Quickstep puts maintenance division up for sale

Aerospace composites manufacturer Quickstep is offering to sell its aircraft maintenance division Quickstep Aerospace Services only three years after buying the Tullamarine, Melbourne company.

Quickstep paid $2.64 million to buy Boeing Australia Component Repairs Pty Ltd to give itself a new growth business and to add steady MRO income to its high tech manufacture of defence aircraft and drone components for clients such as Lockheed Martin and Northrup Grumman.

Since then the company has been able to extend the work of the division to include Airbus and Embraer commercial aircraft, as well as defence aircraft.

QAS achieved a number of milestones including entering strategic arrangements with Triumph Aviation Services Asia and ST Engineering, and the award of a long-term maintenance contract of V2500 Engine Nacelles by Jetstar Airways Pty Limited.

However according to Quickstep slower than anticipated growth in the domestic commercial and defence sectors resulted in operating losses and negative cashflow in excess of what was originally anticipated.

“This has been largely due to the challenging trading conditions in the commercial airline MRO market persisting well beyond the unprecedented pandemic disruption of 2020-22.

“For a business of this nature to be successful, it is critical to have a consistent flow of work through the facility, which is achieved through customer commitments to onshore work and company investment in tooling and rotable spares.

“Given the current trading conditions in the Australian aviation market and investment constraints versus other opportunities in the broader QHL business, it is impractical for investment in QAS to be made at the level required to enable sustainable long-term profitable growth.”

Quickstep initially saw the MRO operation as an important national capability aligned with its strategy to grow its defence sustainment business, and still sees a positive future for the business.

“Given the above financial realities and ongoing losses in the business unit, the Company believes the most appropriate course of action is to sell all or a majority share of the business to a MRO focused, global corporate who is able to meet the investment needs of the business and facilitate the achievement of scale, which will support a sustainable and profitable ongoing operation.

“The Company is engaging with employees, customers and partners during this period of potential change and the Quickstep Aerospace Services business will continue to trade as normal during this sale process.”

The sale also reflects Quickstep’s imperative to get back into the black, with recent losses holding back the company’s share price on the ASX.

The company has recently restructured its structures business to cut costs and achieved growing success in the drone sector.

In early trading Quickstep’s shares were down two cents or 6.25 percent to 30 cents.

Further reading:
Quickstep beefs up aircraft MRO capabilities
Quickstep restructures its aerospace structures business

Picture: Quickstep