It’s a vast area and air traffic is growing, so how is the MRO market in Asia-Pacific faring and is the region ready to meet that growth challenge? Bernie Baldwin gets the views of some leaders in the sector.
Airlines operating in the Asia-Pacific (APAC) region have been the key vehicle for aircraft sales for much of the 21st century. Carriers such as IndiGo and AirAsia have led the way with three-figure orders on more than one occasion, while the full-service carriers have also made significant investments.
All these aircraft, of course, need to be kept airworthy and therefore require regular high-quality maintenance. MRO organisations across this vast area of the globe thus have the potential to be extremely busy in the coming years. But what is the current position of the APAC MRO market, particularly after all the upheavals of recent years? And what are the variations across the different regions within the whole Asia-Pacific?
According to Anand Bhaskar, managing director and chief executive of India-based Air Works Group, the post-Covid market resurgence is helping airlines all over the APAC region to gradually restore operational normality. He says: “With large captive domestic markets that are now witnessing increasing travel, both India and China are widely expected to be the locus of the region’s growth. With regards to India, the travel upswing is driving the growth of the domestic fleet, bringing up incremental MRO opportunities in areas such as cabin and interior refurbishments, as well as aircraft re-finishing/painting.”
Bhaskar adds: “We expect the India MRO growth story to continue, and even accelerate, given the record aircraft orders placed by Indian airlines recently, as well as the rising focus on operating fuel-efficient aircraft which would translate into a higher number of end-of-lease projects soon. This is expected to completely utilise the available indigenous MRO capacity, minimising the induction of aircraft from the rest of the APAC region into India.”
Also based in India is GMR Aero Technic, whose president and accountable manager, Ashok Gopinath, believes the MRO market in APAC is witnessing a transformative phase, characterised by significant growth and evolving industry dynamics. He says: “Fuelled by the rise in air travel demand, the airline fleets are expanding as well, leading to increased investment in infrastructure. These factors have become the key drivers for the growth in MRO services as airlines seek reliable and efficient partners to ensure the airworthiness and safety of their aircraft.
“While the APAC MRO market presents promising opportunities, it is essential to recognise that it is not homogenous across all regions. Different sub-regions exhibit unique characteristics influenced by factors such as economic development, fleet size, airline preferences, regulatory environments and local capabilities.”
GMR Aero Technic has been serving customers from Bhutan, Nepal, Sri Lanka, Thailand, Bangladesh and Singapore, but Gopinath points out that its customer base is not limited to APAC as it also has a “rising customer base” in the Middle East market.
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Recovery and supply chains
Coming back to the home market though, Gopinath adds: “Post-Covid, the recovery of the industry has been relatively steady with the Indian subcontinent experiencing faster recovery. The Indian government’s focus on the ease of doing business in India has attracted many companies to set up shops in the country, serving as a tremendous boost for the Indian economy.”
Moving east into southeast Asia, OEM-approved component MRO specialist Ametek MRO Singapore aims to support and build a reliable supply chain for quality spare components that is essential for efficient aircraft operations. The company’s vice-president and general manager, David Corish, has also been assessing the APAC MRO market, with particular attention to the supply chain.
Corish says: “As aircraft return to service and airline capacity in all regions throughout APAC surges ahead, supply chain disruptions continue to bite. This is a challenge most aviation businesses are finding ways to deal with, and Ametek MRO Singapore has also adapted. “Careful, strategic planning, combined with a clear programme of investment in new capabilities post-pandemic, has paid dividends for us – we are experiencing exponential sales growth so far this year.”
Corish adds: “Singapore’s strategic and central location as a developing MRO hub at the heart of the APAC region reduces flight distances and turnaround times for aircraft needing maintenance. This facilitates the provision of a growing range of MRO services which is crucial for airlines aiming to minimise downtime and operating costs.”
Corish notes that strategic partnerships and collaborations between MRO companies, airlines, and global OEMs have fostered knowledge exchange, encouraged the sharing of resources and contributed towards mutual growth. He said: “At Ametek MRO Singapore, we work closely with our legacy and new customer base worldwide to ensure components are repaired and delivered as required.”
Lufthansa Technik is a global MRO player, with a strong presence in the APAC region. Dennis Kohr, the company’s senior vice-president of corporate sales, Asia-Pacific, offers his view of the market he serves. He says: “Especially in APAC, we are observing a highly fragmented market environment that demands very specific market approaches in each sub-region, and sometimes in each country. In general, APAC is over-proportionally OEM-minded. This means OEMs have a higher market share compared to Europe, Middle East and Africa (EMEA) or North America. As an independent MRO, it is very important to create a tailored and robust value proposition to serve APAC. Products like Mobile Engine Service (MES) are a good example of how we differentiate ourselves from competitors.”
Kohr adds: “The other way around, APAC is serving the other regions and is still very focused on widebody base maintenance. Lufthansa Technik has its large facility in the Philippines where we can offer a very competitive high-quality product not just to APAC customers, but also customers from other world regions.”
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While the current market is lively, planning ahead is vital. It is therefore important to pick up on what the trends are among MRO providers, particularly in terms of improved support programmes and capabilities.
Kohr said: “Globally, we observe a trend to a more dedicated service offering. MROs specialise in one of the big business sectors – engine services, component services, and airframe maintenance. The classical nose-to-tail service providers are rare. From our point of view, this trend is not fully self-chosen. There are two big trends behind these portfolio decisions, namely access to IP (intellectual property) and a shortage of skilled labour.”
Kohr adds: “The IP topic is mainly related to the engine generation shift. Many MROs do not have the necessary substance to make this transformation, so they either focus on legacy or they divest. A shortage of skilled labour has a very similar effect. If you are not able to get enough manpower, you start focusing on parts of the business you are really good at. Therefore, you must reduce your portfolio.
“At Lufthansa Technik, we invested very early in the new engine types, which is why we are now one of very few offering Pratt & Whitney [GTF] and [CFM] LEAP overhaul services. Concerning labour, we were able to keep quite a few people on board during the pandemic and invested right after the crisis in training facilities.”
With the MRO industry continuously evolving, and as a leading player in the Indian subcontinent, GMR Aero Technic observes the changing landscape closely and adapts to meet the sector’s growing demands. Gopinath says: “Over time, the MROs have been providing customised and enhanced comprehensive support solutions to address the unique needs of their airline customers.
“Tremendous emphasis on digitalisation and data-driven solutions to ensure operational efficiency, quick decision-making for maintenance planning, resource allocation and faster turnaround of the aircraft are all being adapted by MROs. The other aspects are the focus on sustainable practices and multi-pronged strategies to increase global footprint through diverse service offerings.”
From the trends that Ametek’s Corish has seen, he believes that, based on planned aircraft deliveries, a flourishing component support capability in the APAC region will be essential for maintaining the supply chain of aircraft parts and ensuring cost effective solutions for operators and particularly engine MRO facilities. He says: “Our future planned capabilities in 2024 and beyond include regional support of Ametek OEM-built equipment on the LEAP and GTF engines.
“In recent months, we have established a new aircraft wheel and brake capability in close co-operation with our sister company Antavia (Ametek MRO), which has facilities at Paris CDG and in Toulouse. This is initially supporting business jet/regional operations and we have noted OEMs of these aircraft types have welcomed a local service that can cater to the bespoke requirements of individual aircraft owners and operators.”
Corish continues: “We are also in the process of establishing a capability for the complete range of crew oxygen masks. We will be providing both OEM and PMA maintenance solutions tailored to specific operator requirements globally.”
For Air Works’ Bhaskar, some key developments in the Indian MRO market that mirror global trends include the incremental focus on indigenous structural repairs, interiors refurbishment, and other rotable MRO capabilities. He says: “Even maintenance contracts that earlier were short-term have now become multi-year ones, where slots are booked well in advance, for the entire year or more. This has helped MROs plan better, improving TAT (turnaround time) and operational efficiencies.”
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The introduction of new technologies also helps lower costs and/or reduce TATs and, according to Bhaskar, Air Works has been actively transforming itself by rapidly embracing digitisation and digitalisation over the past few years. He says: “Key technologies such as cloud-based information architecture, process automation, Internet of Things (IoT), chatbots, conversational AI and business analytics have already been piloted and deployed across the organisation to drive higher productivity and transparency, as well as operational efficiencies. These technologies are witnessing rising adoption as a younger and more connected employee generation joins this sector. Additionally, we are evaluating emerging technologies such as mixed reality and 3D technology via pilot programmes.”
The team at Lufthansa Technik has long believed that the next revolution concerning efficiency will come from digitalisation. In 2017, for example, the company established its Digital Fleet Solutions business unit and launched the Aviatar platform.
Kohr says: “Aviatar combines fleet management solutions, data science, and engineering expertise with digital services and products. Together with flydocs, the leading digital records and asset solution, and Swiss AviationSoftware (Swiss-AS), the provider of maintenance and engineering software AMOS, we created an entire Digital Tech Ops Ecosystem. For the first time, it is possible to cover all data generated along the entire value stream for technical operations. The new integrated system will improve process efficiency and operational stability, increase aircraft availability, and enhance their value.”
GMR Aero Technic, too, consistently invests in advanced technologies to improve its capabilities, reduce operational costs and optimise aircraft TATs. Gopinath reports that the recent technologies adopted include:
- Robotics and automation – these have been integrated into various MRO processes to streamline repetitive tasks and enhance efficiency
- Predictive maintenance and data analytics – advanced analytics predict potential issues and detect anomalies in a prospective aircraft coming in for a base maintenance visit, which helps in critical resource planning and faster TATs
- Augmented reality (AR) as a tool for aircraft maintenance – this technology has proven to be invaluable for maintenance training and troubleshooting. AR-based tools that can help improve efficiency and reduce aircraft down times are currently being evaluated
- Digital documentation and paperless workflows – these have streamlined administrative processes. Digital transformation will lead to improved communication, coordination and data accessibility, resulting in faster decision-making and reduced aircraft TATs.
According to Ametek’s Corish, a continuous programme of upgrading and expanding MRO facilities across the region is evident with investments in modern workshops and equipment to repair components for a diverse and expanding fleet of aircraft.
He also believes that – in addition to technologies – the growth of the MRO landscape highlights the need to resource all MRO businesses with the right skill set. He says: “We are seeing the benefits of embracing Singapore’s inclusive and diverse culture. Our incremental growth over the past 12 months has required a significant increase in staffing levels and we are pleased to say that vacancies have been filled through employee/industry recommendations and referrals. Making Ametek MRO a place where people want to work and develop their skills is key to our growth strategy.”
An improving market – with many positive trends backed up by considerable efforts to attract talent – indicates that MRO activity in the APAC region is set to match the aforementioned airline growth.
This feature was first published in MRO Management – August/September 2023. To read the magazine in full, click here.