Source: Oliver Wyman. Last year, the two biggest aircraft manufacturers, Airbus and Boeing, indicated they expect to exponentially increase their MRO business over the next several years. Clearly, the aftermarket—another name for the MRO sector referring to dollars spent on maintaining an aircraft after its initial purchase price—was never going to be the same.
Most respondents in also indicated that those original equipment manufacturers OEMs would do that by leveraging control of existing IP and licensing to boost market share. While there has been some competitive price-cutting on specific parts, the move by OEMs into the aftermarket is expected to push up prices over the long run, as fewer rivals remain standing and competition is reduced.
Already, some carriers are reporting that the growing reduction of competition in the aftermarket is resulting in higher prices It was also the risk of rising prices and reduced leverage in negotiations that prompted some airlines to rethink their former outsourcing strategy on MRO. The second big threat that airlines see ahead—which is also the opportunity that makes MRO so attractive—relates to how fast aviation is expanding and expectations for growth of the aftermarket itself.
With it, there will be a concomitant increase in aftermarket spend, up The problem is whether the industry has the capacity to accommodate the growth.
Based on Oliver Wyman calculations, the shortfall will expand to more than nine percent in , just as the fleet is also reaching its peak size. There is also a potential shortage in airframe and engine MRO capacity.
To avoid being affected by these shortages, airlines reckon it may be best to have a sufficiently big in-house crew and facilities to handle a chunk of their own internal needs. The pressure may be the greatest in Asia, where the growth will be the biggest because of the burgeoning middle classes in places like China and India.
They already have a track record as service suppliers to other carriers. Here, the shortage of supply—both capacity and labor—and the rising demand are encouraging the parent airline to grow that side of the business. And post-crisis, Ojala would like to see better contingency planning for things going wrong. But the Finnair exec does not see any big long-term changes in his in-house work versus outsourcing.
His focus is on replacing Boeing NGs with MAXs, of which the carrier has just ordered more, plus options, and may operate by American Airlines has traditionally outsourced the smallest share of maintenance in the U. Major MROs are more bullish about outsourcing. In the Americas, more base maintenance has been outsourced. In Europe, the Middle East and Africa, more base, line and component maintenance has been outsourced. Roepke says it is too early in the virus crisis to see significant outsourcing effects.
The greatest potential for more outsourcing lies in full-service airlines, simply because they still do more inhouse. Tan Eng Shu, head of MRO at ST Engineering, is seeing more work from his existing outsource customers as travel picks up, but no trend yet toward outsourcing by more airlines. So short-term, outsourcing will not increase, but long-term the outlook is brighter. Tan also sees carriers moving maintenance work closer to their home bases to reduce ferrying costs. You need a capable and willing supplier, and there are huge people consequences, assuming union work rules allow it.
What are the pros and cons of airline maintenance outsourcing jobs? Are you wondering if you should look for an outsourced job in airline maintenance? Keep reading to find out more. The number one concern that comes to mind in relation to airline maintenance outsourcing jobs is safety.
How safe can it be when the people with the outsourced jobs aren't required to hold licenses? In some situations, the employees are not required to have the same licensing that United States maintenance workers are.
Only the supervisors have to be licensed. Airlines, of course, will tell you that the safety of passengers on the planes is not being compromised. Some airlines are reconsidering the outsourcing to other countries idea, as the article in the Dallas News indicates.
The biggest pro of outsourcing to other countries is the drop in cost for the airlines. Airline workers in other locations can make as little as one-third of the salaries earned by on-site mechanics in the U. The biggest con of outsourcing to other countries is apparent. If maintenance work is performed by less skilled workers, the safety of the planes could be compromised. Not all airlines outsource to countries outside of the United States. Some companies use outsourced labor, but hire contractors to handle the work in the home country.
They are able to staff up during busy times without having to pay benefits or face potential unemployment claims. They don't get the perk of inexpensive labor enjoyed by those who outsource oversease. Whether you live in the United States or another country, outsourced airline maintenance jobs are a possibility. Some of the airlines that outsource their maintenance jobs inlcude:. They prefer to keep the more complicated tasks to their skilled workers on-site.
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