European Independents Ready For 2021 MRO Recovery
Europe’s commercial aftermarket was heavily impacted in the wake of last year’s COVID-19 crisis, and while the development of working vaccines has given fresh hope about an accelerated market recovery, this remains stifled by cross-border restrictions being in place across the continent.
As of January 2021, Europe’s airlines are still not running anywhere close to full capacity on their in-service aircraft, while many of their inactive ones remain either parked or in long-term storage.
Aviation Week’s Fleet & MRO Forecast illustrates the decline in maintenance spend in Europe following a wave of cancellations and deferrals throughout 2020. Last year’s pre-COVID data showed a projected outlay of $23.1 billion in 2021 for the continent. The revised forecast now estimates $18.6 billion will be spent this year in Western and Eastern Europe combined.
While many across the aviation ecosystem have had to adjust their business models as a means of long-term survival, the future roles of independent maintenance providers will likely further take prominence in 2021.
For Pietro Pascale, general manager and accountable manager at Italian MRO Atitech, the company had to move quickly to offset declines in areas such as heavy maintenance, line maintenance and work related to engines and components.
“The impact of COVID-19 forced the industry to reorganize the business, to cut all non-essential cost and to focus on new business demand in areas such as new-generation aircraft, new technology, new skills and new markets,” he says.
The Naples-based company added CAMO Part M approval last year. It also saw an opportunity in acquiring surplus parts stock, which Pascale says was done as a sign of optimism about future opportunities post-crisis.
Another expanded part of the business is a Part 147 technician training joint venture with fellow Italian company Aircraft Engineering Academy of the SEAS Group, with a memorandum of understanding signed to train technicians in the south of the country.
Pascale believes the market will recover long-term but it'll be done at different speeds in terms of market segments. “We consider that regional and narrowbody maintenance demand will recover first, and the widebody segment recovery will likely take longer,” he says. He feels that widebody aircraft, when in storage, present an opportunity to carry out modifications along with cabin reconfigurations due to these tasks being associated with longer lead times.
With some analysts seeing a somber long-term outlook for the widebody aircraft market, with some programs such as the Boeing 747 and Airbus A380 set to be consigned to history at accelerated pace while a wave of older 757s and 767s retirements is also anticipated, it’d be easy for some providers to focus their attention elsewhere.
However, in the case of Hungary-based MRO provider Aeroplex, it still sees widebody maintenance as a big part of its future. The company plans to build a new 26,300 ft.2 maintenance facility in Budapest which, in addition to line maintenance, will also see it branch out into widebody base maintenance and additional component services from the beginning of 2022.
“The need for this [widebody maintenance] was unquestionable in the past and there will continue to be a demand for this going forward, too,” says Arpad Demeny, CEO of Aeroplex. “There are ongoing negotiations for widebody aircraft maintenance, some of which are already done, and others are close to being finalized.”
Unlike many other companies, Aeroplex hasn’t looked to deviate away from its pre-crisis strategies and will extend capabilities as previously planned, with other specialist areas such as engine parts, defense projects, helicopters and cargo work also targeted.
Demeny believes that the aftermarket recovery will start from the European spring, before becoming more visible next summer in the passenger segment. He expects the spike in the cargo market seen in 2020 to also continue.