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NEWS


“The international competitiveness of the Chinese airframe maintenance industry ultimately rests upon the modest pay rates and high labor effi ciency. However, the local salaries have been rising by about 10% a year for quite some time now, and the situation in the market is changing respectively. Such dynamics will defi nitely become a major factor as concerns the developments within the MRO market in 2014 and the years to come,” shares Kestutis Volungevicius, the head of FL Technics Training. Some signs of the aforementioned demand shifts are


already noticeable. For instance, while the MRO needs of the North American fl eet are expected to remain fl at, forecasters emphasize that the rising labor costs in such markets as China are changing the contract maintenance equation, tilting the results more favorably towards keeping the airframe MRO work closer to home. What used to be enjoyable 30% savings per check have dried up. As a result, in a recent survey conducted by Oliver Wyman consultancy agency, 60% of airline representatives said that they were willing to absorb up to a 5% cost defi cit relative to overseas alternatives to select a domestic provider, while 20% indicated willingness to accept up to a 15% defi cit. The changes in labor rates are expected to infl uence the competitiveness of MRO providers in China not only with regard to North American clients, but also in the context of the entire Asia-Pacifi c. There are reasons to believe that new MRO capabilities of such countries as Indonesia, the


Philippines, Malaysia and others will allow these new players to attract new clients and gain larger market shares due to lower salaries. “The unavoidable implication of the current situation is that one day the Chinese industry will simply become uncompetitive. Lion Air in Indonesia, where the average income is much lower, is already setting up a large maintenance base in Batam, an island near Singapore. Vietnam is yet another well-positioned country which has the potential to rank among the largest players in Southeast Asia. No doubt both of these countries, as well as other newcomers, will have a lot to learn. For instance, achieving adequate labor effi ciency and service quality will be a major challenge, putting additional pressure on the training providers. Same as it was in China relatively not such a long time ago,” concludes the head of FL Technics Training. For more information, visit www.fl technicstraining.com.


LUFTHANSA TECHNIK OFFERS NEW CABIN PRODUCTS FOR VIP CUSTOMERS


The VIP & Executive Jet Solutions Division at Lufthansa Technik AG if off ering two innovative new products for VIP aircraft cabins: the “Aircraft Steam Generator System” (steam shower) and the “On Board Oxygen Generation System” (therapeutic oxygen supply) signifi cantly enhance comfort and wellbeing on board VIP aircraft.


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