Aviation Week asked these aftermarket leaders in Asia-Pacific to share their insights on the business of MRO in the region—in advance of MRO Asia in Singapore.
President and CEO • GMF AeroAsia
Chairman • Indonesia Aircraft Maintenance Services Association (IAMSA)
The Asia-Pacific MRO sector is geared to achieve maximum growth targets as more aircraft operators outsource their MRO requirements. The Indonesian MRO sector is ripe to benefit from such shifts within the region, as the country enjoys one of the lowest labor costs, along with increased investment in technology and infrastructure. The major challenges for industry stakeholders will be ensuring that we grow at a controlled and sustainable pace, achieving value-added solutions and faster turnaround times.
Indonesian carriers will spend $915 million on MRO work this year. This figure is expected to more than double to $2 billion by 2023. Indonesian MRO companies now absorb less than 30% of the country’s maintenance work, with 70% outsourced to other companies in the region. IAMSA and the government plan to double MRO capabilities over the next five years to absorb up to 60% of local aircraft maintenance work. To do this, an additional 2,000 technicians and engineers will be needed, as well as an aerospace park.
One of the most important issues facing Indonesia’s MRO industry is the upcoming shortage of MRO specialists, which will affect the development of aviation here. Securing the necessary skilled human resources—a problem the entire industry should address in concert—is imperative.
I look forward to the continued strong alliance between the Indonesian government and the aviation industry. Jointly we can further develop our MRO industry to new heights of productivity, grow our skilled workforce, and gain international recognition as a major MRO hub.
Senior Vice President • Japan Air Commuter
The Asian aviation aftermarket is still growing, and there are many MROs across the region. This means airlines have lots of suitable MRO candidates from which to choose. But they also need to determine what
maintenance should be conducted in-house and what to outsource, based on their business model.
Meanwhile, passenger expectations for on-time aircraft performance increase steadily. In Japan, every high-speed “Shinkansen” bullet train operates within 15 seconds of schedule. Aircraft operations are also expected to perform at the same level, and delays cause a financial burden.
To maintain reliable airline operations, suitable levels of spare parts are necessary. The Asian region has a geographical disadvantage, as it is relatively distant from OEMs. Some areas have OEM warehouses, but their stocks are generally limited and are not quite adequate. Asian airlines have to make their own logistics arrangements for spares in these circumstances.
Choosing the optimal MRO and making appropriate logistics decisions are critical factors for Asian operators.
Head of Engineering • Tiger Air
MRO providers perform specific maintenance work, which is usually labor-intensive. To reduce costs, airlines often outsourced heavy manpower requirements to lower labor-cost countries. However, outsourcing is beginning to move up the skill ladder. It no longer involves just heavy maintenance work, but the entire spectrum of engineering and maintenance tasks. The emergence of smaller low-cost carriers (LCC) is one trend driving such outsourcing.
Tomorrow’s MRO providers will be faced with having to offer new value-added services. Airlines will ask, what else can you do for us? Some MROs are already providing services such as engineering repair in conjunction with maintenance. There are other services that MROs can perform to add value. For example, warranty administration—helping airlines to make warranty claims—would be little additional work, but would be a good value, especially for small LCCs. Offering some level of rotable repair management would also make sense. The MROs receive the airlines’ LRUs and return the unserviceable ones—so why not do limited repair management and hold units for future aircraft coming in? Long-term maintenance planning services could be another opportunity.
Increasingly, MROs are being asked to move up the skills ladder. Line maintenance services, although not really a skill-level increase compared with heavy maintenance, can be paired with services that require higher skill levels. For example, maintenance control, defect analysis, planning and the full spectrum of fleet technical management services. Add value and you become valuable, too.
A version of this article appears in the November 3/10 issue of Aviation Week & Space Technology.