by Panasonic Avionics / in Industry
In 2013, the global aviation network carried approximately 3.1 billion passengers on 33 million scheduled departures. A year later, more than 100,000 flights a day took off — a record-breaking moment in the airline industry’s history, superseding the previous year’s mark.
That this milestone was reached while airlines operate on razor-thin profit margins in this post-recession economy makes it even more remarkable.
Though a number of factors have led us to this moment, perhaps the most important one is the role of aircraft maintenance — a key element to the equation that keeps planes running on tight turnarounds.
Maintenance, Repair and Overhaul providers (MROs) play a key role in keeping the aviation industry running efficiently. According to CAPA – Centre for Aviation, the global market is worth up to $50 billion (US) with a majority of the market share focused on North America (35%), Western Europe (26%) and Asia Pacific (17%).
The largest providers, which are primarily in these three market areas, handle airframe, engine, and component services. Engine maintenance makes up the largest proportion of the global market (35%), followed by component (22%) and airframe heavy maintenance (13%). Line maintenance accounts for just over one-fifth of the global market (22%), with modifications making up the balance. A majority of the work is dedicated strictly to commercial airlines with a small percentage focusing on government and military clients. Maintenance accounts for approximately 10% of airlines’ costs.
MRO providers are typically categorized into four groups: in-house (e.g. Delta TechOps); independent third party (e.g. HAITEC Aircraft Maintenance); airline third party, which serve both their parent airline and other clients (e.g. Iberia Maintenance); and Original Equipment Manufacturers, or OEMs (e.g. Honeywell, Panasonic).
Up until the 1990s, the majority of all maintenance work was conducted in-house. The shift to independent and airline third parties came as a result of low cost carriers (LCCs), which grew in numbers during this decade. For perspective, LCCs, which were considered absurdly exotic when Southwest Airlines launched in 1971, now hold an estimated 30% of the U.S. airline market, of which about half (15%) is held by LCC powerhouse Southwest. Worldwide, the global market share of LCCs sits at 17 percent and is expected to grow to 21 percent by 2034, according to Airbus Group. The massive deregulation in many countries has created a new normal; that is, innovative air services to meet passenger demand that mirrors the Southwest model in the United States.
The majority of line maintenance is still conducted in-house, but engine services are now strictly handled by OEMs with other providers holding an evenly-divided share. Component services are divided in a roughly equal proportion. Airframe maintenance is usually handled in-house.
According to Visiongain, a business intelligence provider that publishes independent market reports produced by experienced analysts, the commercial aircraft MRO market was worth $65,490m in 2016. Whereas some major airlines have strong in-house capability, like Delta TechOps, the landscape has remarkably changed due to LCCs.
In developing a no-frills approach while also minding cyclical events like fuel costs and terrorism, LCCs have outsourced their MRO needs to maintain a competitive advantage.
Maintenance, Repair and Overhaul providers (MROs) play a key role in keeping the aviation industry running efficiently. According to CAPA - Centre for Aviation, the global market is worth up to $50 billion (US) with a majority of the market share focused on North America (35%), Western Europe (26%) and Asia Pacific (17%).
As newer planes with innovative inflight entertainment and communication (IFEC) systems have entered the market, the MRO industry has had to adapt. The IFEC market is expected to reach $5.80 billion by 2020, up from 2015’s estimated $2.85 billion. As a result, more brainpower is essential in the areas of inflight entertainment, Wi-Fi and other connectivity services.
“As the systems evolved in the 1990s from simple overhead video to full in-seat AVOD with multiple applications, there was a learning curve,” says Emmanuel de Traversay, Senior Director of Sales at Panasonic Technical Services (PTS). “With growing passenger expectations came increased visibility of IFE system performance, and with the technology still developing, it became too much for the traditional airline maintenance organization to handle — too big and too complex.”
For Panasonic, its role as an original equipment manufacturer (OEM) and an MRO provider for inflight entertainment and communications solutions (IFEC) has allowed its avionics subsidiary to separate itself from the pack. In doing so, Panasonic’s relationship with more than 300 airline customers has become remarkably seamless because it is both an OEM and MRO.
Singapore Airlines, Cathay Pacific, Etihad Airways and Qantas Airways — which consistently place in the top 10 for best airlines — are among the airlines that use PTS, Panasonic Avionics’ MRO services.
“Airlines rely on us to not only develop and implement the system but to monitor and maintain it without having to worry about it and guaranteeing the best experience for their passengers,” says de Traversay. “The operations involved with running an airline efficiently depends on quality partnerships.”
Panasonic Technical Services, which maintains approximately 2,300 aircraft around the world, includes 1,200 people working worldwide at sixty line maintenance stations and seven large-scale repair stations — two in the U.S. and one each in London, Dubai, Singapore, China and Japan.
“When we develop a maintenance package, we work very closely with the airline” says de Traversay. “There needs to be close cooperation for it all to be successful and we want to understand the airline’s operations, route structure, priorities, image branding and industrial culture. Our customized maintenance program will provide guaranteed performance at a very competitive and guaranteed price.”
Whereas airlines used to have their own internal maintenance teams, pressures and conditions of the industry have led to the emergence of external, or outsourced, MRO.
De Traversay says it’s important to be sensitive to this when providers like Panasonic come in. “With the involvement of outside MRO, there is a risk for a divide or tension,” he says, referring to how some internal teams may view an outside MRO partner. “The discussions can be very different between an airline that is looking into making the transition and those airlines who are ‘newer’ or have made that transition a long time ago.”
To ease the transition, the pressure is on the MRO provider to ensure stellar client support; even better is to identify issues before a plane even lands.
“Before, you really needed to have touch labor and had to ‘work’ the aircraft every time it landed,” says de Traversay. “Now, with the systems becoming more and more reliable, it’s less touch-sensitive. There is certainly still the need for on-site personnel to carry out the work on the aircraft and release the aircraft to service. But there’s been a shift towards proactive maintenance planning and remote monitoring. This is especially true for connectivity where we sometimes help while the plane is still in the air.”
With the aircraft running on tighter and tighter turnarounds, optimizing the maintenance opportunities you get by having the right level of parts, manpower and technical expertise on site is key to a successful maintenance program and actively helping airlines stay competitive.”