The Aviation Maintenance Profession - Term Paper Example

Name: Aircraft Maintenance Management Institution: Date: Contents List of Abbreviations/Glossary 3 Executive Summary 4 Aircraft Maintenance Management 5 Introduction 5 Maintenance Market Needs 6 Maintenance Shop Site Selection 8 Cost, Risks and limitations of setting up an MRO 10 Setting up an effective business. 12 Conclusions and Recommendations 14 References 16 List of Abbreviations/Glossary 1. EASA (European Aviation Safety Agency). 2. AMT (Aircraft Maintenance Technicians). 3. MRO (Maintenance, Repair and Overhaul). Executive Summary There are many challenges that surround the aviation maintenance profession. Just to emphasize on these challenges, most if not all of the aviation industry is still governed by laws that are estimated to be around 50 years old (Ryden, 2015). Within the aviation industry, most of the professionals who are perceived to be of airworthy quality are of age. New technology continues to flood the aviation industry, and it is high time to revamp the old laws and policies that govern the maintenance of aircraft. Most of the new professionals who aspire to work in the aircraft industry lack the vast technical knowledge that has been in existence over the years. Ryden (2015) asserts that such challenges are as a result of insufficient skills. If this is true, what are the shortcomings of the current market needs within the aviation industry considering the expected growth of the aviation industry? In aviation, there is a major concern for MRO services. For the purpose if this research, the London Heathrow airport shall be at the center of the case study. The distribution of the stakeholders in the aircraft maintenance business offers additional challenges based on the fact that airplanes travel for great distance while in operation. Most importantly, Ryden (2015) mentions that a reliable supplier of aircraft maintenance parts and components is crucial. Throughout an aircraft operations, are the needed maintenance equipment available during maintenance? Does the location of the maintenance shop matter while dealing with airplanes? With the London Heathrow airport as the chosen case, does the location of their maintenance shop affect the airport? While exploring the possibility of setting up an MRO in the proposed location, what are, if any, the limitation, risks, and cost implication involved? These are the major factors to be discussed in the succeeding sections of the paper.   Aircraft Maintenance Management Introduction Safety is one of the paramount aspects of the aviation industry. Optimal maintenance of airplanes and their components is vital for the safety of all the passengers and crew onboard. Most importantly, safety is important for those who are on land. Over the history of aviation, the implementation of safety changes and maintenance of aircraft has been admirable. It is said, one is mostly likely to get into an accident on their way to or from an airport than boarding one. The vital stakeholders in the maintenance of aircraft are repaired stations, the maintenance crew, as their sole purpose is not only to perform routine maintenance but inspection of aircraft before takeoff. As for the London Heathrow airport, the EASA (European Aviation Safety Agency) takes all the responsibilities of ensuring that all service and maintenance stations and technicians are certified. During any maintenance, the AMTs are tasked with performing very specific jobs in regards to servicing the airplane. In addition, their level of involvement is dependent on their level of experience in the field and on the aircraft at hand. All these and other safety policies are what the paper will research on. Most importantly, we should acknowledge that a reliable supplier of aircraft maintenance parts and components is decisive. During aircraft’ operations, what are the availability of all needed maintenance equipment and their respective capable, skilled technicians? Does the London Heathrow airport have an ideal location of its maintenance shop matter while dealing with airplanes? The paper shall investigate the current and near future maintenance market needs.   Maintenance Market Needs The market needs of Europe, specifically London are confusing. The likelihood of an airplane getting an interior overhaul has been on the increase. It is without a doubt that this maintenance requests come as good news for MRO facilities. As Walton (2015) reports the increase of airplanes refurbishment does not spell out a bright future for the MRO market. The introduction of newer, more advanced aircraft has a major part to play in the expected market decline in the industry. Walton (2015) explains that the new airplanes require fewer visits to the maintenance hangar. These declines are not expected to be present in the London market but on a global scale. However, Walton (2015) is quick to Consultancy.uk that there might be a glimpse of hope for the future of MRO providers. He insists that the introduction of the newer and advanced airplanes will imply that they, MRO providers adopt or conceive newer strategies to penetrate the plummeting market. As this shall be the only way to remain dominant in the MRO’s market over the next few years insists Walton (2015). Moreover, he cites a report in which JP Morgan are reported to have mentioned that more airlines have adopted policies that cut on their maintenance operation costs. In their study, JP Morgan reports the use of health monitoring technologies. These systems monitor an aircraft’s system and help suggest the required maintenance needed. In addition, airlines are reported to use software that predicts maintenance requirements cycles for their fleet. Lastly, airlines have adopted efficient operational activities such us, proper cleaning of engines and the de-rating of engine power, especially in taxi operations. All these practices reduce the overall expenditure on maintenance operation costs. Nonetheless, it spells out a decrease of business for the MRO providers side (Sahay, 2013). The London Heathrow airport is one of the busiest in Europe. Peerun (2015) reports that a massive increase in the number or aircraft is expected. With the London Heathrow being at the center of all these expected growth, the number of airplanes expected to increase. However, as explained by Peerun (2015) and Walton (2015), these new planes shall have longer maintenance cycle gaps. Maybe the most promising aspect of the MRO market are the numerous aircraft refurbishments. However, Walton (2015) insists that they are not capable of pulling MRO out of the expected fall of the market shortly. Major MRO’s such as Lufthansa are aware that it is pivotal to strike a balance between costs, offshoring of work, and safety or airline passengers and cargo. Walton (2015) asserts that the future of MRO providers in London could start by offering competitive costs for the services they provide. The other factor that might prove to be ideal for MRO providers is location and skills. For instance, Airbus recently acquired a new assembly line in Alabama. From a Europe perspective, they can deem these as a chance to set up operation and maintenance base, on the outskirts of Europe. London as a city is very congested. Getting an ideal space to house an MRO facility is nearly futile. Moreover, the coast implication of expanding and or setting up are reasonably high. By setting up MRO facilities elsewhere, provided that the location is ideal with skilled labor in abundance and reasonably affordable, these service providers can offer the competitive cost cutting strategy needed to penetrate the future market. Maintenance Shop Site Selection The location is an ideal factor to consider when opting to set up an MRO facility. Nonetheless, Ryden (2015) mentions that the expected growth of the airline industry is expected to offer new challenges. Unlike before, the location of an MRO facility is dependent on numerous factors. Ryden (2015) insists that the aviation industry is expecting an increase of airlines thanks to a boost of required infrastructure and demand for airplane services. In a nutshell, he cites that these expectations spell out future success for MRO providers. However, business aviation analysts such as Peerun (2015) and Ryden (2015) the future of MRO is not cut out. Aircraft manufacturers employ the latest of technology to maximize on the efficiency of airline careers. Such news came as a glimpse of hope for airlines and not for MRO providers. As the expected growth of the aviation takes its shape with the introduction of newer more efficient aircraft, the MRO future continues to dim. Peerun (2015) explains that modern technology makes it possible for a new airline to extend the gap between successive maintenance cycles. The major business for MRO providers is directly affected by the maintenance gaps of aircraft. The shorter the gap maintenance cycles, the better for business. However, despite the much-reported aircraft refurbishments reported in Europe and the rest of the world, other market-oriented strategies are needed for the penetration of the MRO market. Before venturing into the expansion and or setting up an ideal MRO facilities, availability of space is dependent on the location. In a vibrant city such as London, ideal land or facilities to house big MRO plants are very expensive to find. Most importantly, any venturing into setting up an MRO facility is dependent on the size and financial capacity of the investors. Walton (2015) mentioned that the future of MRO service providers is dependent on strategic planning. Finding an ideal location in London might not be an ideal move. It is ideal to exploit other markets and location, for instance, Ryden (2015) reports that India is expected to be the third largest aviation market by the year 2020. Several factors attribute to these promising statistics. Nonetheless, despite the feasibility advantages of setting up an ideal MRO facility with minimal costs, other factors have to be considered for the prosperity of the same. The availability of skilled labor and aircraft components is crucial. It is crucial to balance availability and affordable skilled labor, location, and availability of maintenance of resources. Figure 1: Cost of Skilled Labor With London being a congested city, the prospects of setting up an MRO facility are challenging. However, a few miles away lies an ideal location for the same business venture. Alabama, despite its location, can be ideal for setting up an MRO. As mentioned earlier, getting an ideal space to house an MRO facility is nearly futile. Moreover, the cost implications of expanding and or setting up are reasonably high. By setting up MRO facilities elsewhere, provided that the location is ideal with skilled labor in abundance and reasonably affordable, these service providers can offer the competitive cost cutting strategy needed to penetrate the future market. Cost, Risks and limitations of setting up an MRO Ross (2015) asserts that it is easier to setup a world class MRO from one that has been in existence and well matured for the industry unlike starting from scratch. In his argument, he insists that the initial cost of setting up an MRO facility from scratch implies starting with an empty warehouse facility. Compared to investing in a facility that has been in existence for a while, it is viable to invest in one that has been running for a while. Investing in an existing MRO or one that is on the verge of collapsing seems to be the ideal economical approach. Ross (2015) mentions Thomas Edison perception on his attempts to making the first electric bulb. He, Thomas made a breakthrough after an estimated 100’000 tries. However, Thomas comments that he learned of 100’000 ways of how not to do it. Some of the crucial procedures when setting up a new MRO or revamping an existing MRO facilities play pivotal roles in determining its success. Ross affirms that a thorough parts need analysis are the first step. Setting up an ideal supply chain is crucial to the prosperity of any business and especially MRO service providers. Secondly, it is setting up and planning the layout of the facility to ensure you maximize the size of the facility. Figure 2: Percentage of MRO services With London as a thriving city, some of the major risks involved in setting up an MRO shall be stiff competition from mature players and the expected plummeting of the MRO industries. Peerun, (2015) reports that the aviation industry expects to grow. However, the major beneficiaries of the expected growth shall be the major stakeholders in the air transport industries. As for their counterparts, MRO providers, their market share is expected to take a hit. MRO stakeholders will not welcome the arrival of new advances aircraft that have big maintenance cycle gaps. However, MRO service providers shall not be rendered out of service yet. Furthermore, these expected changes come as a challenge for MROs to revise their operational strategies and policies. However, the expected changes shall be daunting for any new prospects venturing into the MRO market for the first time. Setting up an effective business. The success of the commercial air transport industry is directly related to the commercial aircraft MRO market. There are strict international and national guidelines that stipulate that advocate airworthiness of cargo and passenger aircraft when in operation. Most importantly, the task of ensuring the airworthiness of aircraft is in the hands of MRO’s. It is mandatory that all MRO’s and airlines ensure they adhere to these guidelines (Peerun, 2015). All the stakeholders in the MRO’s industry are centered on looking forward to a bright market future. These high airworthiness standards bring about an aspect of a promising future. Most importantly, they breeze across other stakeholders in the airline industries of the surety of the thriving business, especially in London. The most basic contributor to the prosperity of the MRO’s and the air transport industries is safety. As such, both national and internationals bodies insist on a set of strict policies. These policies that govern the airline industries, air transportation and MRO’s have to be implemented by all parties. Failure complies the termination of operating licenses and or hefty fines implication. Figure 3: MRO Market forecast Peerun (2015) offers some glimpse of future for all MRO’s potential investors. She reports that the global market is estimated to be worth $61.6 billion. Ideally, any optimistic entrepreneur will be inclined to invest more in such a promising market. Nonetheless, the aircraft industry is an expensive venture. Furthermore, moderate growth of both industries is expected to grow. These findings as reported by Peerun (2015) make London an ideal place to set up an MRO business. For most new MRO’s the expected gradual growth of the industry will not be ideal. As it makes it an ideal future for existing MRO with an admirable share market. Despite the MRO being a very lucrative business, the pivotal stakeholders in the Air transportation industries are few. Ryden (2015) explains that the small in numbers of these “pivotal” stakeholders does not necessarily spells gradual growth for MRO’s future. However, it is important to note that Major airlines tend to stick to their trusted MRO’s than opt to venture out to look for new players in the market. Moreover, Ryden (2015) is keen to mention that the MRO’s future for both new and old players is bright. The airline industry is expected to grow both in London and on a global scale. Figure 4: Market Share Forecast Some of the expected contributors to the growth are the increase of aircraft infrastructure and traffic and with these expectations, Peerun (2015) reports an exponential growth of MRO’s is inevitable. However, it is keen to report Sahay (2013) and Peerun (2015) advise that MRO’s should expect to upscale their operation standards to keep up with newer airlines such as Boeing 787 and Airbus A350. Nonetheless, the introduction of these modern aircraft could spell a market disaster for MRO’s. Peerun (2015) explains that the reliability of modern airframes on these newer Boeing 787 and its counterpart Airbus A350 has everything to do with a low number of flight cycles. With a lower number of flight cycles, it implies that the airlines shall have subject their planes to fewer maintenance work. Conclusions and Recommendations The aviation industry is a vibrant and active business venture for any aspiring MRO entrepreneur. However, to penetrate the current markets demand, strategic planning is crucial. There are plenty of promising statistics that forecast the demand for MRO providers shortly. However, the spoils of these market share require an ideal approach to standing a chance to prosper. Most importantly, a strategic approach and a revamp of business strategy are mandatory for the penetration of the market. By strategic approach, Ryden (2015) insists that MRO providers start by setting up or expanding their facilities on ideal location. Suitable locations meet the demand for these services with an abundance of skilled labor and availability of maintenance components and peripherals. In addition, a strategic approach to fending off competition is a necessity for MRO providers. The expected exponential and gradual growth of the aviation industry is expected to attract potential MRO investors. Seizing of the large market share for cities that house well-established MRO is a daunting task. Nonetheless, competitive advantages such as reduced maintenance costs charged by MRO is a recommended approach to adopt. Attracting new clients is but the first step towards penetrating the future aviation market for MRO providers. Secondly, retention of these clients is equally pivotal. With the new technology and the introduction of more efficient aircraft, MRO providers should upscale their skilled labor. Ensuring that the required facilities and or resources needed to offer quality MRO services are maintained and offered at very competitive prices is key to customer retention. References Peerun, S. (2015). Commercial Aircraft Maintenance, Repair & Overhaul (MRO) Market Forecast 2015-2025: Opportunities for Leading Companies. [Online] Prnewswire.com. Available at: http://www.prnewswire.com/news-releases/commercial-aircraft-maintenance-repair--overhaul-mro-market-forecast-2015-2025-opportunities-for-leading-companies-507358491.html [Accessed 19 Nov. 2015]. Ross, J. (2015). Where to Start? Building a World Class MRO Process | Marshall Institute's Blog. [Online] Info.marshallinstitute.com. Available at: http://info.marshallinstitute.com/blog/john-ross/where-start-building-world-class-mro-process [Accessed 20 Nov. 2015]. Ryden, B. (2015). Business Aviation: Getting ahead of the game. Aircraft Maintenance Technology, 26(10), pp.6-72. Sahay, A. (2013). Leveraging information technology for optimal aircraft maintenance, repair and overhaul (MRO). Cambridge, England, Wood head publishing. Walton, J. (2015). MRO market faces headwinds despite robust aircraft refurb work - Runway Girl. [Online] Runway Girl. Available at: http://www.runwaygirlnetwork.com/2015/09/23/mro-market-faces-headwinds-despite-robust-aircraft-refurb-work/ [Accessed 19 Nov. 2015]. Read More