MRO Survey 2017: When Growth Outpaces Capacity

Oliver Wyman’s 2017 MRO survey finds that executives from the maintenance, repair, and overhaul (MRO) industry are worried about an anticipated shortfall in the number of adequately trained mechanics at a time when the global airline fleet is expanding and modernizing.

Over the next decade, the record number of maintenance technicians eligible to retire will outpace the total of new mechanics entering the market globally. For example, by 2027 in the US, demand for maintenance technicians is forecasted to outstrip supply by 9%.

Additionally, the shortfall is expected to create expertise gaps in critical areas as the industry finds itself having to service a fleet that by 2027 will be almost equally divided between older and newer technology aircraft. Already, a majority of survey respondents (78%) report that it is getting harder to hire mechanics and the tightening labor market is pushing them to rely on overtime and other stop-gap efforts to keep up with market demand.

Meanwhile, the promise of advanced analytics and game-changing technologies remains elusive for many in the aftermarket, with only 20 percent of respondents currently seeing a material impact on business operations from these technologies. Participating executives describe their industry as constrained by old IT systems (62%) that lack functionality and flexibility and are too often not compliant with changing regulations.

Given the looming labor shortage and failure to upgrade technology, Oliver Wyman sees a prospect for rising maintenance costs and an increase in turnaround times (TAT) for scheduled maintenance. In response, airlines are likely to retain more spare aircraft as a backup for potential servicing delays.

For example, by 2027 in the US, demand for maintenance technicians is forecasted to outstrip supply by 9%

Tom Cooper speaks at MRO Europe in the Trends and Forecast session.

MRO Americas Trends & Forecast Presentation

The presentation materials from Dave Marcontell's MRO Americas presentation discusses the firm’s 10 year fleet forecast and corresponding impact on MRO for narrow body, wide body, regional jets, turbo props; the talent shortage facing the industry, its timing, and how it will affect the industry; as well as new technology adoption or lack of it with game changing technologies like drone supported maintenance, paperless shops, predictive maintenance, smart sensors, and virtual maintenance.

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CAVOK Vice President Dave Marcontell presents his industry analysis and forecast.

1What does this technical labor shortage mean for the airlines and MRO industry?

The forecasted shortage in aviation mechanics can be expected to increase competition for technicians. If not addressed, it may raise the cost of maintenance in the near term and in the longer term compel airlines to maintain spare planes as back-up to avoid cancellations and late departures, as a result of delays in repair schedules.
2How can the industry create and retain more skilled maintenance technicians?

To compete for tomorrow’s tech-savvy mechanics, the MRO industry and airlines have to be prepared to match wages, benefits, and perks other industries offer. At the same time, they have to take more advantage of emerging technologies that will make the maintenance, repair, and overhaul process more efficient and automated.
3What role does technology play in either easing or amplifying the labor situation?

Technology is a double-edged sword for the MRO industry. On one hand, the industry is confronting a new data-intensive, digitally sophisticated generation of aircraft that will require upgrades in legacy IT systems and extensive new training of mechanics. On the other, the massive supply of data now available with these new aircraft is opening up a new frontier in advanced analytics and predictive maintenance which is incredibly exciting.