MRO Labor Market Changes During COVID-19 Crisis
The many challenges brought about by the COVID-19 crisis was expected to have a least one benefit: the easing of the shortage of aircraft mechanics.
This has occurred to some extent, but not nearly as much as one might have expected, at least according to three MRO executives who are close to both supply and demand for skilled technical labor.
The market for aircraft maintenance mechanics is “now as tight as I’ve seen, there is a lot of demand," says Philip Anson, CEO of STS Aviation Group. In addition to its line stations and staffing work, STS has a five-bay facility in Florida and two widebody hangars in the UK. "They started filling up completely at the end of 2020; now we are turning work away," Anson says.
The STS CEO attributes demand to the need to prepare parked aircraft for return to service this summer. It’s a temporary bump, and STS often has to pay an extra $2-3 per hour to attract the needed mechanics.
Anson does not expect the airline industry as a whole to come back to prior levels until at least late 2022. Low-cost carriers, which dominate STS’s customer base, are expected to recover sooner than the major airlines.
But right now, Anson has one hundred recruiters looking for mechanics. They are mostly needed for letter checks. Mods, interior and Wi-Fi upgrades are “wants, not needs,” and will be slower to return. Line checks will lag a bit until the expected increase in flying actually takes place. “The big question is whether the summer season will be busy or not,” adds Anson.
Some furloughed or laid off mechanics now working in non-aviation will return; other will not. The same is true for mechanics who went to work for cargo carriers. Short retraining—one to two weeks in a familiarization course—is often necessary if a mechanic is to work on a new type.
Anson says drug and alcohol testing for any mechanic who has been out of the testing pool is also necessary, but can be done quickly. “We retest in a day, and get results in two days. It’s not a big delay," he says.
Time required for security and background tests depend on the airport where a mechanic will be working. “I wish TSA tested them for one badge,” Anson says. “Every airport is different. Some take a day, some a month.”
Almost all mechanics are young and healthy and thus have not been eligible for the limited COVID vaccines available yet. As vaccine supplies increase, Anson says a question may arise about whether employers can require vaccines for employment.
In any case, he is looking forward to the possibility there will be more work for outsourced MRO, at least after 2022.
Mike Guagenti, CEO of Launch Technical Workforce Solutions, says “it is a myth that airline and MRO layoffs created a glut of mechanics.”
The same basic shortage that existed before the virus crisis still exists, Guagenti insists. Airline mechanics still get to work steadily at home bases and earn higher pay. Guagenti’s contract mechanics earn less and must continually move around. He says it is still hard to find seasoned mechanics on these terms, and the industry is not creating enough young talent.
“Early on, as commercial airlines and MROs parked aircraft, we saw a movement from airlines to storage, cargo and defense,” Guagenti notes. “They’re not coming back.”
Launch now has 1,200-1,300 mechanics in its contract workforces, about 80% of its pre-crisis peak. That count was much lower in summer of 2020. “What saved the market was storage programs. We had 500 workers in storage and they are still there,” Guagenti says.
Launch began climbing back up in last year’s fourth quarter. Some shops and especially some OEMs that have laid off mechanics and are uncertain about rehiring them choose Launch’s contract workers to fill possibly temporary gaps.
United Airlines’ announcement of renewed maintenance jibes with what Guagenti is seeing as fleets are rationalized and deferred maintenance is done for summer flying. He is hoping things will be closer to normal by late 2021 or early 2022, with most shops using a mix of direct and contracted workers.
But reduced fleet sizes and maintenance-stingy new aircraft may hold mechanic counts down. Few workers who took early retirement packages will come back. And Guagenti says airlines do not pay enough to outsource shops to enable the shops to boost mechanics’ wages. “We are still losing graduates of AMT schools to other sectors," says Guagenti. He argues “a three-way conversation” among airlines, shops and labor providers like Launch is necessary to change that.
Like Anson, the Launch CEO sees no delay from drug and alcohol testing of rehires. But he says delays at the county level do crop up in background checks for security clearances.
Launch works with AMT schools and the military to bring new commercial mechanics into the industry pipeline. He believes the key is offering new entrants a steady progression from contract work to shop to airline, each step bringing better pay and working conditions.
“The mechanic shortage is not as critical as it was before the pandemic,” argues Fred Murphy, CEO of FEAM, which does line, base and other maintenance work. “We are getting a little more activity for our openings.”
Murphy says there is certainly no glut of aircraft mechanics, especially after the Payroll Support Program (PSP) was renewed until March 31. He expects there may be a real problem when the PSP runs out, noting that many of the rehired mechanics have jobs but not enough work to do. “There are still a lot of aircraft parked. We might see another round of Big-3 layoffs," says Murphy.
Maintenance on stored jets has provided jobs for trained mechanics during the crisis, but the skills required for part-out are less demanding and require no licensed workers.
The FEAM executive does not expect a return to normal in MRO labor markets until at least late 2022 or early 2023. He notes that mechanics’ wages have held up and are still quite high.
But when traffic returns, so will the mechanic shortage. “Lots of mechanics have left for other fields," says Murphy. "In New York, where we have a big station, we lost guys to transit maintenance because they had hydraulic and electric skills. Now they have jobs like police. They get high wages, work Monday through Friday and get to retire early. Getting them back is a challenge.” As for the passenger airline mechanics who went to work for cargo carriers, Murphy says “there’s no chance of getting them back from FedEx or UPS.”
Even major airlines that pay very well have a hard time competing with other mechanic options that can pay six figures and ensure no layoffs or midnight shifts. And Murphy sees in his own workforce the tendency of many mechanics to be nearing retirement age.
Like Anson, Murphy says retraining is necessary if a rehired mechanic must work on a new aircraft type. Type training may take only a couple of weeks in the U.S., but in Europe or Asia, more extensive requirements mean it can take six to eight weeks. Security checks tend to be shorter at small airports, but can take a long time at major airports like Los Angeles.
Murphy, too, expects the trend toward more outsourcing to resume as the industry recovers. “It’s very cost-effective and hard to get away from that trend, though American has tried," he says.