In the UBM Aviation, Airline E&M: Middle East Conference held on 15 and 16 May 2012, the discussion centred on the future of the MROs, Engine/Component support and the impact of New Technology Aircraft on maintenance costs. Three topics that are interrelated and very relevant.
The new technology aircraft are increasing the involvement of OEMs in the MRO market, potentially squeezing out the medium and smaller MROs from the Global and MENA markets in particular.
Why would OEMs get into the MRO business; their short answer is The Customers Wants Us to Provide Support.
Boeing has Gold Care which integrates support with designated MROs, Suppliers and Boeing services while Airbus has the Airbus MRO Network of leading MROs capable of supporting the Airbus fleet.
While both major manufacturers rely on Independent MROs for the support, Engine and Component OEMs have a different view. Engine OEMs wanted the business and they had the means; they controlled data and supply of parts and hence who can and cannot maintain engines. Their approach varied from wholly owned MROs, Joint Ventures with MROs and Airlines to licensing arrangements. Component OEMs followed the same path.
OEMs do not necessarily make good repairers, it is a different mind set.
OEMs do not necessarily make good repairers, it is a different mind set.
The third element is Component Support. Operators are very reluctant to invest in components and parts inventories. The initial investment is high and with the current economic conditions financing is at best difficult. OEMs have provided operators with support plans for their specific components, how comprehensive these plans are, depends on the operator and the size of the fleet. Nevertheless, that means operators have to deal with multiple OEMs when they prefer dealing with a single entity that provides total support including components availability, repairs and warranty application in support of an agreed aircraft dispatch reliability and component availability. Such arrangements include Base Consignments, Pool Access, Repair Services and Line Support.
The industry is looking at a concentration of work with a few "GLOBAL" MROs for airframe and engines squeezing out the smaller MROs specially those not affiliated with an airline. As for components OEMs need to look at how operators want to be supported and take steps towards meeting these requirements.
The new technology aircraft promise a 25% reduction in maintenance costs due to new materials and better designs in the airframe and engines. However, the concentration of work and the involvement of OEMs is going to reduce competition resulting in higher rates and costs and lesser choices.
The industry is looking at a concentration of work with a few "GLOBAL" MROs for airframe and engines squeezing out the smaller MROs specially those not affiliated with an airline. As for components OEMs need to look at how operators want to be supported and take steps towards meeting these requirements.
The new technology aircraft promise a 25% reduction in maintenance costs due to new materials and better designs in the airframe and engines. However, the concentration of work and the involvement of OEMs is going to reduce competition resulting in higher rates and costs and lesser choices.
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