MROs Step Up Asia-Pacific Interests

 2017 has to date seen a flurry of Western MRO activity in the region.

Maintenance providers have continued to make moves in the Asia-Pacific market this year by forming new partnerships and signing up regional airline customers under long-term service contracts.

Never was this more evident than at last month’s Paris Air Show, which produced a plethora of agreements, as detailed by these pages, mainly centered on Singapore and Malaysia.

One of the region’s biggest players, Singapore Aircraft Engineering Company (SIAEC), was especially active--penning an engine joint venture with GE Aviation, focusing on repairs for the mature GE90 engine powering the Boeing 777 and the GE9X engine option for the 777X.

SIAEC has perhaps been the most prominent example of an Asia-Pacific company aligning with OEM and MRO partners, counting partnerships with Boeing and Airbus.

Malaysia, which has ambitions to compete with Singapore as Asia-Pacific’s dominant aerospace destination, signed a number of deals looking to enhance everything from building component maintenance sites to linking up with Airbus on technician training projects.
This year has also seen further activity in Indonesia. FL Technics of Lithuania, a company that has ramped up in capabilities and scale in the past five years, began offering heavy maintenance services in the country from January. Having been operating in Indonesia since 2014, the company has forged MRO partnerships with the likes of GMF AeroAsia.

Another country with an aviation sector tipped to boom is Vietnam, home to a population just shy of 92 million and seeing its industry benefiting from low labor costs, is also showing potential as a future regional player. In April, its largest aftermarket provider, MRO Vietnam Airlines Engineering Company (VAECO), received approval to conduct maintenance on European-registered aircraft.

Neighbouring Thailand, in the process of recertifying its airlines after its 2015 downgrade by the FAA, is also hoping to stimulate MRO growth through a number of incentives including granting new aftermarket companies eight-year tax holidays.

While projected spend for the market remains strong, with Aviation Week's Fleet and MRO Forecast calculating Asia-Pacific as a whole to amount to a $26.6 billion spend for this year alone.

Going against the overall industry grain of engine demand driving spend, the majority of this work in the region is expected to be in component maintenance (39%), followed by engine maintenance (26%) and line maintenance (20%).

Reference: http://www.mro-network.com/maintenance-repair-overhaul/mros-step-asia-pacific-interests

Shifting Landscape of Airlines and MRO

Challenges, Opportunities in Shifting Landscape of Airlines and MRO

The demand for aircraft Maintenance Repair and Overhaul is on the rise. Are Airlines and MRO companies ready? 

The Aircraft Maintenance Repair and Overhaul (MRO) business is poised for stunning growth in the near term, but the Airlines and MRO companies that provide those services must navigate a rocky and often-unpredictable landscape in order to thrive.

Rapid fleet growth and the rise of emerging markets, especially in Asia, where the aftermarket is fragmented and uncoordinated, will change the way aircraft operators make decisions about their MRO supply chains.

Meanwhile, MRO providers also must contend with new competitive forces and an increasingly demanding customer base. They need to be vigilant and ready for upcoming shifts in market forces. And they need to forge and nurture global partnerships with suppliers and logistics providers who know how to succeed in times of rapid, but unpredictable, international growth.

Boeing’s projects the world’s fleet will double over the next 20 years as 36,770 new planes take to the skies. Forty two percent of those will replace older ones, mainly in North America. But, in general, commercial planes are being retired at a modest rate now. The average age of aircraft at retirement has risen steadily over the last 40 years. This means the MRO market will be lucrative.

“Greater globalization brings with it inexperienced workforces, immature logistic networks and regulatory oversight challenges.”

For now, North America is the top region for MRO value, but Asia is on track to eclipse it, according to which provides consulting and technical services to the global aviation and aerospace industry. 

Turbulence ahead

Plane-makers and suppliers, meanwhile, are building more efficient, reliable and advanced commercial and military aircraft, engines and components. This new technology puts added pressure on MRO providers to be versatile and to cultivate new skills.

How all this shakes out is yet to be determined. But fleet growth will change the timing and type of maintenance required. Old ways of doing business are falling by the wayside, and supply chain performance will be under closer scrutiny.

The MRO environment is tense, and the competition is fierce. One reason is that original equipment manufacturers (OEMs) want to capture a bigger share of overhaul activity and preventive maintenance. In asserting more control, they’re leveraging their position with suppliers on parts and prices. This, in turn, pressures MRO providers on cost.

MRO providers must be agile and flexible as the type and timing of maintenance changes with newer planes with more durable parts, new designs, and more efficient engines and other characteristics come into play.

Capturing the opportunity

There are a lot of questions as the MRO ecosystem reshapes. But there are also opportunities.

The potential for growth is almost limitless. We know demand for MRO services is on the rise, and we know it’s coming from new regions. Airlines and MRO companies just have to be ready to adjust quickly to new demands.

It’s all about being prepared, being nimble and aligning yourself with partners who can get you where you need to be.