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MRO in 2016: Happy New Year?

Nearly one week into the New Year and with the chimes of Auld Lang Syne becoming an increasingly distant memory, plans and visions for the MRO sector in 2016 are beginning to take shape.  

After a 2015 characterised by airline consolidation, lower fuel costs and the continued rise of OEM dominance in the aftermarket, the year ahead is sure to be one of opportunity for a sector taking plenty of positives into 2016.  

Nevertheless, industry figures have warned of the significant challenges ahead, most notably the impact on independent MROs from their larger competitors in the OEM sector.

One of them, Christopher Doan, vice-president at aviation consultancy Oliver Wyman, told MRO Network that in 2016 the issue of OEM aftermarket growth will pose a growing problem for owners of small MRO businesses.

“Small MROs particularly are feeling the squeeze, as OEMs maintain a firm grip on the newer technology and the older technology components retire with the increase in parked aircraft,” he says.

But such grave predictions aren’t deterring some firms buoyant after a successful 2015. Jonas Butautis, CEO of Estonia’s Magnetic MRO, which focused on expanding its capabilities last year, says despite increasing OEM aftermarket activity and capital intensive MRO services locking out independent firm from new generation technologies, these factors won’t determine its future.

Instead, it is quite the opposite. “We look at them as opportunities to find our position in this fast changing, exciting, dynamic industry. In a few areas, such as 3D printing, IT development, OEM partnerships, we plan to lead the way,” he explains.

From a regulatory perspective, Sarah MacLeod, executive director at ARSA, said she hopes for a more stable year after a “volatile” 2015.

Speaking to MRO Network, MacLeod says 2015 proved “a year of conflict between philosophy and practice”.

“Regulators and legislators sang about “Safety management systems” and “compliance philosophies,” but the actual focus of regulation and policy drifted away from common-sense dedication to safety,” she says.

“Bit by bit, regulatory requirements grow more complex and industry costs increase – it’s death by a thousand pinpricks.”

Being from a trade organisation, MacLeod naturally cites increased activism as a key factor in ensuring the year ahead remains a stable one.

“Proactively engage with governments and regulatory bodies. Tell the right stories to the general public, which typically hears of maintenance only in the context of delays and disasters. Recruit talented professionals and bolster their skills to serve the flying world.”

“And most importantly, support the organisations that stand up for industry.”

Will 2016 be a good year for the MRO industry? Have your say in the MRO Network poll on our website.

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