Top-Performing MROs Buck Trends, Invest In New Technologies

MRO industry showing solid growth and strong prospects, but is also facing technical and workforce challenges that have to be resolved.

Our biennial Top 10 MROs World Wide shows the biggest MROs plan to add capabilities focused on next-generation aircraft and engines—some through launching joint ventures. Many pointed out that they are investing in analytics to improve predictive maintenance and/or technologies to make operations more efficient.

To put this in perspective, Oliver Wyman’s new 2017 MRO survey of aftermarket industry executives found “the promise of advanced analytics and game-changing technologies remains elusive,” with 62% saying legacy information technology (IT) systems hinder progress in this area. Oliver Wyman principal Brian Prentice says “that for all of the conversation I heard about technology and big data, there’s still a reluctance” about adopting it—partly because today’s fleet includes a lot of older-generation aircraft.

IT investment and next-gen capabilities logically go hand in hand, right? They should. But ironically, the systems investment might be more driven by the needs of younger technicians. Prentice says, “New mechanics are used to interactive, not green, screens.”

This younger generation could drive change, but there simply are not enough of them yet (see our workforce story). Boeing forecasts the industry will need 679,000 new maintenance technicians over the next 20 years.

Add the workforce shortage to the 20,244 new aircraft that Oliver Wyman expects to be delivered over the next decade. Couple all of that with obsolete IT systems that will have a hard time supporting the new aircraft—let alone support big data analytics—and you’ve got a problem.

As Prentice says, “The aging of the mechanic workforce and rash of anticipated retirements could not come at a worse time for the industry, as it gears up to accommodate the larger and newer fleet.”

This convergence of issues could result in direct operational problems that will be painful for MRO providers and airlines. “Given the looming labor shortage and failure to upgrade technology,” states the Oliver Wyman survey, it sees “a prospect for rising maintenance costs and an increase in turnaround times for scheduled maintenance.”

Our Top 10 Airframe MROs are all growing, and Lufthansa Technik, which earns the most revenue, just announced its big Aviatar digitization initiative at Aviation Week Network’s MRO Americas. Those investing in smart analytics and efficiencies could be even bigger winners in 10 years if other MROs lag in these technical advancements.

Opportunities abound, but make sure you’re looking at all of the variables. 

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