Adding next-generation aircraft capabilities and seeking new information technology (IT) systems to improve efficiency are two common activities MROs in Eastern Europe and Russia are undertaking as the region, like many others, deals with an aging workforce and new aircraft types.
One example is Aeroplex of Central Europe, which aims to add Boeing 777 base maintenance capability by September 2017, Arpad Demeny, managing director, told Inside MRO on the sidelines of Aviation Week Network’s MRO Baltics, Eastern Europe and Russia conference in May. “I’m working on a long-term contract for widebodies,” said Demeny. If the Budapest-based MRO wins the contract, it could build a widebody hangar that might be ready in three years. That one-bay hangar would supplement its two hangars that include six bays.
Aeroplex also is soliciting quotes for new IT systems to target key performance-indicator advances, he says.
Mirjana Tratnjek-Ceh, deputy CEO of Adria Airways Tehnika, is also advocating new IT for efficiencies. “Especially when we do complete packages, we need to give customers full data that can transfer into their systems. No question we need to adopt this,” she says.
Adria Tehnika’s expanding modification work includes its recent installation of Inmarsat’s Global Xpress connectivity system, in conjunction with a combined regular aircraft check, on 16 Germanwings/Eurowings aircraft.
Magnetic MRO in Estonia “puts a lot of emphasis on innovation” and is capitalizing on the vibrant startup environment (there are 400 startups in Estonia) that surrounds it, says CEO Risto Maeots. The MRO provider, which uses 3D printing for interior cabin parts to support base maintenance activities and generate revenue, also “developed a 3D visioning tool to show customers interior designs virtually,” says Maeots. “In 2013, we started looking at what else we could do besides sell labor,” and Magnetic is now “looking for a hungry software provider that we can partner with . . . to help prepare for new things coming,” he says.
Adding new digital tools is fitting for a region that seems to be on the verge of transition as it considers adding next-gen capabilities and expanding beyond airframe-related work, as well.
Boris Ryback, director of Infomost Consulting, believes there is aftermarket undercapacity in Russia and says 97% of engine MRO, 70% of component maintenance and 100% of widebody overhauls are done outside the country.
Igor Panshin, deputy CEO for sales and planning at Engineering Holding, agrees there is room for MRO expansion in Russia because about half of the market goes to MROs elsewhere. But he cautions that seasonality and other factors need to be considered because simply adding hangars to keep work in-country is not efficient. Engineering Holding is the parent company of two Russian MROs, S7 Engineering and Sibir Technics.
In line with its global MRO forecast, Oliver Wyman predicts that next-generation aircraft in Eastern Europe will comprise more than half of the region’s fleet in 2027—52%, up from 11% today, says Robbie Bourke, a principal with Cavok, a division of Oliver Wyman. This means MROs will need to ramp up—from training to tooling.
Panshin thinks many MROs from Eastern Europe and Russia are not on track to deliver aftermarket support capabilities for the next generation of aircraft such as the Airbus A350 or Boeing 787. “The OEMs are delivering the product, so MROs need to be more prepared for the future,” says Panshin, “or else we’ll have a technology gap.”
Bourke encourages MROs and suppliers in Eastern Euopre and Russia to “be thinking outside of the region,” such as looking to Asia-Pacific, where the fleet will nearly double over the period. “Developing mature value propositions for non-Eastern European operators will be a key to attracting additional business,” he says, suggesting that MRO providers in this region consider “tapping into some of the $456 million MRO market that is carried out in Asia-Pacific and in China.”
Oliver Wyman’s data forecasts little growth in Eastern Europe, with the fleet growing only to 1,130 in 2027, from 1,144 aircraft this year. “This $3.5 billion market today will only grow 0.6% per year, to $3.7 billion by 2027,” says Bourke, who adds that airframe MRO in the region will basically be stagnant because higher engine costs are driving that modest growth forecast.