American Top U. S. MRO Spender, Still Outsources Smallest Share.jpg

American Top U. S. MRO Spender, Still Outsources Smallest Share

Figures paint a mixed picture of changes and stability in the U.S. aftermarket.

The latest FAA Form 41 figures on maintenance outsourcing by U. S. airlines show some things have changed and some things remain remarkably stable.

Among the stable trends, the three U.S. major network carriers, American Airlines, United and Delta, in total outsourced the same portion of their maintenance, 44%, in 2016 as did their predecessor airlines in 2006, a decade before.

But there were some interesting changes within this group. American Airlines spent the most on maintenance, $3.5 billion in 2016, and outsourced the smallest portion, 38%. That share was up from the 33% spent in 2016 by American and US Airways, which already included America West. American’s scale enables it to do many kinds of maintenance efficiently in-house. But the carrier is apparently looking a bit more closely at the outsource option.

Delta, on the other hand, decreased its outsourcing, from 57% by Delta and Northwest in 2006 to 43% by the combined carriers in 2016.

United and Continental, which were already outsourcing a substantial 46% of maintenance a decade ago, pushed that share up to 51% in 2016 after their merger.

The Three top low-cost carriers taken as a group outsourced 57% of maintenance in 2016, up only slightly from 56% in 2006. That share is higher than the equivalent share of network MRO spend, but not as dramatically higher as it once was.

Southwest was the biggest MRO spender, at $1.7 billion in 2016. But Southwest’s outsource share declined from 58% in 2006, including AirTran, to 52% in 2016. That is almost exactly the same as the outsource share for United. With all its engineering, line work and in-house C checks, Southwest does a good portion of MRO inside. And major LCCs and leaner network carriers have been converging in several ways over the past decade.

Jetblue, in contrast, increased its outsource share from 44% to 74% over the decade. Frontier trimmed its outsource spend from 55% of maintenance in 2006 to 51% in 2016.

These figures may be affected by shifts in fleet, aircraft maintenance cycles and reporting conventions. But they demonstrate there are no simple rules that determine outsourcing choices, for either majors or LCCs. Carriers are continually hunting for the best combination of cost, quality and turnaround time, inside and outside their own hangars.

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