Does Covid-19 Attacks or Heals MRO market?

Last updated on October 7, 2020

Coronavirus has shown in China at the end of 2019th and reduced its air traffic by 5% in the first month. Two months later it aggressively attacked Europe and at first closed Italy, after that Spain and France and the rest of Europe. At the beginning of March, the USA stopped most of its overseas flights headed to Europe. All of this strongly affected the aviation industry. It means the MRO industry got a big strike but it’s still unclear is it positive or negative.

What is the impact of Covid-19 on MRO?

At first, many companies were found surprised by these acts of government, so everyone was afraid of what is going to happen next. After a week from traffic breakdown, it was clear that airliners are not going to fly for a while, it’s suspected that this can last up to 2 months.

For Line maintenance, this is a terrible situation as that won’t have any work for a long time. As of mid-March Europe traffic is decreased by 70%, which affects the Line maintenance market for almost the same stake. The advantage in this situation will be prolonged parking as many airliners are going to leave part of their fleet aside. It’s going to be hard to recognize the exact moment for making this decision but it is a perfect time for sending stuff to vacations and making them ready for summer turbulating sessions that are ahead.

Otherwise, this is great news for base maintenance facilities as airliners will give their aircraft that are near to big checks for heavy maintenance. That doesn’t mean everyone is going to make a profit of this as half of the hangars are closed or work with a reduced number of staff due to the Covid-19 pandemic. Less affected countries will continue working as before and their MRO centers can take this advantage to make an extra profit this session and get new customers which are forced to find another place for their base maintenance check.

Coronavirus is changing the schedule of maintenance from day to day

This unexpected situation found many by surprise and made all well-planned schedules unreliable. Half of the aircrafts that are already on their maintenance check are stuck because hangars are closed. Nobody knows how long will it take to continue works or to start checks that were planned for next month in those facilities. At this moment all airliners are focusing to find their place in still functioning MROs for planes that should perform their checks or cabin modification/reconfiguration before summer session.

Already full hangars in east Europe are taking their advantage and making new contracts to fulfill the needs of the market at this very moment. Even in those countries, governments are fighting with novel coronavirus, but their productions are still working as an impact of Covid-19 is far lower than in western European countries. This is good news for airlines that are looking to step up with their schedules and to be prepared for the upcoming summer session. As well, we can see a slight rise in cargo traffic frequency, and its a bit of release for this moment as those aircraft are going to postpone their checks as much as possible.

Covid-19 destroyed manpower market

Over 50 countries have closed their borders to foreigners and this might be a problem for MROs with a big number of contractors or for those whos work amount is getting bigger than planned. Lack of manpower is already hitting hard on this industry and of this moment help from recruitment agencies is disabled as most of the contractors are not able to travel between countries and provide support where needed.

Companies reduced the number of manpower in hangars in most countries in Europe due to pandemic regulations and suggestions by its country governments. The first step taken was sending their contractors home, after that they gave an opportunity for working from home to everyone with that possibility and in the end, in most affected countries hangars are closed or working at minimum capacities.

Recruitment agencies reduced their capacities by 80% in the first two weeks.

Is novel coronavirus making difficulties for Logistics?

Logistic is one of the crucial parts in aircraft maintenance and now comes a question is Covid-19 making difficulties to it. For now, all Logistic processes are working without changes. There are some problems with the transportation of goods through country borders and customs as processes are far more strict and it takes up to 300% more time to deliver goods to the final destination. As well, many usual plane connections are canceled because of passenger traffic reduction. All logistic centers are working 24h to keep everything in the right order and maintain difficulties at the lowest level.

Parts and materials production companies in the areas with the highest impact of coronavirus have adjusted their production processes so they can fulfill market needs at the moment. They are assuring us that there won’t be any negative surprises and that they prepared a strategy to pass all struggles with minimum troubles. Many of them said as well that current stocks are more than enough to supply their customers and that they will inform everyone about any changes in ordering processes.

How all this is going to reflect the summer session?

At the beginning of July, we expect to see a recovery of aviation and returning to normal processes. There are also some predictions that this summer will be more profitable than last year. It’s expected that Boeing 737MAX recertification will take it’s placed during summer as well. All this gives hope that maintenance centers will have a more intense end of summer and that most of them will have higher capacity utilization. Globally many industries in aviation have huge losses due to the Covid-19 impact, but the MRO industry might take advantage of it and make extra profit. We predict higher maintenance actions in the period of virus incubation and this will raise a number of heavy maintenance checks and additional works.