Global spending in the maintenance, repair and overhaul (MRO) market is expected to reach $94 billion this year, just shy of the previous record of $95 billion achieved in 2019. The MRO market will then steadily grow by around 2.9 percent per year over the course of the next decade.
The numbers come from the recently-released Global Fleet and MRO Market Forecast from Oliver Wyman. But even though the report predicts a “steady recovery” from the sector’s COVID-19 downturn, the lingering effects of the pandemic are likely to be felt throughout 2023 and beyond.
Among those hard-to-shake symptoms is a backlog of deferred maintenance that is now coming due. Many maintenance projects that were delayed for financial reasons now need to be carried out. These can range from minor issues like cosmetic repairs, smaller component replacements, or non-essential equipment upgrades to pricey and complex tasks like engine overhauls.
Whatever the task, this deferred maintenance is now coming due at a time when the MRO sector is already hampered by labour shortages and supply chain woes. The need to play catch-up while also maintaining regular maintenance schedules presents a significant challenge for airlines and MROs and may force some tough business decisions.
According to Satair Market Product Manager Andreas Dik, there are various ways to approach the deferred maintenance issue. Airlines whose own in-house MROs are overwhelmed can consider subcontracting some tasks to an external MRO, but those too are facing the same labour and supply chain problems and may not have much more capacity.
Airlines can also try to lighten their MRO’s workload by being proactive with parked aircraft before they’re actually needed.
"There are different levels of aircraft parking and storage and all of these 'levels' require a certain number of manhours in order to bring it back into operations,” Dik told the Knowledge Hub. “If an aircraft won’t be needed for a long time, it will most likely be placed in storage. But if it might be needed on short notice, the airline may choose to put the aircraft in parking mode, so that when it is needed it can much more easily and quickly be brought back into operations than if it was in storage."
Another way is to have spare engines – or even spare aircraft, if possible – that can be ready to go should an unexpected problem arise.
“If, for example, an airline has an aircraft that is scheduled to fly but suddenly has an error that keeps it on the ground, they could bring in spare aircraft if they have one,” he said. “Or if there is an engine failure, having a ready-to-go spare would allow the airline to get back in the air in a matter of days. These sorts of daily strategic decisions can help mitigate some of the operational and supply chain issues the sector is dealing with.”
Whether an airline has the luxury of having spare aircraft or engines on hand or not, many airlines are looking to used serviceable materials (USM) as a way to circumvent long lead times.
“After two rough years, the airlines would really like to come back and be profitable. And one way to do that is to use USM, which also helps to reduce the lead time of their MRO activities or maintenance projects,” Dik said.
While USM can help reduce lead times, Dik said that airlines still have to use “common sense” when considering the balance between a shorter delivery time and a potentially limited part life.
“Let's say an airline has sent an engine for overhaul and the MRO comes back and says that they’ll have to wait 70 days for a part because of production pressure,” he said. “What do you do? You probably don't want to wait 70 additional days for just this one part, so one way is to source the market and try to find a broker or a teardown company that has the part either ready to go or just needing a small inspection before it can be installed. But if it's a life-limited part, you have to really decide whether or not you want it used. If you install all the other parts as new, except one that has, say, only 5,000 flight cycles remaining, that part is going to be the limiting factor for the next maintenance activity.”
As the above example illustrates, aircraft maintenance is complex even at the best of times. With two-plus years of deferred maintenance coming due at the same time as a mechanic shortage and a snarled supply chain, there is a risk that the industry will have a hard time playing catch-up. But catch up it must.
Maintenance tasks cannot be put off indefinitely and, depending on the specific issue, deferred maintenance could lead to equipment failures and malfunctions, posing a risk to the safety of passengers and crew. Waiting too long can also increase costs in the long run, as any equipment failures are likely to require more extensive repairs than the original problem.
Because aviation is so heavily regulated, airlines also risk legal implications and fines. The various regulatory bodies have procedures and regulations for ensuring that airlines comply with required maintenance tasks and have the power to impose fines or other penalties on airlines that fail to comply. In statements to the Satair Knowledge Hub, both the US Federal Aviation Administration and the European Union Aviation Safety Agency said they had no plans to relax regulations in light of the maintenance backlog.
Despite the constraints the industry faces, Dik is cautiously optimistic that the system will hold.
“From what I understand, we have not had any major issues with the deferred maintenance yet. There are a lot of issues with delivering parts – that’s not a big surprise to anyone – but I actually would have expected things to be worse,” he said.