ALEXANDRIA, VIRGINIA – In the wake of 2020’s unprecedented economic disruptions, the aviation maintenance industry is showing signs of recovery. The Aeronautical Repair Station Association’s (ARSA) 2021 member survey illustrates cautious optimism tempered by renewed concerns about the technician shortage, which threatens to prevent companies from growing and seizing new opportunities in the next year.
One hundred sixteen U.S. companies representing 196 FAA-certificated repair stations in the United States responded to ARSA’s 2021 survey, which was conducted online in February and March 2021.
Total aggregate employment at companies responding to the survey was 22,952 workers on Jan. 1, 2020 and 19,360 workers as of Jan. 1, 2021, a 15.6 percent year-over-year drop. However, those numbers are better than the 25 percent year-over-year decline documented by ARSA last summer and 19 percent drop reported by members in October 2020. A majority of respondents (55.3 percent) expect their company’s revenues and markets to grow in 2021, with 25.2 percent expecting business activity to stay the same and just 6.8 percent anticipating contraction (roughly 12 percent were unsure what the future holds).
Without government assistance, the U.S. maintenance industry would be in much worse shape. More than half (56 percent) of respondents reported receiving forgivable Paycheck Protection Program loans, 14.6 percent received Small Business Administration Economic Injury Disaster Loans and 7.6 percent receive Air Carrier Payroll Support Program (“payroll support program” or PSP) grants. Maintenance companies received hundreds of millions of dollars in PSP support according to the U.S. Treasury Department.
With business picking up, repair stations are once again hiring. Well over half the survey respondents (59.2 percent) plan to add workers in 2021, 33 percent do not expect to change the size of their workforce and only a small sliver (1.9 percent) anticipate layoffs.
With so many companies on track to hire, the technician shortage has reemerged as a primary concern. More than half (52.5 percent) of survey respondents cited “difficulty finding/retaining technical talent” as a major strategic threat to their companies, second only to “overall economic uncertainty” (65.4 percent). Respondents reported 907 unfilled technical positions, representing 4.6 percent of the total reported Jan. 2021 workforce.
Other strategic challenges include regulatory costs/burdens (selected by 35.6 percent of respondents), inconsistent enforcement of FAA rules (27.7 percent), inconsistencies between national regulatory systems/duplicative oversight (22.8 percent), restrictions on international trade/markets (19.8 percent) and lack of access to capital for investment in facilities and equipment (5.9 percent).
The survey also highlighted the U.S. maintenance industry’s connections to both the global and local economies. More than three quarters (76.2 percent) of responding U.S. companies held at least one foreign maintenance approval in addition to their FAA repair station certificate. Those foreign approvals allow U.S. facilities to perform work on foreign aircraft and related components. On average, 31.3 percent of revenue is attributable to work under a foreign certificate, the survey found.
Repair stations also have strong connections to other businesses in their own communities. The median reported number of external vendors per respondent was 16: nine certificated and two non-certificated companies supporting maintenance activities and five companies supporting general business operations (e.g., janitorial services).
In addition to helping ensure the airworthiness of commercial and general aviation aircraft, U.S. repair stations are also essential to national security and public safety. Two thirds of respondents (66 percent) provide services to at least one government entity, with the military the largest customer (52.4 percent of respondents) followed by other federal departments or agencies (36.9 percent), state/provincial governments (21.4 percent) and local/municipal governments (14.6 percent).
While maintenance is the primary business activity of most ARSA members, aviation-related manufacturing is also an important revenue source. Close to one third of respondents (32 percent) hold FAA production approval, with 23.3 percent holding parts manufacturer approval, 15.5 percent holding a production certificate and 5.8 percent holding technical standard order authorization.
Respondents also evidence a high level of satisfaction with ARSA. On a scale of one to five, with five meaning “very satisfied”, the association received an average score of 4.58. The association’s most valuable services, according to respondents, are its regulatory compliance support (4.58 out five, with five meaning “very valuable”), access to regulatory/legislative expertise (4.53), free regulatory compliance resources (4.45), congressional advocacy (4.32), ARSA model manuals and supplements (4.16) and the Dispatch and hotline newsletters (4.14).
“Thanks to all the ARSA members who took the time to share their opinions and data in our most recent survey,” ARSA Executive Vice President Christian Klein said. “It’s been an unprecedented year for the maintenance industry, but with government assistance, our members have weathered the storm but now appear to be on a more positive economic trajectory. With the worst of the crisis behind us, ARSA looks forward to working with its members and industry partners to keep the recovery on track.”
