To the extent practical, in northern hemisphere markets summer is for flying, and fall is for maintenance. But locking in those fall slots now may be a wise move.
It increasingly looks like maintenance prices are headed for increases in fall, mostly due to the supply-demand balance, when jets finish their heavy summer flying duties. “MRO capacity for airframe maintenance is tight except for summer, when we continue to see the seasonal nature of scheduling on the part of a lot of airlines,” summarizes Troy Jonas, vice president for global sales and marketing at AAR. “They want to fly during the summer and then come back for heavy maintenance in the fall.”
Apart from long-term and seasonal trends, specific events still count in maintenance markets. “There’s some short-term activity right now around wide-bodies that we’ve seen that’s related to finding alternate lift for 787s that have been affected by the Trent 1000 engine issue,” Jonas says.
Overall, 2018’s high demand for airframe work is not confined to the U.S. or North American market. “There’s high demand for airframe and engine maintenance on a worldwide scale,” Jonas notes.
Aircraft part prices have been fairly stable, at least for list prices on new parts, according to official U.S. data. The producer price index for civilian engine parts rose only 1% in the year to May 2018. Non-engine parts were actually down slightly over the same period, except for landing gear prices, which rose 5%.
But Jonas exec believes tight capacity will certainly mean higher pricing is ahead, just not due to insufficient facilities. “It will be driven by the necessity to pay higher technician wages.”
The other change prompted by tight shop capacity will be a familiar one. “We’re seeing a lot more interest in longer-term contracts than in the past, for instance, ten years versus three to five years,” Jonas says. Operators that enter into longer-term contacts will have more protection against a potential shortage of shop capacity in the future.
Courtesy Of: Henry Canaday at the MRO Network