2018, the Year of the…
Happy New Year to those following the Gregorian calendar, which marks Jan. 1 as the start of the new year. The Chinese New Year, based on lunar movements, starts Feb. 16 and marks the Year of the Dog.
Regardless of which calendar, 2018 looks to be auspicious. Here are a few of the predictions:
- The International Air Transportation Association forecasts that airlines as a whole will generate more profit than their cost of capital, despite rising costs. If this happens, it will be the fourth consecutive year of such profits.
- E-commerce is expected to continue fueling the growth momentum for the air cargo business.
- Aviation Week Network’s 2018 Commercial Aviation Fleet & MRO Forecast predicts civil aftermarket demand will be worth $88.3 billion this year.
This rosy outlook, along with low fuel prices, are keeping mature aircraft flying—thus driving a very healthy demand for engines and mid-life airframes—while more than 2,000 aircraft will enter service this year. This also buoys avionics upgrades—to meet the FAA and European Aviation Safety Agency automatic dependent surveillance-broadcast “Out” 2020 deadlines, as well as to gain operational efficiencies and eliminate obsolescence issues in mature cockpits.
There are opportunities aplenty. Here are a few possibilities:
- Instead of identifying 2018 as the Year of the Dog, Avianor CEO Earl Diamond calls 2018 “the Year of the 777” due to a surge in widebodies coming off lease and needing new interiors and liveries, as you’ll see in the interiors article.
- It could also be argued that 2018 may be the start of 787 MRO. Boeing Shanghai Aviation Services and Aeromexico completed their first Boeing 787-8 base maintenance checks in the second half of 2017—some of the first to reach this milestone. Others will achieve it in 2018. Ken Herbert, Canaccord Genuity managing director and aerospace and defense analyst, expects the early 787s to start rolling into hangars this year in need of first- and business-class cabin upgrades.
- On the cargo front, Sean Broderick writes, “The market trends are priming the pump for conversions, and suppliers are positioning themselves for the uptick. In the narrowbody space, all eyes are on the 737NG and A320 families.”
- Could 2018 be the year when Asian airworthiness authorities seriously consider the formation of an Asian Joint Airworthiness Authority?
- Will we see more airlines bring MRO work in-house this year? In late 2017, American Airlines announced it will overhaul CFM56-5Bs in-house in 2018 after its contract with GE expires.
- This next one is a sure thing: 2018 will be the year of partnership creation as the industry further aligns vertically. Expect the large OEMs to make more investments along these lines, too.
What do you think? What are your MRO predictions for 2018?
For me personally, 2018 will definitely be the Year of the Dog, given that my rescue puppy (in the graphic) continues to require a lot of energy.