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The aviation maintenance sector was expected to grow in response to the rapid increase in the number of passengers carried, which was expected to reach 4.5 billion in 2019. But the pandemic has prompted industry players to review their strategies to revive the sector.
Before the health crisis, the world experienced a strong increase in air traffic and experts predicted that it will continue to grow in the next 20 years. Faced with this situation, aircraft manufacturers were thinking of doubling the size of their aircraft fleet by that time to 45,000 aircraft. This growth represented a windfall for all the players in aviation maintenance and services. They were even counting on growth of 4% to 5% per year for the next two decades. But what will happen after the crisis?
The Covid-19 pandemic has brought global air traffic to a sudden halt: airlines are currently facing an unprecedented drop in global air traffic (-80% compared to January 2020), with fleets grounded. Such a downturn has had a significant impact on the aerospace industry, including MRO activities.
According to Deloitte, to address the new post-crisis paradigm, two main transformations in MRO capabilities are required:
Explore new opportunities in nearby markets:
The demand for maintenance services has been negatively impacted, as service providers have had to adapt to modifications in airline requirements (reduction in the number and types of aircraft operated, deprioritization of discretionary maintenance operations, reduction in the average age of fleets after retirement of older aircraft, recycling of parts from decommissioned aircraft).
In order to cushion the fluctuations in demand for civil aircraft, service providers must analyze options for diversifying their business: expanding into air cargo transport, but also into military air or ground markets.
Aiming for operational excellence through digitalization:
To cope with shrinking maintenance budgets, we need to think about digitalization. This means taking advantage of the latest planning technologies, which includes the use of digital twins, real-time monitoring of aircraft health in flight using connected sensors, and the deployment of predictive maintenance systems.
Air cargo resilience and its impact on MRO business:
While the drop in air traffic during the pandemic has hit passenger transport hard, the cargo business has shown remarkable resilience and continues to move essential goods. Indeed, cargo aircraft have become a rare commodity. Governments and companies are competing for aircraft capable of delivering millions of masks, gowns, gloves, and recently vaccines. This is since a good part of the cargo transport was done in the holds of passenger planes, which are now grounded. Several airlines have adapted their offer with « ferry » planes, i.e. passenger planes whose holds are entirely filled with cargo.
Air cargo, whose revenue grew 14.9% in 2020 according to IATA, has had a positive impact on MRO activities and has reduced the drop in activity and revenue for this sector, which has been hit hard by the consequences of the passenger flight ban.
Surfeo is participating in MRO Americas Aviation Week. We will be able to discuss and deepen the subject together during this event which takes place from May 4th to 5th. Join us!
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