Podcast: Live From MRO Americas 2025

Listen in as Aviation Week Network editors and analysts talk tariffs, engine ramp-ups, parts nuances, artificial intelligence and juniority. Recorded live at MRO Americas in Atlanta. 

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Transcript

James Pozzi:                 Welcome, everyone. It's a live recording of the MRO Podcast in Atlanta at MRO Americas 2025. It's been a really typically busy show for everyone, I think it's fair to say, lots of activity, lots of good discussion points, especially on a certain topic which I'm sure we'll talk about today.

                                   I'm James Pozzi, MRO editor for the EMEA Region. Joining me today to my left is Lindsay Bjerregaard, managing editor for MRO at Aviation Week. Next to Lindsay, we have Lee Ann Shay, executive editor of MRO and business aviation for Aviation Week. On the end, we have Daniel Williams, director of Fleet Data Services at Aviation Week. Lindsay, Lee Ann, and Dan, welcome. Excellent, let's jump in then. Maybe we'll start with Lindsay. What has really stood out to you over the last couple of days? Themes, topics, what have you got?

Lindsay Bjerreg...:         Sure. Well, the official theme of the show this year was Shaping the Future of Aviation, and a lot of the things that stood out about it relate to that. Part of what I picked up on was just a matter of what things I was moderating in terms of the panels, so workforce, workforce, workforce came up everywhere, including in John Laughter's opening speech. He talked about how the industry is going to need, I think it was 15.5 million new aviation jobs over the next decade. In a lot of the panels, there was just a lot of talk about what we can do to recruit, retain young people. There was a panel that I moderated about juniority of the workforce. What that means is a larger proportion of really young and experienced people compared to what the demographics have previously been. We had an audience poll asking all of the attendees, what proportion of your workforce has five years or less experience? 63% of the respondents said that 40% or more of their workforce had five years or less experience, so that was a lot.

                                   So some of the discussion revolved around ways in which technology can potentially help bridge the gap, the loss of tribal knowledge, as we always hear people talk about, so whether that means using AI products to help teach younger technicians skills, help them access information faster, whether that was using technologies like virtual reality and augmented reality to help train them.

                                   There was also some talk about this soft skills issue that I've heard quite a bit about from different MRO companies. The reason that comes up is that airlines used to wait until new graduates from Part 147 maintenance schools had cut their teeth for a couple years at third-party MROs or repair shops before then moving on to go work at an airline. Well, now the airlines are recruiting right out of the schools. So I think they're not used to new technicians coming in and not necessarily being used to a professional work environment. So they're always complaining about, from all of the things that I've heard, soft skills.

                                   I thought it was interesting. One of the panelists, Hamish Guthrie, who's Pratt & Whitney's vice president of aftermarket operations in North America, when asked about that, he said, "Well, think back to your first manager in your first job right out of college. What would they have said about your soft skills at the time?" I think that's an important point to make. I don't think any of us were probably super polished in our first jobs.

                                   Something else that came up, too, in the mentorship session, Lori DiMarco, who's senior vice president of TechOps at Mesa Airlines, had talked about how these younger technicians need mentors to be able to have somebody to go to ask the silly questions, the things that they might be embarrassed to ask about. So that was really important as well. I know Lee Ann probably has some things to talk about with that as well, so I will stop talking.

James Pozzi:                 Lee Ann, what are some things that have really stood out to you over the last couple of days?

Lee Ann Shay:               So many things, but I agree with Lindsay on all the workforce things she said. I do think there's a greater need... or at least maybe it's being communicated more. I've heard a lot about mentorships the next day. It seems like there's a good willingness, especially for people who are more mature in their career to be able to give back, especially now with the juniority issue, so important.

                                   For anybody who hasn't been down to the Aerospace Maintenance Competition down there, I'd highly encourage that you go see that. They're testing through various skills. It's just so exciting to see the students, the military teams, the companies all competing under these timed tests. Lots of good energy there. There's also the career runway. There's tables of companies who are actively recruiting people. So if you see someone... We've had a bunch of students here today through various organizations, so we've been sending them down there.

                                   AI, you mentioned a little bit, based on the people we've talked to in some interviews that Lindsay and I just did today, it seems like a lot of companies are taking a conservative approach to AI. They don't have to be the first mover, but they're also developing some of those programs in-house because they want to learn how to use the AI. They're starting in administrative tasks just before they go into something that's a little bit more complicated.

                                   Supply chain, I think last year... I know Dan, you want to ring a bell every time the phrase supply chain comes up, but that was the big conversation last year at this time in Chicago. It's pleasantly surprising to hear that some of those constraints are not as big. The USM market is super hot, and PMAs are growing. So there's some interesting things going on. Also, some companies this week, like Lufthansa Technik announced they are going to start its own used serviceable material business here in North America because they find that there's such a need here. So instead of buying it through a distributor, they're putting their whole pool of parts here in North America. Engines, James, I'm going to defer that to you.

James Pozzi:                 Well, I think the big story of this week for me on the engine front is probably the LEAP network growing, the premier MRO network. It was five providers, of course: ST Engineering, Delta TechOps, Lufthansa Technik, StandardAero, and Air France-KLM E&M. Of course, MTU Maintenance Dallas now has joined that network for the LEAP. They're going to ramp up their operation in Fort Worth to get on board for that. StandardAero, of course, who I mentioned before, they are also accelerating their LEAP ramp up in San Antonio simply because there have been more shop visits than expected, there's going to be more shop visits on the horizon than first anticipated by the OEM, and they need the capacity and the capabilities in order to do that.

                                   I hosted an engine session earlier today actually on the day of this recording, and it was very, very LEAP focused, very LEAP heavy. All of these OEMs, sorry, MROs, of course, they are part of this CFM premier network, but they are going all in on the LEAP, and they're really ramping up for that in terms of workforce, as well, capability, even developing their own repairs. That market maybe has accelerated a bit more than I'd first anticipated. Sebastian Torhorst of Lufthansa Technik on my panel said that I think today LHT has developed I think more than 500 repairs for the LEAP, and the expectation is that market is going to open up and grow and grow and grow.

                                   Also worth mentioning in relation to MTU Maintenance Dallas, they've also got GEnx capability, of course one of the engine options for the 787. That's going to be full overhaul in the next two years there as well. So a lot of activity there. That's in the dominant... not really a surprise really. I think every conference or show we go to, I think, possibly with the exception of the CFM56, the LEAP does get the most air time in terms of discussion and talking.

Lee Ann Shay:               Although we have to mention Pratt & Whitney…

James Pozzi:                 Of course.

Lee Ann Shay:               ... on, was it Monday, sorry, I'm getting my days confused, I think it was Monday, expanded Delta TechOps' and MTU's GTF, Geared Turbofan.

James Pozzi:                 Yeah, and that's for all variants I think of the LEAP.

Lee Ann Shay:               Yeah, yeah, yeah.

James Pozzi:                 Yeah, that's significant, too, because that aftermarket network has been expected to grow for a while, and that's two established providers that they've added as well, so absolutely. Dan, always a man with things on his mind. What have you seen the last couple of days? You did a good presentation yesterday morning, which I watched and very much enjoyed, about the regional fleet. What has caught your attention?

Daniel Williams:            Thank you very much for the kind comments about the presentation. The summary of the presentation was that at these shows over the past few years, and this really is unscripted, Lindsay talked about workforce, that's problem number one we've been talking about for quite a while. Lee Ann kindly then brought up supply chain, again, completely unscripted. So the third of which is, I guess where I now stand in, is the uncertainty.

                                   I'm not going to say the T word. The uncertainty in the market right now is palpable. Within this room, I have spent a lot of time talking to people because funnily enough I talk and also being talked at and talk with people. I think right now uncertainty is key. Just remaining slow and steady is about the best that we can do right now because there are things that are going on, you could say a force majeure, that are happening outside of any of our remit. Anybody in this room, the thousand-plus exhibitors, the people attending, the people listening to this podcast, if they choose to, I think we need a period of calm to find out what's going to happen. If we'd have recorded this podcast at this time yesterday, it would be potentially different than recording it now. Who knows what it may be tomorrow, in a week, in a month and a quarter, and so on and so forth.

                                   So there is uncertainty in the market. There's some churn in the water. We've already seen Pre-Liberation Day, as it was coined. There's been some cutbacks. The US legacy carriers have cut down their outlook for 2025. United Airlines have said they're going to double their number of fleet retirements in 2025 from about 10 or 11 to 21, so it's not a huge number. However, if you'd have gone back last year, the year before, they were not dreaming of getting rid of aircraft. We are at the point now where appraisers of aircraft are being asked lots of questions as, "Is my aircraft worth more as an aircraft, or is it worth more as the sum of its parts as USM?"

                                   The sentiment is right now it's still worth more than an aircraft because demand is still robust. However, a small tweak in demand, and I'm trying to be very careful how I talk about this because obviously I'm being recorded and somebody will hold it against me at some point, a small tweak in demand for whatever reason could move that needle the opposite way, where all of a sudden that aircraft becomes worth more as a sum of its parts. Whereas, again, over the past two, three years, because the revenge travel from COVID has still been so strong that people are not thinking about parting out passenger aircraft.

                                   So there's a lot of decisions to be made. A lot of companies are tied into contracts to buy new aircraft. The operators have been desperate for new aircraft because the OEMs have been unable to deliver those. So what we may see, if it's not too long, a prolonged period of uncertainty, is that we may just see some fleet renewal. We may see aircraft going out, but these operators bringing in the new aircraft, which is great for efficiency. It's great for fuel savings. It's great for the environment, for the sustainability point of view. However, depending on how long this uncertainty carries on for, that could have different effects in, again, a quarter, two quarters, a year, and so on and so forth.

                                   I think the room is generally quite calm right now. However, it's on a lot of people's minds of where we are is, what's going to happen today, tomorrow, next week? And that's fine. For once, and this is really difficult for me as a forecaster, it's okay to say, "We don't really know. We just need to take a bit of period of time." I was speaking with somebody and they're like, "Come and ask me in 60 days." You're like, "Do you know what? That's not a bad time frame." By the time we get from this event here in Atlanta, maybe to get towards Paris Air Show kind of time, maybe we will understand more then. But I think now we need to sit and wait because right now nobody in this room can influence the people that are making these decisions. Hence, the force majeure type state. So I'm trying to not put a Debbie Downer on it all. However, I'm trying to play, to use an English cricket phrase, a straight bat.

Lee Ann Shay:               But I think we have to talk a little bit more about tariffs. I like your calm approach. None of us in this whole building knows exactly what's going to happen. But we know that there's a lot tax people and a lot of lawyers for probably a whole lot of our companies looking at this issue right now. Whether there's parts here or you're trying to ship them and time and material versus power by the hour, there are so many nuances right now that are just hard and tricky. I'm writing an article about this, so if anybody has any perspective, talk to me after the podcast, please.

Lindsay Bjerreg...:         Just to add to what you guys both said, Dan, you brought up the USM market. Lee Ann and I, we both attended the USM panel this morning, and it kind of turned into just a discussion about tariffs. I thought one of the interesting points that was made is that a lot of the companies talking on that panel deal in teardowns. If you buy an airframe for teardown, you don't know where all of those components were originally manufactured, so you don't know if this part is potentially from the US or from China or whatever else.

                                   David Chaimovitz, the CEO of Setna iO, had said, "Well, we're going to have to parse through line by line by line to see, where does this part come from? Does it make more sense to potentially ship it to our US facility, to our UK facility? Where should it be repaired to minimize the impact of those tariffs?" He had thought that if this goes on long enough, it's going to end up in the courts. There's going to be legal battles over it. He was very candid. I appreciated his perspectives on it. But I think there's a lot more to come on that side.

Daniel Williams:            Just to jump on that point, the force majeure, Howmet announced this week that they deem, I'm going to say now, the tariffs to be a force majeure. Because at the end of the day, contracts that have been signed over recent years, there may be an inflationary percent rise potential. There may be a labor-related rise potential. None of them will have tariffs. However, courtesy of COVID, there may be force majeure clauses in the contracts. If a judge ultimately will decide, via the Howmet issue, that it is a force majeure, then you will probably see lots of other companies force this through, because otherwise somebody, either supplier, the purchaser, is going to have to suck up those extra tariffs because they can't always pass them on.

                                   At the end of the day, if it's a toothbrush, it's the end user that sucks it up. However, with these other contracts for buying an aircraft, so if you buy a Boeing or an Airbus, so if it's Delta bringing in an A350, it's like, what are the tariffs going to be on that, they're going to have to work through all of these things. Delta won't be able to get out of the contract or be able to change the contract, so, therefore, Airbus might have to suck up that tariff cost. Whereas if the force majeure gets forced through and these contracts can be renegotiated, then who pays the tab for that? It could move around. There's just so much.

                                   I think that's why the calm approach is great, because, again, these are all decisions that... We can talk about them, and I'm sure we will have many a podcast about these over the coming weeks, months as we slowly learn more. However, it's a case of there's going to be a judge potentially somewhere that helps make some decision one way or another.

James Pozzi:                 I think what I can definitely say in this time of uncertainty is there is simply zero appetite whatsoever for any of this. It's such a huge headache that the industry doesn't need and a buoyant industry at the moment. The industry is in a very good place, especially compared to where it was four or five years ago now. Yeah, I think that's something that is a bit of a consensus.

Lee Ann Shay:               Can I add one other quick thing I just thought about going back to parts? I moderated the Parts Integrity panel. It included four of the people who were on the Aviation Supply Chain Coalition that looked at the AOG Technics, the falsified part for the CFM engine that TAP Air Portugal found. The coalition, if you go to their website, if you have any suggestions or if you want to participate, the group is thinking about starting to meet again and continuing the conversation because there was 13 recommendations that they made for the industry to just help close some of those loopholes.

                                   One of the key points that I took away from the panel was every company should be looking at and taking action on a couple of them and the technology. Right after the report came out on October 9th, 2024, some people thought that they didn't do enough to try to push technology and force blockchain or digital 8130 tags. They did mention that. They were just saying, every company... They don't want to force one thing. But I suspect that in the next year or two, I think there's going to be some good action. They are looking for feedback. So if you have any concerns, questions, advice, go to that website, and there's a way to do that.

James Pozzi:                 Thank you. Again, that was another really interesting panel this morning that I saw Lee Ann moderate. The content's been great, and certainly a lot of talking points and a lot of coverage to come, no doubt. Any closing thoughts?

Lindsay Bjerreg...:         I just want to say supply chain one more time to make Dan cringe. Supply chain, tariffs.

James Pozzi:                 Supply chain and tariffs. Yeah, so the S word, now it's the T word. As you said, there's going to be plenty of podcasts to come about this, no doubt. Excellent. Well, we typically run it to 20 minutes in episodes, so I think this is time to bring it to a close. But thank you to our audience for joining us today, and thank you for watching and listening to this. Thank you, Lindsay, Lee Ann, and Dan.

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