MROAM: Consolidation ahead for MROs, says airline exec

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Financial pressure will force significant change to come to the maintenance, repair and overhaul companies, says Jim Keenan, senior vice president of technical operations at United Airlines.

Growing financial pressure, an overabundance of MRO companies and pressure from original equipment manufacturers (OEMs) will force a consolidation of the industry and a change in the MRO business model.

"The landscape has changed dramatically since most of our MRO businesses were created, and that means we need to change with them. Ultimately, I believe that does mean fewer participants," says Keenan. "Arguing over who gets the profit can be very counter-productive."

Currently, Keenan noted, there are 45-50 repair shops for the CFM-56 engine, a very common choice of propulsion. Factoring in the demand, supply and price, however, leads to the conclusion that though capacity is limited, the number of providers and prices are unsustainable.

Additionally, OEMs are keeping a tighter grip on the intellectual property that MROs require to maintain aircraft. MRO services in the future, says Keenan, will require much closer cooperation between OEMs, airlines and MROs. "Shame on us if we take our eye off the ball, (off) all this waste and all these efficiency gains we can have if we work together," opines Keenan.