Still, MROs are far from doomed. Current strategies and fleet types can sustain many MROs over the medium term, and some MROs maintain strong and sustainable niches.
Plus, encouragingly, airlines want a more robust maintenance market that includes MROs in a meaningful way. According to our survey, most airlines would welcome competition from MROs for long-term maintenance services when aircraft are purchased.
To thrive rather than survive, MROs must find a way around OEMs and into these sourcing campaigns. MROs must seek partners who can inject them into the selection process. Two candidates are aircraft lessors and airframe manufacturers.
Aircraft lessors work with many operators at the point of aircraft acquisition. MROs could serve carriers in need of bundled services and owners keen to ensure capable stewardship of their asset through its lifecycle.
According to our companion survey of the aviation finance market, many lessors would support this strategy. Of lessor respondents, 70% indicate they already advise airlines on maintenance contracting matters. And a significant majority of our respondents also favor pairing MRO services with lease agreements for commercial (63%) and asset marketability (100%) reasons.
MROs should also consider partnerships with airframe manufacturers to gain access to the aircraft selection process. These players continue to develop their own aftermarket service offerings, but with less success than their engine and component counterparts.
There are clear challenges ahead for engine and component MROs. Seeking powerful allies, defining ways to serve unmet needs, and developing innovative business designs to combat OEM dominance are critical to long-term viability.
The authors may be reached at: Christopher.Spafford@OliverWyman.com and Darryl.Rose@OliverWyman.com.
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