offset declines in this area by offering MRO services doesn’t make sense for OEMs, he says, because “they now have to invest more into maintenance capabilities and skills training.” This is why OEMs are wiser to work with MROs as partners, rather than taking them on as competitors.
Alliances can even be made among MROs and non-aerospace enterprises, to both parties’ mutual benefit. This is how Turkish Technic is addressing its need for more technicians. “A training program has been initiated with the aviation high schools and universities to respond to the increasing demand in the skilled manpower shortage,” says Kararti. “Furthermore, to keep our existing manpower, a new management concept has been established in the human resources department.” As a global company, ST Aerospace taps “on the local market of the countries in which we operate for skilled personnel,” says Chang Cheow Teck. “We also invest a lot of effort and resources in training new staff as well as upgrading existing staff. We have trainees in the different parts of the world in which we operate – Singapore, China, the U. S. and Panama.”
Looking Ahead
The Giants of MRO have held their own in 2011’s stormy economic seas. So what are they facing in 2012?
In general, industry experts are
forecasting growth for the industry. “We’ve seen revenues improving as customers run out of inventory they can comfortably ‘destock’ and they become less able to defer repairs,” says Hal Chrisman, VP of the aviation consulting firm ICF International. “Surplus material from the many retirements we have been
seeing has delayed the recovery, but the revenue gains we are now seeing suggest that impact is lessening. Growth will depend on where you are in the world; low single digits in North America, or as high as 12 percent in parts of Asia during the year to come.” LTH’s Heerdt agrees with Chrisman’s
predictions. “The MRO market will further expand, mainly driven by the markets in the Middle East, Africa, Asia and Latin America, he says. “Traditional markets in Europe and North America will grow under-proportional in the coming years.” Even in this climate, opportunities exist for enterprising MROs. “We definitely see a continuing trend with airlines outsourcing their maintenance and at the same time seeking higher-value, bundled services,” says AAR’s Kleiman. “Consolidation across the industry supports this trend as airlines look for more competitive and diversified services. Those with total- support packages consisting of bundled solutions, high quality and competitive service offerings will be the ones in the best position to succeed and capitalize on the consolidation.”
“Business opportunities will continue to blossom,” agrees AFI KLM E&M’s Weber, but only “if the airline community tackles the OEMs’ threat adequately.” He worries that the push by OPMs into the MRO space will depress prices; driving weaker MROs out of business.
“If OEMs succeed in lowering competition by reducing the alternate MRO offer, then the airline community would suffer and be solely dependant on a few suppliers,” Weber warns. “AFI KLM E&M definitely wants to be part of this battle ... We know the challenges and are certainly willing to overcome them.” It is this kind of ‘Can Do’ attitude that drives the Giants of MRO today,
OEM/OAMs will continue to exert
pressure in order to have a larger share of the aftermarket business however, existing independent and airline MROs are still strong enough to counter them and ensure that competition takes place, key to ensuring competitive prices for the end user.
Nevertheless we also need to be attentive to the ever-growing number of cash-strapped airlines. We need to be able to offer competitive prices accompanied by a capacity to respond to business needs and accompany airlines in their development. We also need to be attentive to the life-cycle of airlines and their financial evolution. Nowadays airlines can as easily be created, given the leasing options which exist, as they can go bankrupt.
How is Sabena techics responding to these challenges?
AM
Bernardini: By being attentive to needs and setting up tailor-made solutions. Developing value-added packages, which are adapted according to an airline’s specific needs. Airlines are more and more looking for global solutions so they can concentrate on their core business. This solution is more and more being adopted by governments through MCO (maintaining in operational condition) packages. This is where an MRO with a wide range of services has a role to play. [Another way we are responding is] to generalize, throughout all processes, lean methods to improve efficiency and productivity. We are expanding geographically to offer customers proximity. And we are expanding our service offerings to new aircraft types and technologies.
and will keep them at the forefront of competition in 2012 and beyond. So don’t be surprised to see many of these MROs not just survive but thrive in the months and years ahead. These are companies with the tenacity and innovation to keep going no matter how tough times
get.AM
Aviation Maintenance |
avm-mag.com | December 2011 / January 2012 23
SPECIAL REPORT
Turkish Technics
Turkish Technics
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