Demand for MRO remains strong, and demand for outsourced MRO is growing stronger as low-cost carriers grow faster than major airlines and even many majors are looking for outsourced options to stay competitive.
OEMs increasingly seek to serve this outsourced MRO market. But James Elliott, director of aerospace and defense MRO business for the software giant IFS, thinks independent MRO shops have some advantages in competing for outsourced maintenance.
Uniquely, OEMs determine and can change the maintenance programs for their aircraft, Elliott acknowledges. “They determine when work must be done… OEMs can gather enough reliability data to change maintenance plans, removing the need for unnecessary maintenance work.”
However, “OEMs don’t have the same track record of working for leading international airlines as independent MROs,” the IFS exec argues. OEMs trying to break into new contracts have had trouble getting maintenance information from airlines. “They must prove they can repair and maintain aircraft cost-effectively throughout their entire lifecycle.”
Fortunately, independent MROs have a wealth of experience on what happens after aircraft leave factories as well as experience in repairing them. “The larger MROs are can go head-to-head with the OEMs as they have the labor pool, capabilities and information to do so,” Elliott argues.
Ellliott believes MROs can win business by differentiating themselves from both OEMs and other MROs in three different ways.
First, by diversifying services. “OEMs want to be the one-stop shop for all maintenance work, but MROs are much better at catering to the changing needs of airlines.” MROs are much more flexible than OEMs and can expand and diversify capabilities to take on the work airlines actually want to outsource, such as fleet management, line planning and adapting to new aircraft, he thinks.
Another example: the new composite aircraft mean heavy and line maintenance work isn’t happening as often as in the past. So MROs can offer management and planning, while remaining focused on smaller checks and repair jobs.
Next, by offering anywhere, anytime maintenance and support. “Efficiency is key to maintaining customer relationships,” Elliott stresses. “Airline expectations increase each year for quicker aircraft repair and better cost control.” He believes improving maintenance with new technologies will counter competition from OEMs.
Elliott points to HAECO as an example of high-tech tools supporting remote repairs. Some OEMs and MROs have aircraft-on-ground teams to help stranded aircraft. HAECO’s mobile capabilities go well beyond that. At HAECO, “a remote team can work on complex composite materials used on new and advanced aircraft regardless of location. If an airline has a damaged aircraft stuck in a remote location, HAECO can take a maintenance team with the capability to repair that aircraft out in the field.” The MRO’s mechanics can access electronic task cards, receive their job assignments, create non-routine task cards and sign task cards, all electronically and through mobile devices. “This ties mobile expectations and maintenance together, with a team that can work anywhere, anytime.”
The third differentiator is offering choice, full or part service, and better pricing. Airlines trust OEM products, but OEM pricing has not always benefitted airlines. “Many airlines don’t want to be locked into expensive full-service contracts,” Elliott says. OEMs usually offer overall maintenance packages rather than smaller repair jobs. The OEM packages might include heavy maintenance, line maintenance and supply chain management. But, “airlines are wary of what the full lifecycle costs will be.” MROs in contrast have proven they can return an aircraft back to service quickly and safely at minimum expense.
Elliott expects OEMs to continue offering one-stop maintenance models, but meet stiff competition from independent MROs ramping up their offerings. Long-term, OEMs may acquire or joint venture with MROs, and MROs could form their own groups to fend off OEM ambitions. “But M&A activity will not be enough. Building new capabilities, capacities and partnerships will be key in keeping up with the pace of change.”