While the commercial aftermarket is undergoing seismic shifts on several fronts—from continued OEM advances to harnessing analytics to support operators—airframe MRO specialists are still combating the same major issue that has vexed them for decades: how to keep a steady stream of work flowing through hangars year-round.
“It’s probably the biggest problem you have at an MRO,” says Ron Utecht, who has five decades of MRO experience. “It’s also not noticed, but it’s a big problem for the airlines that do their own maintenance. When I started in this business . . . we were facing the same problem at United Airlines—how do we fill the summer with work?”
The first step at United and later Timco, where Utecht was chief operating officer and then CEO during an 11-year stint, was to look internally. Generating work to fill summer months—when many airlines want their aircraft flying to take advantage of a jump in demand—is often not feasible, so management focuses on staff size. Technicians are encouraged—and, in desperate times, even required—to take time off during the summer.
Third-party MRO providers use a high percentage of contractors to scale up and down as needed. Utecht says having 15-20% of a large airframe shop’s technical staff on contract is common. While such workers cost more per hour, they do not receive benefits and expect to be expendable. The result: The shop gets the right number of qualified workers to do what is needed without having to fret about full-time head count.
Another tactic that MRO providers use to fill summers productively: conduct required recurrent training.
In an independent MRO provider’s perfect world, the flow of work is steady enough that adjusting staff size or filling gaps with training classes is not necessary. The largest MRO providers mix a variety of customers and capabilities in search of finding that steady stream.
“Having a healthy mix of heavy checks, modifications, conversions, painting and other types of work can help balance out seasonality,” says Gabe Doleac, general manager of airframe service at Aviation Technical Services (ATS). “We also work as partners with a number of smaller aircraft operators, including private operators, who often have schedule flexibility.”
Cargo airlines, which see less seasonally adjusted demand in the summer, and carriers from parts of the world where Northern Hemisphere summer travel is not peak time, are ideal heavy maintenance customers. Business from charter carriers also is sought.
But there are only so many of these operators and most have small fleets. For providers like ATS, which counts Alaska Airlines and Southwest Airlines among its core customers, their bread-and-butter work will come from major airlines with sizable fleets. These operators will have one-off needs outside of their scheduled flows—and maintenance providers have to be ready.
“The vast majority of our work is for our regular maintenance customers,” Doleac points out. “These same customers also have drop-in requirements from time to time, and we work closely with them to be able to accommodate these needs.” Doleac says ATS can accommodate the occasional one-off drop-in, but most of the time, its regulars keep the hangars full.
Another option for keeping staff busy with a predictable flow of aircraft is military work. Haeco Americas, the former Timco, landed KC-10 heavy maintenance work in 2010 from logistics support contractor Northrop Grumman. The KC-10 work complemented C-130 MRO that the North Carolina-based provider has performed for more than 30 years.
Utecht, who was at Timco when the company won the KC-10 contract, says military deals are an effective way to book blocks of predictable work, but they come with sacrifices.
“You have to keep everything separate, and employees have to be qualified to work on the aircraft,” he explains. “You can’t mix parts, you can’t mix tooling. Military work creates an area of its own.”
While many airframe providers still scramble to match capacity and staffing with demand, Utecht says market forces have removed some flexibility from airlines. As carriers offloaded their in-house work, hangar capacity became more scarce, cutting down on the options that airlines have for scheduling maintenance visits. Where heavy checks once could easily be scheduled for off-peak flying times, slots are scarcer now, forcing work into the summer.
While this scenario may give airline planners headaches, MRO providers are understandably pleased—and carriers often end up saving money.
Steady lines of the same aircraft type inherently create more efficiency than a workflow that starts and stops, because operators are focused on keeping airliners flying during peak demand times. Utecht estimates that introducing a new aircraft type can create a learning curve that adds 25-40% in costs through lost productivity. This goes for completely different aircraft types as well as simply stopping a line for a few months and restarting it. Even if the same aircraft type comes back, odds are that the same team of workers will not be in place.
“There’s a significant period of re-learning the airplane,” Utecht notes. MRO providers know this and build in costs accordingly.
Newer-technology aircraft create a different twist on the relearning challenge. Design changes have boosted the amount of composites used in aircraft such as the Boeing 787 and Airbus A350. This, combined with other advances, has lengthened maintenance intervals and reduced man-hour requirements from those for older models.
Boeing figures a typical 767-300ER will undergo a D check every six years, that will require about 9,400 man-hours. A 787-8 is projected to go 12 years between D checks, and each heavy visit will need about 10,000 man-hours—or roughly half of the 767 requirement when calculated over each model’s expected service life. Extended intervals mean putting a steady stream of 787s and A350s through an airframe hangar will be a tall order.
“You’re going to forever be in a learning curve,” Utecht stresses. “You’re never going to get to do them nose to tail. How are [mechanics] ever going to learn the product?”
Extended heavy-check intervals are causing maintenance program changes across the board, moving more tasks into line maintenance and overnight checks. Longer-term projections underscore the shift.
Aviation Week’s 2016 Commercial Fleet & MRO Forecast shows airframe MROs’ share of the aftermarket pie shrinking to about 9% in 2025 from 10% in 2016, ceding market share to faster-growing segments, including line maintenance.
Fewer hangar visits for newer-technology aircraft presents another challenge for operators and MROs alike.
As airlines ramp up their efforts to differentiate their products, interiors work will take center stage. The increased pace of development in cabin amenities, combined with the drive to woo premium passengers, means high-end first- and business-class cabin products could see service lives as short as five years. Even if configurations are maintained, the anticipated high usage rates for long-range widebodies like the 787 means cabin refreshes will be needed every two years or so.
“Figuring out how to address the interiors of these airplanes [is] interesting to watch,” Utecht says. “Those interiors will become pretty distressed. Bringing an aircraft in and stripping out the cabin—it’s a 5-12-day visit to do something like that.”
Considering the prices for the newest aircraft, operators will look closely at weighing the benefits of upgrades against the costs of pulling such valuable assets out of service for non-mandatory work. MRO providers that can deliver efficient cabin services soon may find themselves with more work than they can handle.