Fast 5: How The Regional Aircraft MRO Market Is Faring
Wolfgang Henle, managing director of Austrian Technik Bratislava, talks to James Pozzi about the robustness of the regional aircraft aftermarket and why it is looking at augmented reality to aid shop efficiencies.
What is the state of the regional aircraft market and how is it impacting maintenance demand in that segment?
We haven't had a big upturn mainly because there wasn't much of a downtown. Regional aircraft tended to be the most flown during the crisis because they had the least capacity, so our customers tended to fly them even more than before. We (Austrian Technik Bratislava) made a profit in 2020 and 2021 without any state help, so that means we didn't lose momentum. The Embraer E-Jet (E170 and E190) and Airbus A220 markets have been particularly strong in recent times. The A220 is rising a lot in terms of demand because the first C2 checks, which is the first real heavy maintenance, are coming due. The aircraft is reaching an age where it really needs heavy maintenance so it will be an interesting future.
What is Austrian experiencing in terms of supply chain challenges at the moment?
The supply chain on the A220 seems to be difficult and we don't really know why. There are struggles but Airbus is working on them. Embraer still looks strong. The (de Havilland) Q400 is seeing challenges, but I'm not sure whether this has something to do with the pandemic or other factors. It's not the case that we didn't have supply chain problems before the pandemic--sometimes people tend to forget things which have been there before. For instance, labor shortages have been with us all the time.
You stated about not having to let anyone go during the pandemic. What else are you seeing in the labor market?
We took a great risk even hiring people during COVID. We saw that the recovery would happen and we better be prepared. So we didn't stop hiring. We made contractors constant employees and no one was released from the company, which was different to a large number of airlines and MROs that released people from their companies. The people who were let go have not waited around and instead moved into different sectors. Some may be partly coming back to aviation but many others have been lost to the industry. It's a long-term challenge that isn't going away.
You're located in Bratislava, the capital of Slovakia, which has traditionally been viewed as a low-cost labor market. Given the inflation rises and the general trend of labor costs going upwards, has Slovakia lost its status as a low-cost country for regional aircraft MRO?
It isn't the case anymore. The labor is still relatively cheap compared to the West, but there are so few Western competitors left in the regional market. If people talk about low-cost, they think relative to what? That 'relative to what' has gone. They cannot shop around and state they are sending business to a 'low-cost country' because who would that be? It's a side-effect of the past 20 years where everybody found new MROs in the East and tried to use their lower costs. They did successfully for a time but now that Western MROs have left the market, it's just standard cost now.
You're undertaking a project using augmented reality technology. How are you rolling this out and what purpose will it serve?
It is something that was offered to us by one of the suppliers. A technician will wear these augmented reality glasses and look at the aircraft to view the internal structure to easily identify if damage on the outside is a problem or not and document it better. This means considerably less time for checking the aircraft on the outside, especially during processes like painting, and this could ultimately mean the same work being done but with fewer people. This is also a possibility for better coping with the diminishing supply workforce--to be more efficient.