Daily Memo: Recovery Phase Could Trigger Short-Term MRO Shortage

MRO Ameco aircraft overhaul
Credit: Ameco

The Asia-Pacific MRO industry is expected to face a temporary capacity crunch in the post-pandemic period, as airlines are likely to be returning many of their stored aircraft to service at roughly the same time.

Major MRO companies in this region have seen a significant dip in business due to airlines parking large numbers of aircraft and deferring heavy maintenance. But demand could spike quickly when COVID-19 restrictions ease, with many Asia-Pacific airlines needing MRO providers to help reactivate and perform checks on aircraft that have been in storage for several months.

There is no capacity shortage now because much scheduled maintenance has been pushed back, said Romulo Raras, head of engineering for Philippine Airlines. “But the question will be whether there is enough capacity as we exit the pandemic to cater for all the aircraft coming out of storage, considering some MROs might have reduced their [workforce] to survive,” Raras said during Aviation Week’s recent MRO Asia-Pacific event.

“I think we should be preparing for that already,” said Raras. “We have to urge the MROs to start preparing ... [airlines] should probably be planning it with them ahead of time, so as we exit the pandemic, we’re ready to open up travel again.”

Those on the providers’ side have a similar view. When governments remove cross-border restrictions, “most airlines would want to immediately jump back in and crank up [services] again,” said HAECO Group CEO Frank Walschot. “There is a fairly high chance that for a relatively short period of time there will not be sufficient [MRO] capacity simply because there will not be enough parking spaces in and around hangars” to handle the demand.

However, Walschot believes that this “will only be a relatively short-term issue and will not drag on very long.”

GAMECO CEO Norbert Marx said “there will be a surge [in demand] to a certain extent” after the pandemic, which could cause a shortage in maintenance slots. But he noted it will be temporary in nature, and could differ by region, aircraft type, and airline customer.

“The airlines and leasing companies will have to plan very well, and if they have reduced their [workforces], that could also add to the problem,” Marx said. “So there will be some difficulties, but it will not be a systemic issue for the MRO industry.”

The resurgence of COVID-19 due to the delta coronavirus variant means it is unlikely there will be a big surge in MRO demand in the near term, said Foo Kean Shuh, SIA Engineering Company (SIAEC) SVP for corporate planning, fleet management and commercial. “But I have to say, it would be a welcome problem if demand does come back—I think it’s something we can [cope] with.”

Despite the prospect of a fairly brief short-term shortage, MRO executives agree there will be plenty of maintenance capacity in the region in the longer term. Most of the major MRO providers had facility expansion plans in place before the pandemic, and these projects generally remain on track.

However, a familiar problem is also certain to rear up again. Finding enough skilled workers was already a headache for many Asian MRO companies before the COVID-19 crisis, and the recent demand slump has provided many with a temporary reprieve. But as MRO business rebounds, the workforce dilemma will also return—with the added factor that the aviation industry may have lost some of its luster for prospective employees.

Adrian Schofield

Adrian is a senior air transport editor for Aviation Week, based in New Zealand. He covers commercial aviation in the Asia-Pacific region.