Conference

CONFERENCE Bouncing back?

The “new” normal could have highs and lows as supply chains and labour issues dog management

The conference was well attended over the 3 days of content

There are bottlenecks in terms of human resources and maintenance is labour intensive, HAECO Group chief commercial officer, Richard Kendall, told the Ramping Up and Ongoing Challenges session that kicked off the MRO Europe 2021 Conference. Despite Asia’s reputation as an economic juggernaut, Kendall saw that region as still looking down, with Hong Kong traffic down 94 per cent on 2019 levels. Air France-KLM engineering and maintenance executive vice president, Anne Brachet, said the key question was about the engines, is there going to be a big wave of engines or not? She added that for the long term, “we feel very comfortable”. Short-haul from an Air France-KLM perspective is doing better every day. “Each time constraints are replaced, we see a big increase in the bookings,” Brachet explained. But increases in bookings means more flights, and that ultimately means more maintenance. “While we haven’t laid anyone off, there has been attrition and attracting people back to MRO,” Kendall said, pointing out that having the resources for levels of maintenance activity seen in the past is a struggle.

Virgin Atlantic engineering and maintenance vice president and engineering director, Phil Wardlaw. said: “We haven’t seen the worst of the supply chain issues. When we get into the engines, I think the supply chain will really matter.” Virgin has 70 per cent of its network across North America, and only 10 per cent of its fleet has not been activated. Wardlaw explained that what helped was the reopening of the USA in November. “It gave us a chance to get our manpower back in and retrained, and any skills fade removed from the system,” he said.

Skills and training are all important for the incoming workforce, and Brachet told the audience that the industry needed to demonstrate to young people that they should work in aviation. “We are working on digital tools to convince young people to come to our industry. There are still a lot of people leaving the industry,” she explained. AAR repair and engineering services senior vice president Brian Sartain admitted that his company had “a lot laid off and we have a very aged workforce of maintenance workers, and they took a package and never returned to the industry.”

He added that a lot of workers were lured away from aviation. Despite AAR investing in the workforce it had left and reaching out for recruitment, it still saw a net decrease in staff. A solution to better training was an investment in augmented reality, “to become more efficient, but it’s also become an attraction,” Sartain explained. Yet still, AAR is short of people.

While MRO firms struggle with labour and supply chain issues, the airlines want flexibility and cost reductions. Air FranceKLM’s Brachet explained that airlines needed an industry of flexibility for the future. Part of this is the uncertainty of the worldwide recovery so flexibility, and cost reductions, are key.

Kendall saw a problem with people costs not going down. Labour costs will continue to go up and material costs will continue to go up. “We’re seeing unprecedented wage pressure, it’s to do with those people who decided to retire during the pandemic and not come back. Wages have increased substantially,” Kendall said. He added that a lot of the firm’s airline partners are expecting HAECO to maintain a certain level of capacity because the airlines could need that capacity in the near term, but they do not want to contract for all that capacity right now.

What the fleets will look like, as airlines whose activation levels are far below Virgin Atlantic’s, is another big unknown. Brachet asked the question, what will be the balance between new and old aircraft, and the answer she gave, and the other panel members agreed: “We are all 100 per cent sure we don’t know.” For Virgin Atlantic, it has Airbus A350 joining the fleet soon, but the airline, Wardlaw said, slowed some fleet renewal, but it will still certainly happen. Like so many airlines, when Covid struck, Virgin grounded its four-engine aircraft.

The airlines’ fleets could be single-aisle heavy as Sartain pointed out that with Covid the planned narrowbody fleet divestitures did not happen. Kendall said that his firm is still retaining capability on “those old aircraft because they aren’t retiring soon”. Brachet said that very recently, Air France-KLM was “seeing signals that the airlines need their engines. We expect a big recovery.” n