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The aviation industry, known for its rapid pace of innovation, is facing unprecedented challenges in the post-COVID-19 era. One of the most significant hurdles has been the disruption of supply chains, which has had a profound impact on maintenance, repair and overhaul (MRO) facilities. As airlines grounded fleets and demand fell, MROs struggled with shortages of critical components and lengthy shipping delays. When demand rebounded and getting aircraft back in the air became a priority, this compounded the supply chain issues. MROs and original equipment manufacturers (OEMs) are taking a variety of measures to meet turnaround times as they strive to maintain their competitive advantage.
Operational and logistical challenges
The COVID-19 impact
The pandemic dealt a severe blow to the aviation sector, leading to a sharp decline in air travel and the grounding of the global fleet. This, in turn, reduced the demand for MRO services. While the industry has gradually recovered, the lingering effects of the pandemic continue to strain supply chains. The war in Ukraine has further exacerbated these challenges, with sanctions on Russia driving up fuel prices and further disrupting global trade. Some in the MRO sector now view this post-pandemic landscape as the “new normal,” as there have always been inherent delays.
The parts shortage crisis
The lack of spare parts has emerged as a major bottleneck for MRO facilities. The shortage of critical components, including engines and landing gears, has led to significant delays in aircraft maintenance and repairs. This issue is compounded by a reduced talent pool, due to job losses during the pandemic.
To mitigate these challenges, MROs are seeking alternative suppliers, investing in inventory management systems and exploring innovative procurement strategies.
Aircraft suppliers specializing in components are strategically purchasing older aircraft for teardown operations to secure vital components and permit flexibility as they build back their inventory.
In addition to shortages, MRO facilities are also facing a significant increase in the cost of aircraft/engine parts. Factors contributing to this rise include increased demand, supply chain disruptions and rising raw material prices. To manage these rising costs, MROs are implementing various strategies:
- Cost-effective repairs: MROs are focusing on repairing and overhauling parts instead of replacements whenever possible.
- Inventory optimization: MROs are carefully managing inventory levels and using advanced forecasting techniques to maintain optimal levels.
- Supplier negotiations: MROs are actively negotiating with suppliers to secure better pricing and terms.
- Pricing transparency with customers: MROs are increasing their transparency regarding pricing to build trust with their customers.
The Aviation Supply Chain Integrity Coalition was formed to address these ongoing challenges by eight MRO and OEM global industry leaders, namely Airbus, American Airlines, Boeing, Delta Air Lines, GE Aerospace, Safran, StandardAero and United Airlines. This coalition has put forward 13 performance-based, technology-agnostic recommendations aimed at strengthening the supply chain and excluding unapproved parts from the market. This is paving the way in recovery and is a vital step toward building resilience in the aviation supply chain.
Blockchain and other digital tools – to pave the way forward?
Blockchain technology offers a promising solution to the challenges facing the MRO industry. By providing enhanced transparency, traceability and streamlined processes, blockchain can improve supply chain efficiency and resilience. MROs are already using digital tools to improve inventory management and predict detailed timelines for spare parts. This allows them to help identify potential shortages early on, reduce the risk of counterfeit parts and automate various procurement tasks.
MROs are also implementing systems such as 3D printing to assist in the manufacturing of various engine components. These systems can help predict production timelines, reduce waste and improve efficiency.
At the MRO Asia-Pacific 2024 conference, it was predicted that by 2030, 72% of all MRO operations will incorporate blockchain or other artificial intelligence tools into their processes.
Conclusion
The disruption of the supply chain has posed significant obstacles for MRO facilities, but the outlook remains hopeful. Airbus’s Global Services Forecast published for 2024-2043 predicts that supply chain issues will stabilize in the next 24 to 36 months. By embracing digitalization, exploring innovative technologies like blockchain, and fostering collaboration among industry stakeholders, MROs can not only overcome these hurdles but also position themselves for long-term growth and sustainability.