It’s been a long path for business aviation since 2020 and the onset of COVID-19 disrupted the world. There have been ups and downs, and while no one has a crystal ball to forecast exactly what the year ahead will bring, AMT polled some of the industry’s top minds to give a good idea of what to anticipate.
The majority of the voices you’ll hear from in the coming pages were interviewed at this past year’s NBAA-BACE held in Orlando, Florida. You can view those extended interviews between AMT Editor Walker Jaroch and the various thought leaders at AviationPros.com/21293022.
Broadly, 2022 was an up year for business aviation. David Jensen, senior vice president - aircraft maintenance, ACI Jet, described it as great year for the industry.
“I think everybody would agree that it was a great year for business aviation as a whole. I think everybody saw increased aircraft sales. Aircraft usage is up. Of course, that means maintenance is up. All of that translates to good news for business aviation,” Jensen said.
Spencer Hoggarth, regional sales manager, Flying Colours Corp., echoed similar sentiments, saying that 2022’s rise in business travel naturally led to an uptick in MRO work.
“We’ve been delivering a lot of MRO projects, paint projects, interior projects – sometimes all three at once. One of the biggest challenges we have is hangar space. We have more demand for the product than we have hangar space for,” Hoggarth said.
Francisco Zozaya, chief revenue officer, JSSI added that 2022 was a strong year for business aviation, particularly the maintenance services arm of the industry.
“A year of such high utilization has affected the maintenance schedule, and operators are looking for a partner in tracking and overseeing their maintenance requirements, ensuring slot availability, procuring parts in advance and minimizing downtime,” he continued.
But as Hoggarth noted, the year was not without its challenges. In fact, Zozaya called 2022 the year of challenges.
“Material and labor shortages, increased parts lead time, and the lack of rental assets and slot availability resulted in longer shop turn times. High demand paired with low supply created difficulties in acquiring aircraft for tear down, and inflation rates accelerated the costs of parts and skilled labor.
“While it has been difficult for the whole industry to return aircraft to service quickly in this environment, we saw increased demand for our core three product lines: Hourly Cost Maintenance Programs, Maintenance Software, and Parts & Leasing,” Zozaya said.
Jensen added that the pilot and technician shortage were two of the greatest obstacles they experienced, along with the supply chain issues that plagued the entire industry and beyond.
“So, I think that while there was a lot of good things that happened, we certainly saw our struggles as well,” Jensen continued.
The Struggles and Success Lingering Into 2023
While there are many variables at play, Ron Jennings, vice president of sales – corporate MRO, C&L Aviation Services, said he anticipates the growth the industry saw in 2022 to continue in 2023.
“I don’t think it’s going to plateau. I think the wild card in this whole thing is, what’s the economy going to do? And how will people react to that? And none of us have the answer to that. So we carry on and wait and see how it affects us and we react. But no, I think we’re all going to be very busy still,” Jennings said.
Part of what will be driving this uptick in 2023 is the market for buying and selling used airplanes. Jennings said it has steadied some but is still slow, with there not being many airplanes for sale.
The slowdown in aircraft delivery is being driven by supply chain and workforce issues, which Jennings anticipates will continue for some time and is causing a shift in the way people are approaching their aircraft.
“Some of the trends we’ve seen is, since the opportunity to get a new airplane’s kind of uncertain right now, they’ve decided, ‘well, let’s invest in what we have.’ So what people are doing is they’re taking older aircraft and they’re putting their stamp on it, they’re putting a new interior in it, or they’re putting a new paint job in it. They’re putting a new flat panel cockpit in it to try to keep it modernized into the next gen avionics world. And so all those things are good for the MROs. So, I think we’re going to continue to see a pretty busy year ahead of us,” he said.
Michael Parrish, vice president of sales, Elliott Aviation, agrees.
“There’s still a supply chain issue. And that seems to be the buzzword, but that’s definitely still the case. What we’ve seen are many people are kind of reaching further than the normal scope to find airplanes. And they’re requiring a lot more maintenance to get them up to current specs and regulations. So, it’s been very strong for MROs, and we see that trend continuing through 2023,” he said.
Yoel Arnoni, CEO of AV8 Group, is also forecasting much of the same for 2023 as in 2022, and that business aviation is insulated from the whims of the larger economy: “I don’t see any radical change. We seem to be insulated from the general economy. If you have enough money to fly around in a corporate jet, the price of jet fuel, it really doesn’t make a difference. So, we seem to be somewhat insulated from the general economy and so I think the next year for corporate aviation, I would say, would be stable.”
Arnoni finds himself more concerned with the challenges faced in 2022 continuing throughout 2023, saying he foresees them continuing for some time – and hopefully not worsening.
“Supply chain is killing us. We are a repair station but we also have a PMA side to our business and we make most of our own parts, and lead times are getting extraordinary. We had a supplier here yesterday that used to consistently give us eight- to 12-week lead times, and we’re now 25- to 30-week lead times on the same product. It’s crazy, and it’s the same year for everybody in aviation,” he said.
Complicating the supply is the war in Ukraine. While the continuing conflict between Russia and Ukraine has exacerbated supply chains since its start in February of 2022, Arnoni points out an additional layer of the issue – the military is pulling from the same supply pool as everyone else.
“You hear the headline on the news that we’re giving billions of dollars of aid to Ukraine. … Most of that aid is military and missiles and drones, and all of the surrounding countries want more aircraft and more drones and more missiles. Someone’s got make all that. And when Lockheed and Boeing …start filling up the supply chain to make all of that, little guys at the end of the line get pushed back and that’s what is happening.
“The people that make the metal are having a supply chain problem. It sits out in boats in the middle of the Atlantic and when it gets here, the military eats it all up. How are we supposed to make any parts if we can’t get the materials? And then when we get the materials, the part has got military priorities. So supply chain is an issue. It’s huge and it affects everybody in their business, whether they make their parts or not. Because if they don’t make their parts, they got to buy them from someone that’s got to make them, and we’re all in that same boat. Or maybe I should say plane,” he details.
All of the people Jennings said he speaks with in the MRO world are seeing the exact same things. Everyone is trying to find the same critical parts to keep airplane flying.
“We’re all trying to get creative. I mean, with FAA regulations and certifications, you can only be so creative. You’ve got to stay within those limitations. But it’s creating a very close-knit community because it’s not really what you know, it’s who you know. And so we’re at a trade show like NBAA today, and we’re connecting with those people. Do you have this? Do you have that? Where can I find this? And those connections and relationships really help you out because you can find most of these things, but it’s not easy. And that’s going to continue for a while,” he said.
Lessons Learned for a New Year
One issue that's likely to linger well into 2023 is the technician shortage. Jensen said there’s no real clear answer in sight, so companies are taking matters into their own hands.
“It’s going to get worse before it gets better. Something that we’ve done as a company on the central coast is we partnered with our local community college, and we started an AMT program there and the first cohort’s actually going to kick off in January 2023. So 19 months later we’ll see our first graduates and be able to accept more technicians into the workforce, both locally in our community as well as throughout the US. So we’re doing our part to try to help solve that problem. But I think it’s going to take a very proactive approach where people really push to find solutions to get more people engaged in the aviation community and understand that there’s a career out there for AMTs,” he said.
The tactic is a positive takeaway from the obstacles the industry faced in 2022 — focus on what can immediately be controlled. In this case of the technician shortage, it’s employee retention and creating an environment people want to be a part of.
“Back in the day, employees were looking for a place that they could call home for a career. That’s no longer the case... A two-year stint is a career at a company for young people coming out of the tech schools, etc., these days. So you’re trying to get as much as you can out of them, and try and keep them within the family as long as you can,” said Parrish.
“Some of the lessons that we feel like we learned is that we continue to be flexible and to continue to adjust as the market trends,” added Mike Saathoff, director of sales operations and engine & accessory sales, Elliott Aviation. “We’ve seen the shortage of workforces, so we’ve had to continue to offer internships. We’ve also partnered with some of the local high schools to try to provide paid apprenticeship programs.”
At Flying Colours, Hoggarth said a similar approach is taken to address the technician shortage.
“We use in-house training to mitigate the workforce issue as best we can. We can take somebody right out of school and train them to do a lot of the jobs in our shops because we have a good in-house training program,” he said.
“Really focusing on the employees that we have and the retention of those employees,” Jensen added, "is important because everyone wants AMTs right now and they’re moving around quickly."
Hoggarth said that they are even taking issues with the supply chain into their own hands where possible.
“I think manufacturing locally whenever possible is a big one. The pandemic brought that to light, that it’s a lot more fun to go to your neighbor than it is a whole other country. Flying Colours is one of those companies that likes to manufacture as much stuff in-house that they can. So whether it’s our CNC shop or anything else, if we can do it, we’ll try everything we can to do it in-house. And if not, we’ll hopefully find someone local to do that for us,” he said.
To successfully execute these kind of in-house initiatives in the new year takes the right kind of planning, and it’s just that – planning – which Arnoni said should be 2022’s major take away.
“Planning, planning, planning, planning. You have to order your resources months in advance. I can make that change. Of course, I’m going to be hurting until I catch up. But you can make that change. Relying on outside services that take longer, that’s harder. You got to have a deeper parts pool, more resources, more parts, more money,” he said.
“I think just plan ahead,” Hoggarth added in agreement, “Plan your maintenance ahead, figure out when you’re going to want the aircraft painted, because it won’t be next week, you’re going to have to make that months in advance. Sometimes we have people coming to us a year in advance saying, 'We want our aircraft painted. We want our interior done, or a few things to the interior.' Maintenance, same thing. Just plan ahead. It helps us out. It helps you out.”
Final Predictions for the Year Ahead
Jensen is forecasting a good year ahead, but not one without struggles.
“We’ll all see what the economy does, but I think business aviation has really gotten itself to a point where people recognize the value there. I don’t think that’s going to go away. I think some of the stigma that may have been there before in previous years around the previous recession is no longer there. I think that it’s an asset to everyone and to all businesses that are trying to grow. So I think we’re in a pretty good spot and that means good things for maintenance as well,” he said.
Hoggarth is anticipating a slow ease off of the supply chain issues and a return to “whatever the new normal is.”
“Big growth happened during the pandemic in our industry. A lot of big growth. And there’s a lot of new owners to the market too. There’s people that never expected to have a corporate jet before and suddenly it’s justifiable, because it just makes sense all of a sudden,” Hoggarth said.
Prior to 2023, Parrish said Elliott Aviation was already beginning to see strong signs of recovery, with their shops and others around them full.
“The demand is definitely here. Many of the discretionary spend dollars, as we like to say, for paint and interior and avionics upgrades that are not mandatory, are still being spent. So the owners and companies are still spending the money for the airplanes to keep them current, and keep them operational, which is a definite good sign for the industry,” Parrish continued.
Others are less optimistic, forecasting a plateau and continuing struggles for some time into 2023.
“We’re seeing a year-on-year inflationary trend in parts and labor affecting the cost of maintenance. We’re also still seeing the backlog of shop availability and turn times, which we expect will remain a challenge in the near future,” Zozaya said, adding, “2021 and 2022 showed historic growth in utilization, but we expect this trend to plateau in the first half of 2023.”
Arnoni agreed with Zozaya’s assessment of a plateauing year, but given the ongoing struggles facing the industry, keeping up with that work might prove to be the challenge.
“Well, economically, I think that we are going to see the same amount of business come in the door. The need for our products and our services, I believe is going to be consistent. It’s just going to be a lot harder for us to provide that service. But ultimately, I think the same amount of work is going to come in whether I can get the same amount of work out, there’s the challenge,” he said.
Stepping into 2023
Since NBAA-BACE, the industry has already seen handful of hits and near misses aligned with the predictions laid out above.
In the U.S., a rail strike was narrowly averted at the beginning of December, which would have greatly intensified the struggles with, if not outright crippled the supply chain. Rail strikes are still being threatened Britain, as AMT goes to press.
Internationally in December, Congress approved $50 billion – in mostly military – aid to Ukraine to support their conflict with Russia, and China ended its zero-COVID policies at the same time the world saw the new COVID XBB.1.5 omicron subvariant emerge. These factors show that while the supply chain issues appear to be easing, the struggles that exacerbated it to begin with are still well in place.
On the technician side of the industry’s struggles, the Aviation Technician Education Council (ATEC) released the 2022 edition of their annual Pipeline Report in November. ATEC’s report shows a trend in the right direction, but with numbers still falling short of what’s needed.
ATEC reports that 6,929 people received their FAA mechanic certificate, a 33 percent increase since their last report was published in October 2021. ATEC notes it’s the largest increase in recent history, it fell short of 2019 levels and did not make up for the previous year’s 30 percent drop in certifications. The Pipeline Report estimates the pandemic has cost the industry 5,000 new mechanics.
ATEC says the mechanic pipeline will need to increase by at least 20 percent to meet projected workforce demands. In comparison, aviation maintenance technician school enrollment is only growing by 2 percent each year. The Pipeline Report states that A&P schools are experiencing only a 56 percent load factor and the lack of program awareness is likely a major limiting factor to growth. An increase in high school pipeline programs could be a solution, the ATEC report states.
And while the supply chain and technician shortage remain two of the most pressing industry challenges, 2023 is already proving to have a few new tricks up its sleeve. On Jan. 11, flights across the U.S. were grounded due to a failure of the FAA’s Notice to Air Mission (NOTAM) system. The FAA has blamed the outage on a damaged database file. While this incident will likely go down as a one time fluke, it shows that the long concerns around aging technology and infrastructure in the aviation industry have not been supplanted by COVID-19's issues, despite the focus being put mostly on them since.
As the industry steps into 2023, there are many signs for optimism as shown by the easing and avoidance of new supply chain issues and the uptick in new mechanic certifications. The holiday season also showed people are more willing to travel than ever since the pandemic era began. Though 2023 is sure to bring with it new challenges, the industry has weathered much since COVID-19 began, and the lessons learned since will continue the overall trends of growth experienced in 2022.