Global MRO industry to face staff shortages as aviation fleets grow

22 May 2017 Consultancy.uk

The global Maintenance, Repair and Operations (MRO) sector faces a combination of increased demand and a waning supply of personnel, according to new research from consulting group Oliver Wyman. The global fleet is expected to increase rapidly by 2027, while the average age of MRO technicians is far above average, resulting in a supply demand imbalance with the mid-term for the industry.

A new report from Oliver Wyman, titled ‘When Growth Out Weighs Capacity’, explores key trends and development in the maintenance, repair, and overhaul (MRO) sector of the aviation industry.

Potential aviation aftermarket disruptors

The MRO sector faces a number of challenges, according to Oliver Wyman's survey. Participants placed ‘changes in fleet plans and strategies’ as the number one issue (57% of respondents placed it within their top three) to warrant attention over the coming three years, followed by growth in OEM aftermarket presence (56%).

A labour shortage in the maintenance field was cited by 42% of respondents as a potential disruption that warranted the greatest attention, followed by ‘game-changing advancements in technology’ at 38% of respondents. The areas noted as of least concern were ‘lessors becoming more active in MRA selection’, cited by 10% of respondents, and ‘business impact from rising oil prices and interest rates’, at 16% of respondents.        

Global commercial air transport fleet forecast by aircraft type

The global aviation fleet is set to grow steadily over the coming decade, with global CAGR at 3.4%, and areas such as Asia-Pacific, seeing CAGR of 4.2%. The growing fleet – more than 10,000 planes by 2027 – is set to create considerable demand on a number of sectors, from pilots and cabin crew to steward the aeroplanes, to support and maintenance staff to keep them sky worthy.

The changes in the fleet are projected to see an increased number of vintage planes leave the global stock, with 1970s vintage set to fall to around 1,500 planes by 2027. However, the current estimates may vary considerably, with around half of respondents reconsidering the mothballing of stock – reasons cited include capacity opportunities (30%), improved economics of older aircraft (13%) given lower fuel prices, and the lack of availability of new aircraft (3%).

Forecast US commercial MRO maintenance technician demand and supply by year

A perfect storm is brewing however, with respect to MRO; the fleet size growth is coinciding with a retirement bulge, with the median age of workers in the sector standing at 51, nine years older than the median age in the rest of the economy. The consequence of the relatively older age of the workforce is that by around 2023 demand from the growing fleet will begin to outstrip waning supply, and, by 2027, the difference between supply and demand could hit 8,000 people.

US commercial MRO maintenance technician workforce by age

The sector is facing a number of challenges when it comes to attracting and training future technicians. 51% of respondents cite wages and benefits as a problem, while a lack of supply was cited as a difficulty by 71% of respondents. A further 49% cited heavy competition and the cost of housing staff near the aviation facilities. Cross-sector competition too was noted as an area of concern, with around 30% of those trained to be an aviation technician, moving into a different field.

Demand for maintenance technicians in the next three years

The consulting firm also asked respondents about their expectations for recruitment activities over the coming three years. The vast majority of respondents (64%) say that they plan to increase headcount of maintenance technicians, while around 23% say that they plan to maintain current levels of maintenance technicians – accounting for attrition from retirees. 10% of respondents will let their headcounts fall through attrition, while the remainder (4%) will do so through layoffs.

A spokesperson from the firm commented, “Given the looming labor shortage and failure to upgrade technology, Oliver Wyman sees a prospect for rising maintenance costs and an increase in turnaround times (TAT) for scheduled maintenance. In response, airlines are likely to retain more spare aircraft as a backup for potential servicing delays”

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