Oliver Wyman Sees 30% Hit to MRO Demand

After publishing its robust maintenance, repair and overhaul market outlook through 2030 in February, ARSA and Oliver Wyman have revised its forecast for MRO activity suggesting the current trajectory for fleet reductions and lower aircraft utilization would reduce global MRO demand in 2020 by over $26 billion, or almost 30%. North America and Western Europe would suffer the largest impact.
 
Past crises are informing the reduction-in-demand outlook for MROs with independent MROs at most risk.
 
In the meantime, health officials in partnership with companies are beginning to prepare for back-to-work programs that protect workers while resuming maintenance or production of aircraft. AvWeek has scheduled a podcast with AAR on its return-to-work plans.
 
While plans remain in flux, back to work could mean daily temperature readings before entering the shop floor, donning personal protective equipment, social distancing and robust cleaning of frequently touched surfaces, according to guidance issued by CDC for aircraft maintenance workers.
 
The CARES Act, as well as agreements between airlines and unions mean no layoffs for the present, according to AvWeek. Their work, however, will include maintaining aircraft ready for flight and supporting airlines as they shift to cargo operations and shift fleets to ensure continued airworthiness, which presents opportunities for MROs. Concerns have been raised about the contract maintenance workforce and ways are sought to minimize the disruption on the workforce, according to Launch Technical Workforce Solutions.
 
The industry is seeking further government help but, with Congress in recess, another rapid, short-term fix seems unlikely until mid-May at the earliest. In addition, industry is wondering whether the epidemic will kick-start automation in aircraft production as well as maintenance, repair and overhaul.
 
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