It may be obvious that rising oil prices are bad news for airlines, but it is also a major concern for MRO providers -- and not just because financially struggling airlines make lousy MRO customers.
Elyse Moody, who travelled to Dubai for Aviation Week’s MRO Middle East conference in early February, highlights the problem in an in-depth report in this week's Aviation Week & Space Technology magazine.
In recent days, the situation has become even more serious because oil prices have increased even beyond the level they were when Elyse finished her reporting for the “Oil Price Spike Highlights Aftermarket Pressures” article. At the time, the price of oil hit $100 per barrel for the first time since 2008.
Today’s headlines paint an even grimmer picture as the violence continues to escalate in Libya, forcing some international firms to repatriate staff from the country. Oil prices surged to $107.27 in trading on Tuesday morning.
While Libya is only a medium-sized player in oil production (about 2% of global output), traders are growing increasingly concerned about the spread of unrest to other Middle East countries, sending oil prices to record levels.
As Elyse points out, this surge in fuel costs gives new urgency to the issues facing the aftermarket, particularly as operators focus more and more on lean outsourcing strategies.
You can find Elyse’s full report here.