MRO Outlook Report: Tech Eases Challenges

May 31, 2023
Three years post-COVID, the MRO industry faces a backlog of work with unprecedented challenges and opportunities moving forward.

It’s been three years since the COVID-19 pandemic hit, and the MRO industry is well on the path to recovery. MROs are still dealing with the lingering effects of the pandemic, but new technology and years of experience doing business in the pandemic age has brought a sense of optimism.

AMT spoke with a handful of experts in the field at this year’s MRO Americas trade show, held in Atlanta, Georgia. Here are their insights into the state and future of the MRO industry.

Today’s Trends

Resoundingly, what’s being seen is a great increase in work from years past. Jimmy Wu, president & CEO of Infinity Air Group, said 2022 was a year of recovery, which has caused an increased workload in 2023.

“Going into the fourth quarter of 2022, we realized that we needed to grow significantly fast because, there a backlog that was there and has continued to pile on,” Wu said.

Phil Bathurst, president & CEO, Aspire MRO, said they have so much work that they’re having to turn it away.

“We have so much work that we're literally turning work away, not doing any marketing, and I'm hearing that from most MRO leaders, and I'm also hearing that from most of the American-based airlines. They're always looking for a quality MRO that can do the job, there just does not seem to be enough space right now,” he said.

It seems for many, the writing was on the wall in 2022 to set up this year for a hard bounce back. Though, as Derk Nieuwenhuijze, VP digital, marketing & communication, AFI KLM E&M, explained, it was largely dependent on what travelers’ attitude would be. Industry insiders were sure there would be a return, but were uncertain to what degree.

“I do think if I compare to last year where we were a bit hesitant with, okay, we're coming out of COVID. Well, we were certain to come back, but how quick would it come, et cetera. Now we're much more confident that the demand for our tickets, for our passengers, it's really back and we're really happy about that,” Nieuwenhuijze said.

Bathurst added that he sees the airlines looking for long-term relationships now that their fleets are back, adding to the demand for wide-bodied aircraft.

“To me there's a lot of room for some additional MROs in the US, or at least hangar space. I just spoke with some experts on hangars about wide-body hangars. Our hangar will hold six 777s and it's a large hangar; there's not a whole lot of those. I just asked, ‘In the Americas, are there any wide-body hangars available at all,’ and the answer was no,” Bathurst continued.

What’s helping to take up this hangar space is the conversion of passenger planes into freighters (P2F). Aspire’s focus is on wide-body P2F conversions, and Bathurst said what they’re seeing right now is that American-based airlines are all looking for a home for similar wide-bodies in the US.

“Then also we're seeing the 777 P2F really take off with extending the life of the 777,” he continued. “The 777 looks like it's going to really be a really good cargo hauling aircraft. The order book's lined up between ourselves and Mammoth Freighters, who's actually doing the engineering, for several years. That's new to the market, so what that's doing is taking up hangar space, and we're seeing a lot of that throughout the world.”

In addition to increased demand, what’s at the top of many minds inside the MRO industry and on the passenger side is sustainability, and with it, the innovation to drive it.

“We see more and more customers who are both passengers and MRO customers actually who are talking about sustainability that are willing to invest into sustainability. And it's really something that we are also looking into,” Nieuwenhuijze said.

In their effort to push sustainability, AFI KLM E&M was the first to do a 100 percent sustainable aviation fuel (SAF) run on its engine test cell at Amsterdam Schiphol.

Wu also highlighted the importance sustainability is beginning to have in the industry. A member of the ASA Aviation Suppliers Association (ASA) and Aircraft Fleet Recycling Association (AFRA), Wu recalled how the groups took down two 787s that have been cannibalized, taking the wings and the fuselage off, bringing them back, storing them in the United States, then working with different universities to see how they could repurpose and recycle the materials.

“I know it's not the core business of an airline, but sustainability is not only about recycling, but about improving efficiency, improving the bottom line. Saving the environment is actually very, very profitable for airlines, and all of us are doing our part to do that right?” he continued. “Burning fuel, having a ton of waste, hydraulic fuel, ton of chemicals on our planet is just not the way to go.”

Challenges Met with Tech

Manpower, Bathurst said, is still the major challenge facing the industry. And while the concerns over employee retention and the looming technician shortage haven’t changed from previous years, now MROs are focusing on how they can optimize the talent they do have.

Instead of the focus being only on getting more manpower, Bathurst said the focus he’s seeing now is working smarter. What’s the best way to get more manpower? Finding or creating a pipeline? Working with schools? Increasing efficiencies through technology and analytics?

Aspire, for example, has gone completely paperless as a way to optimize operations. What that’s allowed Aspire to do is fill some positions with people who aren’t licensed because they're not doing jobs that require licenses.

“We're completely paperless. Being part of completely paperless, everything you're gathering is in your system. Rather than having one of my mechanics walk away from the airplane, walk over and get tooling or walk over and get materials, it's delivered to him by a non-mechanic,” explained Bathurst.

Aspire has been in business for less than a year, so their youth has made their move to paperless smoother than if their operation had years of processes and data to digitize. Bathurst said it can be challenging to go paperless and get everyone onboard with new processes when there are years of legacy processes to switch over, but the philosophy behind paperless optimization is largely the same.

“I think what people need to understand about paperless is it's tying you back to analytics. Once we do the job, we fully understand how long it should take, when we should do it, how we flow it. What we're trying to do is really up the efficiency level,” he said.

For example, Bathurst described how traditionally, when a mechanic gets a job, the first step is to check the stockroom and verify the correct parts are on hand. With parts in hand, the process is repeated with tools, with all the back and forth eating away chunks of the day.

Instead, with the digital assigning of tools, Bathurst said, a mechanic who would've spent till lunchtime to really get started on the job is starting on the job immediately with support from other people..

Without the analytics and accountability, the digitalization would fall flat, which Bathurst says too many people don’t grasp – paperless is not the be-all and end-all of optimization.

In addition to being paperless, he said, “We have a better view … Right now in my hangar, a hundred mechanics out there working literally could pull up in front of me now exactly what job every one of them's on, how long have they been on it, when did they start, when does it stop, et cetera. It gives us those analytics to be able to be more efficient,” he continued.

Wu advocates for the entire aviation industry undergoing a digital transformation sooner rather than later. He said he’s heard projections that such a transformation may not happen until 2050, which he says is unacceptable.

“I mean, we are already in space. We're going to be on the moon way before 2050. We'll be on Mars way before 2050, but digital transformation in the aviation industry is not going to happen until 2050?” he said.

He said the industry’s dependency on paperwork and forms, which can be lost, forged and cannot be shared quickly is crippling.

“It's completely inefficient. So on the top of my list, that's something that needs to happen, needs to happen quickly within our industry. We need our government and other governments to help us and support us,” Wu said.

Outside of paperless technology, Nieuwenhuijze points to a number of technologies that COVID helped fast-track. He says the challenge with adopting new technology is balancing tech innovations with social innovations.

“How do you get cutting-edge technology into your workspace that people want to use and are able to use? A lot of AR, VR robotic solutions were out there, but it was difficult to put them into practice. But you really see, that also partially thanks to the COVID situation, people getting more digital themselves as well, that we can leverage and put that really into the workforce,” he explained.

Then again, he said partially thanks to COVID, people in general are getting more digital, which is a benefit.

“I think in terms of deploying technologies and deploying new innovations into that, I think we are really making big steps forward, whether it's predictive maintenance or using different robotic solutions in our shops. I think COVID helped to accelerate a lot of those trends,” he said.

Looking Towards Tomorrow

As he looks to the future of the MRO industry, Bathurst sees wide-body aircraft as being pivotal. He said many major US airlines have been sending these aircraft overseas for service. He believes they’re beginning to see a drawback to that based on how the international landscape has been shaped by outside events recently – such as the varying responses and restrictions placed country to country in response to COVID. This has airlines looking for stateside operations.

“I believe that if somebody had the space to really set up to do wide-body maintenance, there's a huge opportunity in that area because if you could save an airline from flying a plane to the other side of the world to get it done in an area that you're never fully aware of the socioeconomic climate, you could really do a lot in the US,” Bathurst said.

Bathurst points to hangar space and the lack thereof as indicative of this trend.

“It's amazing how often we're called about hangar space. A lot of the hangars being built nowadays … Everyone's looking for the 737s and the narrow-body aircraft, where I don't think there's a ton actually being built for the wide-bodies. And I do believe that opportunity's out there at least as much as we hear it. There's quite a bit we hear on that,” he said.

Because of that opportunity, Bathurst expects to either see new players entering the MRO industry or existing MRO groups expand. He says if the airlines are having issues finding space to get their aircraft in, it must be hitting the leasing companies and smaller airplanes facilities too.

“I do think we'll see a pretty good size growth, and a trend I've been seeing is the relationships between the airlines and the MROs is getting much more like a partnership. They need to work together. They depend on one another, and I think the top tier airlines are getting that and understanding that. They're going with more long-term contracts and working together with manpower issues or manpower concerns and trying to level load the work,” Bathurst continued.

Partnership is the key component Nieuwenhuijze sees for the future as well. He said COVID gave the industry time to reflect. With big challenges on the horizon from the environment to the supply chain, the industry will need to come together.

“We are having really some unprecedented challenges, I believe, going forward. And I would say if we find somehow to work together with other partners and really embrace certain elements of change for the better, then you can both solve those issues that we've been talking about, but also really look forward to a better MRO industry that creates more value for airlines all around the world. And I think that that will be the ambition that we should have,” said Nieuwenhuijze.

But solving these looming problems will take talent, which is why for Wu, shoring up the workforce is priority number one.

“The number one thing I would say is what we are doing, I recommend to our own staff, we talk about it every single meeting: is develop talent and retain talent. And when we say develop talent, we realized that after COVID, how much talent we lost, and how generous that talent was there,” said Wu.

Wu is making sure that Infinity Air Group develops talent in-house and that employees have the opportunity for growth.

“Bring in subject matter experts, provide the training that's needed, provide the growth plan for each person from executives, all the way down to the technician, all the way down to the person that came into our company that's currently a painter, and give him that opportunity to be a mechanic, or be in quality control, or go into the sales.

“Developing talent is the biggest thing for MRO, and when you are there and make the effort to develop that, you will also be able to retain that talent in-house,” said Wu. 

About the Author

Walker Jaroch | Editor

Contact: Walker Jaroch

Editor | AMT

[email protected]


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