MRO Trends: Game-Changing Challenges Are Ahead

Feb. 19, 2015
OEM dynamics, heightened quality and reliability, capacity conundrum, and information technology are trends that could shape commercial aviation MRO over the years ahead.

With the 25th anniversary of AMT behind us, we thought a look at the trends that could shape commercial aviation MRO over the years ahead was in order – the management, markets, and technology of the near to mid-term future. Here goes:

Orbital dynamics of OEMs

If there’s one overarching challenge to the makeup of MRO as we’ve known it it’s “How do the [Part 121] airlines’ maintenance and engineering divisions stay relevant in an increasingly OEM-centric world?,” says Jonathan Berger, vice president of the consulting firm ICF International.

Berger says the “dominant position” already occupied by engine OEMs is only the beginning. Airframe work is falling their way, as are components. The reason?: cost entry by would-be competitors. Tooling and expertise can be so costly that the ICF executive airlines and MROs alike are saying, “’We can’t be bothered by that.’”

The implications of heightened quality and reliability

OEM product too tells the tale of what lies ahead. Berger says, “The quality of the products the OEMs are producing is such that the stay on wing is significantly longer than previous-generation aircraft and engines” – some two to three times longer than predecessor aircraft. For example, while a 767-300 might be scheduled for an airframe heavy check every 18 months, its 787 successor might have to undergo a similar inspection every 36 months. A checks which rolled around every 500 flight hours for a seven-six might be scheduled every 1,000 FH for the Dreamliner.

The upshot: fewer shop visits. Berger says that renders it even harder for airlines and MROs to “get in the business and … maintain that equipment in-house. There’s not going to be enough volume.”

Nor, perhaps, enough expertise, expertise gained the old-fashioned way: by working the aircraft type again and again. Higher quality means fewer shops visits. Good. But how do maintenance personnel develop and grow needed component-expertise when fewer parts are failing? “when they used to in the past.”

Interestingly, the ICF vice president doesn’t look for a further shakeout among MROs as a result of fewer maintenance visits. “I still think there will be enough work,” he says. “As newer aircraft come into the fleets, they are being offset by … retirement and parting out of older equipment.”

All this said, the question still stands: how do carriers and MROs stay relevant given the inexorable gravitational pull of the OEMs? Berger sees the emergence of more licensing agreements by OEMs of independent service centers, perhaps more joint ventures. Collaboration is the key, not necessarily competition.

The capacity conundrum

Seen against a backdrop of improved product, fewer maintenance visits, and OEM collaboration is the ever-vexing issue of capacity – ensuring there’s enough hangar space, and the people to man it.

“We’re starting to see some signs of additional capacity coming on board that maybe is getting a little ahead of where the market should be,” contends Jim Sokol. Having retired as Southwest Airlines’ vice president of maintenance operations, the long-time industry pro is now president of MRO Services at HAECO Americas.

He’s not saying the sky is falling, just keeping a weather eye out. Sokol notes in the past that the MRO industry “has been fast to overreact and add a lot of capacity irrationally.” Not this time. “What’s happened is that as the airlines have consolidated, MROs have been consolidating.” The upshot: “There’s been a better use of capacity in general by MRO providers, particularly on the airframe side.”

Whole fleet types – en masse – are being maintained by single, select MRO providers. This simplification of things means the ability to better plan, more meticulously map out, the meetings of empty bays and airplanes. While nailing the correct capacity will probably forever be an issue, “you’re not having peaks and valleys as much,” says Sokol.

Still, folks are adding bunches of bays. Aviation Technical Services opened a newly renovated 607,000-square-foot facility at Kansas City International Airport last July. As this piece gets set to go to press AAR operates out of a half-dozen locations, with a seventh site in Rockford, IL, due to debut in about 18 to 24 months.

While AAR Group vice president, Repair and Engineering, Technology Products Dany Kleiman believes the industry as a whole is still adding “way too much” capacity he contends the surplus is confined to the narrowbody arena. “[With] the narowbodies,” he says, “usually you’re dealing with overcapacity. The strongest are surviving and the weakest disappearing.” That’s why his company is focusing on widebodies “in order to capture some of the work which is being off-shored to … Asia-Pacific. We want to bring it back home.”

One way to control capacity, while accommodating growth in the same instant, is to become more efficient. Over the past four to five years Kleiman says AAR’s efficiency has skyrocketed. Five years ago, he says the MRO produced 3 million man-hours. Today it’s in the neighborhood of 5.5 million. Conceding AAR added a pair of plants over that time, Kleiman says, “The majority of the growth came through [then] existing facilities.”

The technology imperative

Enabling that growth was information technology, the homegrown variety. And therein lies another trend. Kleiman contends, “The majority of the actually day-to-day tools which are supposed to make our operation more efficient are going to be self-developed and self-deployed.” He’s a true believer in “each company working to enhance its own IT quality- and process-oriented tools.” AAR itself has a number of such self-made systems.

If custom-made managerial systems are trending, so too are ever more sophisticated sensors, the kind aimed at making life easier for the maintainer down on the hangar floor.

There are a slew of sensors in development, stuff that seems exotic today but could become commonplace before you blink. One such effort emanates from the National Institute for Aviation Research at Wichita State University. Working with the National Aeronautics and Space Administration, as well as the National Institute of Aerospace, NIAR is birthing something called SansEC, or Sans Electrical Connection. This ‘Smart Skin’ sensor is designed for use on composite aircraft structures. The aim is to provide lightning damage protection and diagnosis. It does this by sensing changes in the electromagnetic impedance of materials it’s near.

“What makes this sensor so exciting,” says Paul Jonas, NIAR’s Environmental Test Labs director, “is that we can use it in conjunction with the existing copper material typically used for lightning strike protection.”

If it proves out, that application would be worth it in-of-itself. What really jazzes up Jonas is the notion that “The SansEC sensor has other implications as well.” Among the possibilities: “a fuel gauge that doesn’t have to be located inside the fuel tank.”

A prepared release from NIAR says the sensor works even outside the tank because it uses “electromagnetic property changes to sense the addition or removal of fuel from the tank.”

Such a system could save technicians a handful of headaches.

Jonas tells AMT, “I think it has a wealth of potential to be a game-changer in the aviation industry.”

Higher quality product from OEMs that lingers longer on-wing; home-grown high-tech; collaborative arrangements among OEMs, MROs, and airlines; and the never-ending search for that elusive capacity sweet spot. The game is changing indeed. Best buckle up for the ride.