Deep capacity cuts, planes grounded for months and staff on unpaid leave: much has been made about how the coronavirus outbreak has hurt the airline industry, very often in unprecedented ways.
What is less clear is the outbreak’s impact on the aftermarket sector. With airlines grounding planes for long periods, will the MRO industry see an uptick in maintenance requests, or will the opposite hold true, with airlines tightening purse strings?
FlightGlobal reached out to several major MROs in the Asia-Pacific region. Many say that it is still relatively early days for the MRO industry, as MRO requests are usually placed in advance.
Still, the outbreak has had an indirect business impact, especially with airlines cancelling flights across their networks.
ST Engineering’s aerospace unit president Lim Serh Ghee tells FlightGlobal that the outbreak has impacted its MRO business, with the effects more profoundly felt in its airframe maintenance segment.
On whether customers will take the opportunity to send parked aircraft for maintenance, Lim says there is no uptick at the moment.
“However, we are actively pursuing jobs from customers who may wish to do so, though it is not likely as most would be in cash preservation mode,” he adds.
Hong Kong-based MRO HAECO says it has seen a “sharp drop” in line maintenance services. This was a result of airlines cutting capacity.
Chief executive of HAECO Group Frank Walschot notes that the other business areas, such as airframe services, components and engine services, have largely remained less impacted by the outbreak.
Adds Walschot: “The company has deployed Line Services workforce to support other areas of operations as well as developing and implementing continuous improvement initiatives.”
Korean Air’s maintenance division, meanwhile, notes that the actual impact from the outbreak will only be known in the next quarter, as MRO requests are usually placed in advance. The unit does work primarily for Korean Air, which has been hard hit by the outbreak, and its subsidiary Jin Air. it also counts Czech Airlines as a client.
Still, the MRO states that it estimates “a demand drop”, seeing as flight operations have been cut across the world.
FlightGlobal also reached out to Beijing-based MRO Ameco, but the company declined to comment. Indonesian MRO GMF AeroAsia has also yet to respond to queries.
Cirium’s head of consultancy Asia Joanna Lu notes that while there could be “temporary opportunities” for MROs in this time, in the longer run, the industry is not entirely shielded from the outbreak’s impact.
“If the planes are not going to fly, they don’t sell spare parts and neither is there a need for maintenance,” she says.
“I think there is no single sector that will be well-insulated from this crisis, as the crisis changes the fundamental travel demand, and the impact will probably last for a while before the…issue is fully addressed,” adds Lu.
Despite the doom and gloom that has seeped into the industry, some MROs are hopeful about potential upsides.
ST Engineering’s Lim tells FlightGlobal that the outbreak “may serve to fuel the already accelerating adoption of technologies by the industry to optimise maintenance and reduce reliance on manpower”.
The company itself already has its “Smart MRO” suite of solutions, which includes automation, analytics and robotics.
“[We have been] introducing more robotics into our work process, which we believe will make us a more attractive and value-adding MRO partner to our customers,” adds Lim.