How COVID-19 is impacting engine MRO
As a result of this unprecedented crisis, airlines are extremely focused on cash management to ensure their survival. Fleet planning is highly dynamic and MTU Maintenance is supporting its customers and partners with scenarios and engine MRO strategies to maximize the use of existing assets, but also to avoid unnecessary spend.
It is difficult to derive regional trends in MTU shops as customers come from all over the world. In general, there has been less demand from direct airline customers – in particular if they are in regions currently under severe or continued lockdowns, or with dramatically reduced flight schedules. Yet due to the sustained activity among cargo operators, demand for MRO services on engines such as the CF6-80C2, GE90 Growth and PW2000 has remained constant.
Demand for services for newer engine types, such as retrofits for the PW1100G-JM or Leap-X workload, has also been robust, mirroring the enhanced flight utilization of these newer engine types. New generation engines will remain important programs in the MTU network in the coming years also, as so far, many of the aircraft that have returned to service are the newer and more popular types.
At present, MTU Maintenance is seeing customers move away from the traditional planning, with fixed maintenance intervals, to more customized and individually-tailored solutions. It is possible to utilize assets for a longer period of time and only invest in small workscopes for instance, but this requires flexible, customized maintenance concepts and expertise, like that of an experienced MRO provider such as MTU.
Planning options may include green-time engines that are leased in or taken from elsewhere in the airline’s fleet, depending on utilization. Using this strategy, airlines are poised to save 1.75 billion US dollars in MRO costs between now and 2022 by tapping engines on idled aircraft instead of sending power plants in need of shop visits in for MRO, according to Oliver Wyman. By 2022 though, the green-time impact on delayed maintenance expenditures will likely evaporate.
Furthermore, used serviceable material (USM) will become an increasingly attractive option as part of a creative MRO solution for operators. MTU Maintenance has always used USM as an alternative solution to reduce shop visit costs for operators and does not expect this to change. Currently, the company expects an increased availability of assets to be offered as a result of reduced fleet sizes and related retirements. Though the market has been rather quiet in terms of asset transactions. The USM market is driven by supply and demand, and the current crisis will certainly have an effect on price on the long-run.
Chances and opportunities
A crisis of this dimension forces MRO providers to continuously innovate new service solutions to suit the evolving market environment. MTU believes it is important to maintain a highly flexible organization that can adjust quickly to market developments. The company is calling this #SmartNewNormal and it is adapting capacities to meet demand and customer needs.
MTU strongly believes that digital services will support an effective post COVID-19 industry restart. The MRO provider combines digital technology with its experience of over 20,000 shop visits in 40 years, which makes for very powerful engine analysis. MTU’s engine trend monitoring (ETM) tool was introduced in 2006 and is continually developed. The company is now taking it to the next level and integrating ETM into engine fleet management software.
Using the software, an intelligent maintenance costing and planning tool, MTU generates engine fleet management scenarios and workscopes. Smart predictions and artificial intelligence enable customized, immediate and proactive MRO planning options – not currently available on the market today. Fleet planning scenarios can be immediately and endlessly adapted as the financial, technical, operational, environmental, and market considerations continually change – as is being experienced daily at this time. Airlines are ensured accurate and timely recommendations as to the most economic MRO strategy for the fleet and can make more informed decisions.
MTU’s tool provides operators with real-time insight into how the crisis affects their operations and which engine to re-activate first. It enables them to unlimitedly tweak variables in their planning scenarios and see how this would affect MRO and in turn, significantly reduce cost. MTU sees great demand for such a tool both now and in the future.