September 23, 2013
Credit: Cardiff Aviation
The demand for British civil aftermarket work is expected to grow in the next decade, but most startups face an uphill struggle to enter a market being squeezed by OEMs.
To add to their headaches, the current shortage of skilled engineering labor is set to worsen in the next decade or two, while the trend of partnering with OEMs offers a double-edged sword: MRO providers can gain reliable work from a handful of big customers—but only while it lasts.
On the plus side, the relative weakness of the British pound in recent years has improved prospects for British MRO services, which were previously considered to be offering poorer value for the money than their Eastern European rivals in particular.
Civil MRO work in Britain is forecast to grow about 4% annually in the next 10 years, driven largely by air transport demand, according to Aerospace, Defense and Security (ADS), the sector's national trade body.
At the same time, ADS is encouraging British MRO companies to look outside their comfort zone and exploit growing demand for expertise and technology transfer in Brazil, China, Kuwait, Malaysia, Qatar, Russia and the United Arab Emirates.
Jeegar Kakkad, chief economist and director of policy at ADS, says that “it's not as if a British company is giving away the crown jewels by working with a foreign country.” Once a relationship has been established with an overseas company, “what they quite often want is to maintain a partnership and do a bit of a workshare,” he notes.
According to the British trade body, U.K. Trade and Investment (UKTI), domestic MRO providers face stiff competition abroad due to the increasing strength of component manufacturers, while airframe makers such as Airbus, Boeing and Embraer “are a growing competitor as they seek to capture a greater share of the value that their aircraft generate after production.”