous seek for solution-driven innovation helps us to make the company move forward with efficiency.
