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Mon, Mar 28, 2022

Maintenance Organization Says Things Are Looking Up

Despite Pandemic Setbacks, The MRO Market Grows, Though Underperforming Relative to 2019 Forecasts

The Aeronautical Repair Station Association (ARSA) Global Fleet & MRO Market Report was released earlier this month, and has now been digested and presented to its membership at their Annual Conference.

The report shows a "resilient restart", showing promising recovery despite a number of challenges impeding a full return to the pre-pandemic status quo. 

The global in-service fleet had returned to 93 percent of its pre-COVID size by the start of this year, demand flight activity showing a fairly strong trend towards recovery. The air transport maintenance market represented $78.6 billion in global economic activity and, barring any more unforeseen disasters, is forecast to reach $118 billion by 2030. That expectation is somewhat flagging from expectations back from the "before times", about 13 percent lower. Were it not for the pandemic and its attendant economic follow-on effects, the market was expected to reach $135 billion by the end of the decade.

“This year’s forecast demonstrates the amazing resilience of the industry,” said ARSA operations VP Brett Levanto in presenting their findings. “ARSA’s 2019 report included a sensitivity analysis in which the ‘bottom of the barrel’ scenario limited air carrier maintenance revenues to $99.5 billion by 2029." Levanto didn't mince words in addressing his industry colleagues, telling them "It’s fair to say we discovered a lower bottom of a deeper barrel than imagined, yet revenues are on track to land billions ahead.”

The industry's recovery is beset by more than just the missing productivity and economic activity through 2020-2021. Supply chain disruptions, rising prices, surprise renegotiations, alternative suppliers, and an employee drought are all mixed into the simmering economic stew. ARSA paid particular attention to the dearth of qualified maintenance personnel, finding that the most commonly cited concern of members was their ability to find technically skilled workers. 

“There’s been a lot of fluctuation in the past two years, but one thing remains the same: repair stations continue to drive maintenance employment in the United States,” said ARSA executive VP Christian Klein. He reminded the association that they, despite appearances at times, employ far more maintenance personnel than the airlines, accounting for 66% of technical employees. “As we’ve seen year over year, there are almost seven times more men and women working in our component shops and contract airframe or engine facilities than there are airline mechanics. Serving that community is going to be essential to aviation-wide growth. Every position waiting to be filled represents lost money for businesses and the delayed start (or continuation) of a rewarding career for skilled technicians.”




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