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Aftermarket Analytics Gaining Ground, But Questions Remain

OEMs are out front now, but several factors indicate their advantages could be short-lived.

Airlines and manufacturers are starting to reap measurable benefits from aftermarket-focused analytics, but maintenance, repair and overhaul’s (MRO) “big data revolution” remains far off and absent clear definition due to a few major obstacles, Oliver Wyman’s 2016 MRO Survey says.

Airlines, aided by e-enabled aircraft such as the Boeing 787 and Airbus A350 and sophisticated programs offered by airframe and engine manufacturers, are embracing data-driven aircraft health measurement (AHM) and predictive maintenance (PM), the survey finds. However, “sophistication at the user level remains nascent,” it adds, suggesting that programs offered and managed by OEMs are most effective.

The survey found that 56% of operators use AHM for some or all of their aircraft, while 44% use PM. Not surprisingly, engine maintenance, the largest slice of the MRO revenue pie, is the most sophisticated arena. Nearly 90% of respondents say they apply AHM—primarily condition monitoring—to their motors, while 42% leverage PM.


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This story is a selection from the March 14, 2016 issue of Aviation Week & Space Technology. New content posted daily online.

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Though use of data-driven MRO programs may be broadening, it remains shallow at the organizational level. The survey finds “59% of airline respondents plan to restrict AHM use to small subsets of data, either directly or through a third party, rather than pursuing a broad or comprehensive approach. For those using PM, 83% focus on narrow subsets, while only one in five expect to apply predictive techniques to all available data.”

Part of the problem: too many numbers. Newer aircraft “capture reams of data not available from previous-generation aircraft, creating new storage, organization, and application challenges,” Oliver Wyman notes. “As a result, many operators report modest big-data programs, reflecting limited readiness for these new challenges.”

This, says the consultancy, indicates that operators are focusing on datasets with the most perceived return, or simply cannot manage more than a slow stream of data.

Still others remain skeptical that investing in analytics will yield significant returns—at least not yet. “Responding carriers using AHM, and to a lesser extent PM, are seeing improvements in reliability, but evidence of other benefits is less pervasive,” the survey report notes. “Other sources of value traditionally required in investment cases (such as spare parts reduction, shorter turn times) are less commonly experienced, suggesting significant work remains to tap the full potential big-data technologies offer.”

Skepticism on near-term return on investment is not the same as long-term doubt over analytics’ potential. Nearly 60% of respondents see AHM emerging as a “core decision support tool,” and 53% plan to fund AHM-related programs in the next three years.

While consensus is building over the eventual value of analytics programs, early adopters are helping create a fragmented market for services.

AHM is being dominated by OEMs, particularly on the engine side. General Electric’s recent migration to Predix, an internally developed software platform, has jump-started its ability to crunch fleet data and extract meaningful takeaways. On the airframe side, both Boeing and Airbus are slowly growing their health-monitoring and data analytics customers—in part bolstered by new aircraft such as the 787.

PM is seeing more diverse options, with some choosing customized systems or “bespoke offerings” from outside of aviation.

While OEMs are clearly out front, Oliver Wyman suggests their “narrow focus” means the head start is not likely to keep them ahead of aspiring service providers. “As with the traditional parts-and-service aftermarket, [OEMs’] interest is unlikely to extend beyond their own equipment,” the consultancy says. “As a result, there remains room for in-house departments, third-party maintenance providers, consulting firms, [information technology] companies, and unknown new entrants to discover value-adding niches.”

OEMs will do their part to create those niches, “investing additional resources in promoting understanding of the technology’s potential and advancing usage at airlines,” Oliver Wyman continues. “Their path to monetizing the technology may include bundling analytics services with their aftermarket offerings or employing the data to embody performance improvements in their delivered and new-build equipment, seeking to demonstrate performance superiority to win outsized share at the point of aircraft selection.”

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Airlines will counter by engaging “a cross section of stakeholders” and adding data scientists, who will team with traditional engineers to set up new internal analytical capabilities.

“Long term, these efforts will lead airlines from static, backward-looking reliability and maintenance programs to preventive, probability-based approaches” that provide “unprecedented transparency into the condition of their aircraft,” Oliver Wyman says.

But for now, the consultancy adds, promise and patience rule the day.

“With major industry-level issues to resolve, such as standards and ownership rights for the new data, the eventual shape and size of this growing slice of the aviation aftermarket will not be known for several years.”

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