EVERETT — Aviation Technical Services, the second-largest aerospace employer in Snohomish County, welcomes new leadership this week — one of its own.
On Friday, Paul Dolan, 55, the president of ATS, will become CEO, replacing Matt Yerbic, who is stepping aside after 14 years as CEO to lead the company’s board of directors.
As board chairman, Yerbic, 51, plans to remain active in larger, strategic decisions affecting the Everett-based firm, one of the largest aircraft maintenance and repair companies in North America.
ATS provides a suite of maintenance, repair and overhaul services, known in the aviation business as as MRO, for commercial and military aircraft. It also repairs and designs airplane parts.
The ATS facilities at Paine Field include a 500,000-square-foot hangar with room for up to 14 airplanes and a smaller warehouse for repairing aircraft components, Dolan said.
Customers include Southwest Airlines, Delta Air Lines and some of the nation’s largest cargo carriers.
“Most airlines put their airplanes through a heavy maintenance check every two years,” Dolan said. Every six years, a plane undergoes what’s called a “heavy D check” and “gets completely torn down” and rebuilt, Dolan said.
The company also modifies used airplanes for airlines, renovating and re-configuring the plane’s interior to a carrier’s specifications.
The work that ATS performs is “directly related to air travel,” Dolan said. So when air travel nearly disappeared last year because of the COVID-19 pandemic, the company’s leaders focused on survival — just keeping the lights on.
“For us, it was ‘holy cow,’ we’re not really sure we’re going to get through this,” Dolan said. “We were wondering if we were going to have a business.”
At the beginning of 2020, ATS employed about 1,600 people at four U.S. locations, including 1,100 in Everett, Dolan said.
Survival mode necessitated laying off hundreds of workers in Everett and at ATS facilities in Moses Lake; Kansas City, Missouri; and the Dallas-Fort Worth area, Dolan said.
The U.S. workforce now numbers about 1,250 people. About 800 are employed in Everett, Dolan said.
During the pandemic, ATS secured $57 million in federal CARES Act relief funds. By requirement, those funds went directly to pay workers’ salaries, “specifically non-executive salaries,” Dolan said.
Dolan credits the money with saving the company and keeping its remaining employees on the payroll.
“Taking care of our workforce was number one,” Dolan said. “I don’t think we’d be in business today had we not gotten those funds.”
ATS turned 51 this year and began as Tramco in Renton in 1970. Seven years later, the company moved to Paine Field.
The company was sold to Goodrich in 1988 and became Goodrich Aviation Technical Services. In 2007, Sydney, Australia-based Macquarie Group bought the company for $58.4 million. Then in 2013, a group of investors led by Yerbic bought ATS for an undisclosed amount.
During his tenure as CEO, Yerbic oversaw the company’s transformation from a single-site airframe maintenance business based in Everett to one of the world’s largest providers of aircraft maintenance, repair and overhaul, the company said.
“I am honored to have served in leadership and been part of an ownership team at such an amazing company,” Yerbic said in a prepared statement. “I am also thankful to our employees and customers for all they have done to support ATS. We are fortunate to have a talented and humble leader like Paul taking the CEO role.”
Dolan joined ATS in 2016.
“I’ve been training for this job for five years,” Dolan said of his promotion to CEO. “Matt is leaving the business in a great spot.”
Previously, Dolan held executive leadership positions at several aviation maintenance and repair firms, and he served in the U.S Navy as an F/A-18 Strike fighter pilot.
Dolan has an MBA from University of Southern California’s Marshall School of Business, a master’s of science in aeronautical engineering from the Georgia Institute of Technology, and a bachelor’s degree with distinction in mechanical engineering from the U.S. Naval Academy.
He is board chairman of Economic Alliance Snohomish County, a nonprofit economic development group that serves as a countywide chamber of commerce. Since 2018, Dolan has served on the Department of Defense Business Board, which advises the secretary and deputy secretary of defense.
$90 billion industry takes a hit
Before the pandemic, the global maintenance, repair and overhaul business was a $90 billion industry, according to Oliver Wyman, an international management consulting firm.
The COVID-19 crisis, which upended air travel, nearly halved the repair industry’s value. MRO spending declined last year by 45% to an estimated $50 billion, Oliver Wyman reported.
By spring 2020, an estimated 13,000 to 16,000 passenger jets — more than half of the world’s commercial fleet — were parked, according to Cirium, an aviation analytics company.
As work evaporated, ATS took stock of what it could offer airline customers. It drew on its experience storing grounded Boeing 737 Max airplanes for Southwest Airlines. Airlines would need storage space for their fleet and the expertise that goes into maintaining a jet that’s on the ground.
“We reached out to the airports to see what they could do to help us with space to park and store airplanes,” Dolan said. “And then we started dialing airlines and offering to help them figure out where they could put their airplanes.”
Storing an airplane isn’t a matter of parking it and walking away. The engines must be fired up every week or so. The wheels must be rotated so that the tires stay round. Temperature and humidity inside the aircraft must be carefully monitored to guard against excess moisture that can damage the electronics and other systems. In short, maintaining a parked plane is a rigorous, labor-intensive job.
The phone calls to airlines and cargo carriers paid off, Dolan said.
“At one point we had 251 airplanes across three different locations — Everett, Moses Lake and Kansas City — in storage,” Dolan said. “While it was a small portion of our revenue, it provided us the ability to keep the doors open.”
The company also found new customers in the air cargo industry, providing heavy maintenance for air freighters.
After laying off hundreds of workers, ATS is hiring again.
Despite the withering downturn, ATS invested in employee training and new software systems that are allowing mechanics to go “paperless.”
Instead of filling out paper checklists, mechanics input the information on computer tablets.
“It doesn’t let them move to the next screen until all the signatures are in place and they’ve followed procedure,” Dolan said.
The pandemic “taught us to work smarter and leaner,” Dolan said. “We’re a tighter group.”
Before the pandemic, the aerospace industry was facing a shortage of skilled workers. As air travel recovers, Dolan predicts, the dearth could become even more acute.
The pandemic highlighted the aviation industry’s volatile nature and pushed many technicians out of the industry due to concerns “that this could happen again,” Dolan said.
“There are many, many mechanics that left the industry, and they probably will never come back,” Dolan said. “They’ve gone to be retrained into other businesses.”
The company’s answer to the shortage “is to train our own,” Dolan said. “About two, three years ago, Matt (Yerbic) pushed us toward building our own training academy.”
ATS recently established the Matt Yerbic Apprenticeship program. The 18-month program, a full-time, paid position with benefits, prepares graduates to become certified aircraft mechanics.
One of the company’s “best sources for apprenticeship candidates” is nearby Sno-Isle Tech Skills Center, which enrolls junior and senior high school students from Snohomish and Island counties, according to Seth Jacobsen, senior manager for apprenticeship and career development at ATS.
Dolan said the company has also changed its recruiting criteria for some positions, seeking job and apprenticeship applicants with good communication and customer skills.
That means that a barista or a car salesperson, for example, might be good candidates for the apprentice program.
“Even though these folks won’t see customers, their customers are the airplane,” Dolan said.
The hard skills, from running a drill to setting rivets, can usually be taught, Dolan said. The emphasis on the so-called soft skills, he said, has reduced the apprentice program’s attrition rate from 25% to 15%.
It’s also hoped the approach will recruit more women to the aviation business.
“It’s not a women’s workforce and we’re trying to change that,” Dolan said.
Dolan says the aviation industry may recover faster than expected. Last year, experts predicted the sector would not reach 2019 levels until 2024, he said.
“Now we’re hearing people talk about 2022 or 2023,” Dolan said.
Not all of the company’s business lines have fully returned, Dolan said.
“We’re probably 70% of the way back. But the next 30% isn’t going to be as fast a return as the last six months,” Dolan said.
Still, he said, “Our big hangars are full, which is a pretty darn good feeling right now.”
Janice Podsada; firstname.lastname@example.org; 425-339-3097; Twitter: JanicePods