FL_Technics_Training_1.jpgDue to the process of global fleet renewal the global MRO market landscape is rapidly changing. OEMs are continuing to expand their presence in the component and engine MRO sector, accounting for about 70% or even 80% of the services in the particular segments. At the same time, more and more independent MRO providers are left with the choice to either support the gradually retiring current generation aircraft fleet or collaborate with the manufacturers. However, the investments into less popular or increasingly controlled segments of the market may bring longer lasting results.

As the commercial aviation industry is recovering at a satisfactory rate, the demand for new aircraft is very unlikely to shrink any time soon. Two of the major manufacturers of aircraft – Boeing and Airbus – are not only signing a record amount of contracts for new products, but are also trying to increase their production rates. For example, Airbus currently delivers approximately 50 aircraft a month, which is 60% more than the average of a little more than 10 years. Such a demand naturally creates great opportunities for the OEMs to enter the MRO market, while more and more independent MRO providers are concerned with the means of staying competitive in the changing industry.

“Most MRO providers are forced to work on mastering the maintenance of new products, which involves many difficulties, from the cooperation with OEMs (which leaves them in the subordinated position) to investments into new technologies and the (re-)qualification of the personnel,” shares Kestutis Volungevicius, the Head of FL Technics Training. “Of course there is a huge fleet of current generation aircraft, which are not dominated by OEMs and require increasing attention as they are aging. The problem is that this fleet is inevitably diminishing.”

The Oliver Wyman consulting agency reports that in ten years’ time the amount of aircraft older than 10 years of age will decrease from 10 000 to 6000. The number of aircraft retiring past the 25 years of age limit has been growing for some time now, hitting 43% in 2011, i.e. there are twice as much of such aircraft retiring now than it was in 2007. Regardless of whether such retirement rates will moderate, it is obvious that relying on aging aircraft is not a strategy that is viable in the long-term perspective. At the same, different dynamics are observable in the airframe MRO sector, where OEMs play a minor role and exert less influence on the aftermarket.

Kestutis Volungevicius_Head of FL Technics Training_1.jpg“While airframe manufacturers continue to develop the aftermarket service offerings, at least for now they have been less successful than their engine and component manufacturing counterparts. Moreover, airframe maintenance works do not require as much investments into the new technologies and rely largely on human labour, thus providing great opportunities for MROs to provide complementary capabilities to airframe OEMs and increasing the attractiveness of their maintenance aftermarket package,” explains the Head of FL Technics Training.

Of course, in the meantime the gap in labour rates between most of the developing and developed countries is still too significant for the latter to remain competitive. It has caused some of the providers to re-focus their services on other areas of MRO. Nevertheless, according to Kestutis Volungevicius, it will not be long before this gap will disappear. As a result, the availability of the highest quality local service will not only create an opportunity for repatriation, but also represent a long-lasting niche for independent MROs: “Considering the development in the industry, the operators’ need to manage the continuous expansion of their fleet will only increase. Being ready to meet this demand by offering the service performed by personnel of highest-quality will ensure bright future for any independent MRO provider.”

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