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Asia-Pacific Airline Capacity Cuts Boost MRO Demand

AirAsia aircraft inflight
Credit: Nuttapong Wannavijid/Alamy Stock Photo

KUALA LUMPUR—While Asia-Pacific MRO operators are being hit by higher costs due to the Middle East crisis, they are also likely to see a rise in demand as airlines advance some aircraft maintenance.

Most airlines are cutting capacity due to the surge in fuel prices, and in many cases, they are using the extra aircraft downtime to try to send more aircraft for heavy maintenance checks.

There has been growth in demand for MRO operators as airlines look for maintenance slots, said Mahesh Kumar, CEO of Asia Digital Engineering (ADE), during the Aviation Week MRO Southeast Asia conference May 13-14.

Airlines are typically not putting aircraft into storage as they did during the pandemic, Mahesh noted. Instead, they are taking advantage of the opportunity to send some aircraft in for checks slightly earlier than planned.

For example, ADE’s main customer, AirAsia, is trying to advance aircraft maintenance visits that were scheduled for the fourth quarter to the third quarter instead. In this way, the carrier can ensure it has as many aircraft as possible operating during the traditionally busier fourth quarter.

Batik Air Malaysia has previously said it is taking a similar approach.

Some airlines might choose to leverage the lower aircraft activity to perform maintenance, but others might still prefer to fully utilize their planned aircraft cycles before checks are due, said Rico Ugdoracion, MD of Philippines-based Dornier Technology.

He noted that many airlines are asking for greater flexibility in timing when they book maintenance slots.

The fuel price surge related to the Middle East conflict is just the latest in a string of crises that have affected the aviation industry, said Lars Moeslein, HAECO’s SVP for corporate sales for Asia-Pacific. The regularity of these crises means MRO providers must be as adaptive as possible, he said.

For example, when HAECO constructs a new maintenance hangar, it makes its design as flexible as possible to adjust to changing demand patterns, Moeslein said. Building partnerships with OEMs and customers is also important to adapt as early as possible when their plans shift, he said.

The most immediate problem arising from the Middle East conflict was logistics disruption, said Dobrica Djordjevic, chief production officer of FL Technics Indonesia. This compounded supply chain challenges that the industry was already facing, he said.

Ugdoracion noted that the Middle East conflict has caused a temporary slowdown in the number of Philippine aircraft maintenance workers leaving for jobs overseas. Mahesh said there has also been an uptick in the number of aircraft workers who are looking to return from the Middle East to Southeast Asian countries.

The disruption to Middle Eastern MRO operators has not had a significant effect on Asia-Pacific airlines, said Constantin Pouy, director of aviation, travel and tourism for ICF, during a separate panel discussion.

Pouy estimated that about 84% of Middle Eastern MRO capacity is devoted to Middle Eastern carriers. Just 9% of the remaining share is attributed to customers from Asia-Pacific. This translates to only about 20 airframes per year from Asia-Pacific airlines.

Adrian Schofield

Adrian is a senior air transport editor for Aviation Week, based in New Zealand. He covers commercial aviation in the Asia-Pacific region.