Is A Change Underway In MRO?
November or December could be when the FAA and other regulators finalize what is needed for the Boeing 737 MAX to return to service. During the approximately 1.5 years it has been grounded, how much our industry and the world have changed.
“Remember when [the MAX] was one of the biggest problems that we had? It’s funny to think of how changes in priorities and initiatives come about,” said American Airlines President Robert Isom in his interview with me during Aviation Week Network’s virtual MRO TransAtlantic. The abridged version appears on page MRO8.
To help you navigate toward recovery, Inside MRO is launching a new one-page feature, Industry Tracker, to highlight key industry data that serve as waypoints in our journey out of the COVID-19 crisis.
While we’re still in the middle of our flight through the pandemic, several positive signs of smoother air on the horizon are emerging.
Isom shared that American has moved its 24 737 MAXs to its base in Tulsa, Oklahoma, so airworthiness directives can be completed quickly when it gets the green light.
Alaska Airlines has taken the time to clear deferrals, train technicians and move its Boeing and Airbus aircraft onto the same processes and systems, Constance von Muehlen, senior vice president for maintenance and engineering, told us during MRO TransAtlantic.
She and a few other MRO executives also hinted at the importance of working with suppliers. “Obviously, that work has slowed down, but we thought it important to continue the work so that our strategic partners continue with their skilled workforce and have them available as we ramp back up—which is really what we’re doing now all the way into next summer, where we plan to fly a large majority of our airplanes and have those return to service,” said von Muehlen.
As airlines plan for the ramp-up in service, this could lead to a surge in maintenance demand, which sounds like a welcome development, but would not be if the MRO industry is not spooled up and ready for it.
Take MRO Holdings, for instance, which has four facilities with 60-70 heavy maintenance lines. The MRO lost 80% of its planned work for the year, or 5 million work-hours, when the pandemic struck the Americas, so it ramped down to 15 lines to preserve cash.
To reach the right equilibrium of MRO capacity and cash reserves, airlines and MROs are going to have to work together over the next several months to match supply and demand.
“I think this is driving a lot more partnership conversations,” said MRO Holdings CEO Greg Colgan. “Because maintenance has this long [lead time] where you can’t just turn it on, I really anticipate even better relationships that look at long-term value, instead of shorter-term engagements.”
For MROs to seek longer-term contracts with airlines is not a new goal, but given this unprecedented environment, will multi-year deals stick?
“This is the perfect opportunity for longer-term agreements to be reached,” as people seek certainty, said Brendan McConnellogue, EasyJet director of engineering and maintenance, during MRO TransAtlantic.
If this turns out to be the silver lining of the pandemic, it would be ideal.