Skills shortages and outdated technologies are among the primary concerns for the commercial aviation aftermarket during an era of fleet expansion and modernization, according to Oliver Wyman’s 2017 MRO survey.
The survey draws on the views of nearly 100 respondents from the MRO industry, with 63% VP level or more senior and 85% director or above, and highlights the concerns of maintenance companies.
According to Oliver Wyman’s annual Fleet and MRO Forecast, also published this week, global carriers are anticipated to add 20,444 aircraft, 17,390 of which are considered as encompassing new technology while an estimated 10,311 mature jets are expected to be retired. This will be driven by emerging aviation powers such as China and India. The MRO market is also set to hit new heights over the next decade, with both the Oliver Wyman and ICF International forecasts expecting it to surpass the $100 billion mark over the next decade.
While the figures portray a growth industry, two of the key components of the future – people and technologies – are causing concern among industry players.
In the U.S., among the world’s most mature MRO countries, the labor issue appears especially critical. With an average technician workforce age of around 51 years old, some nine years more than the U.S. national average, a more mature demographic has long been a reality.
However, the labour problem is predicted to reach an impasse in the next 5-7 years, number of maintenance retiring technicians equalling the numbers of new younger talent entering the industry. At the top of the decade, retirees will outpace the total of younger mechanics. By 2027, it is predicted around 91,000 technicians will be needed in the U.S., but supply will be at 83,000.
Competing with other sectors such as automotive and oil & gas, the reality is that it is becoming increasingly difficult for aviation companies to attract new talent, Oliver Wyman principal Brian Prentice told MRO Network. 78% of this year’s survey respondents said it is becoming tougher to do just that, and the squeeze in the labor market is pushing them to rely on other stop-gap solutions such as overtime.
One way this could be resolved to an extent is by rising wages to attract new talent, Oliver Wyman/CAVOK’s Dave Marcontell said at MRO Americas on April 25. However, the result of this shortfall could be a harmful knowledge gap. In 2027, it is predicted that the ratio of older and newer generation aircraft in the global fleets will be close to 50-50.
MROs also aren’t anticipating this to become any easier. 72% of those surveyed expect the search for qualified candidates to get much harder in the coming decade.
Equally as pressing is technology centered on both the fleet and the IT infrastructures of MROs. Many IT infrastructures (62%) are still having a pejorative impact on aftermarket businesses. The nirvana of new technological innovations driving efficiencies and cost reductions also appears some way off. Just 20% of those surveyed said new technologies and data analytics are having a material impact on business.
The combined skills-technology conundrum could have a long-term result in increased maintenance costs and turnaround times on scheduled work. This scenario, according to Oliver Wyman, could result in airlines choosing to retain more spare aircraft as a backup for potential servicing delays.
But with technologies evolving, an interesting perspective was presented in the way in which demands for the next-generation airline technician will change. These include composite material repair and manufacture (62%); collection and reporting of data for advanced analytics, big data, and predictive maintenance (51%); and having competencies in the newest avionics and electrical systems (51%).
While technologically challenged, it appears the industry is prepared to meet this head on in the near future with upgrades planned over the next three years.
68% of respondents are planning a migration or major upgrade in their systems for engineering in the next three years, followed by supply chain (55%), and engine maintenance, technical support, and planning (50%).