Monday, May 17, 2010

HUB MROs..... Dinosaurs Or Wave Of The Future.

To start, what is a Hub MRO? basically a one stop shop. In the 1970s and 1980s up until the mid 1990s most major legacy carriers operated large Maintenance and Engineering departments which took care of all their fleet maintenance requirements.

In the USA, it was cyclic with legacy carriers outsourcing some of their maintenance and downsizing with every downturn. Maintenance work was brought back in when airlines discovered they had no control over their fleet disposition when it was down for maintenance.

Europe took a more collaborative approach, with the introduction of the B747 and the other wide body aircraft, European legacy airlines formed Maintenance Consortia. KSSU (KLM, SAS, Swiss Air and UTA) and ATLAS (Air France, Lufthansa, Iberia, Sabena and Alitalia) these airlines shared the work along aircraft types (B747, A300 and DC10 and their associated engines and components). However, when the fleets expanded the lines were duplicated and eventually each carrier went on its own.

In the 1990s and 200s the Component OEMs and Engine manufacturers discovered a new revenue stream, repair and overhaul, essentially they competed with their own customers. It was very easy to control the market because the controlled technical data. Of course if you were a big airline and put in mega orders you could dictate to the OEMs whatever you wanted.

There are a dozen or so Hub MROs, mostly major airlines and a few MROs affiliated with other major carriers. Will they edge out the smaller niche MROs? probably not. Will they survive?depends on a few important factors:
1. Ability to finance expansion
2.Technical Support from Manufacturers
3. and the most important factor is a sustainable supply of efficient, cost effective and trained work force.

The human capital issue is going to be the detrimental factor, with all the discussion about the shortage of skilled technicians and engineers.

1 comment:

  1. Ossama

    I agree with you there are a number of major world-wide players and as you say in most cases centreed around the legacy carriers, however, I think the concept of teh one-stop shop is losing its shine. I believe that heavy maintenace, the traditional C/D check will continue to be contracted out, likewise major assemblies; engines, APUs and undercarriages.

    For some activities technical services, there are cut-off points as a fleet grows where the decisions are not clear cut, where it warrants more investigation by the carrier as to who the most appropriate service provider is. The decision point is not fixed but based on aircraft type, annual utilisation of the fleet, network structure and total fleet size. Additionally, the regulatory authoirities are requesting (demnding) a greater level of involvement by the airline in the managament of their fleet, the carrier now has to pay for the service and to pay for increased oversight, not always a cost saving!

    The market is going to become more interesting that was possibly percieved a few years ago.

    Malcolm

    ReplyDelete

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