MAINTENANCE STRATEGY
MORE TO MAINTAIN
InterVistas’ Emre Serpen considers the processes airline MROs should be undertaking when looking at how they can develop their business as the market grows
A
irlines today face increasing competition. Boeing’s latest global market forecast estimates the number of aircraft in service will grow from 19,890 in 2011 to 39,780 aircraft in 2031. It sees delivery of 34,000 aircraft over these 20 years, including more than 23,000 single-aisles. At the same time, a study by aircraft lessor Avolon shows the proportion of the aircraft fleet that is 25 years and older has increased from 30% in 1990 to 60% today. These figures all strongly suggest that the maintenance, repair and overhaul market is set to grow significantly. Some airlines can benefit from this growth by leveraging their MRO capabilities and extending their thirdparty MRO services. This, however, requires the improvement of their MRO capabilities, and of delivery performance. MROs without a captive customer which have to compete for third-party business have a general need to be more efficient, compared with those that retain captive customers. There are many symptoms of inefficiencies. Often, leadership is focused on day-to-day
execution, leaving insufficient time for strategy, planning and performance management. Other symptoms include a lack of collective view and consensus on priorities and a firefighting mentality that inhibits the delegation of accountabilities and empowerment cascading down to management and supervisory levels. Insufficient focus on costs and productivity, finance marketing and human resource capabilities could limit an airline’s MRO efforts to improve its competitiveness.
The right market segment
Improving competitiveness starts with a focus on the right market segment. This should be one where demand exceeds supply and the airline MRO has previous experience and exposure to the market segment, including aircraft engine and component type. This is then followed by alignment of the business and productivity improvements, enabling an airline MRO to deliver the service at market rates with the ability to grow market share profitably. Factors that influence the selection of particular market segments include the airline MRO’s previous expertise, market demand for
the target segment and available and planned competitive capacity. A market forecast can be executed at the global and regional levels, as well as with a specific geographic focus, and can include the following elements: ■ Aircraft category ■ Aircraft generation ■ Maintenance activity ■ Aircraft/engine type ■ Component category Analysis of supply is just as important as the demand for MRO services. Such an analysis includes the airline MRO’s competitors, relative strengths and weaknesses and market fares. The typical supply-side analysis will address the following questions: ■ Who are the main suppliers/supply groups by MRO segment? What are their strengths and weaknesses? What are their capabilities? ■ What are the main services/value propositions? Where possible, what is their estimated market share? ■ What are the MRO’s pricing strategies? ■ Who are their main customers? What are their fares? ■ Evaluate current and potential customers of
SAMPLE SUPPLY CHAIN PROCESSES
Material forecast
Inventory management
38 | Airline Business | November 2012
Procurement
Stores
Transport
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