The global aircraft fleet is expected to reach nearly 38,000 by 2028. With this expansion, the aircraft maintenance, repair and overhaul (MRO) industry will expand to a consolidated market value of US$ 115 billion dollars.

But one question that persists throughout the industry is: does outsourcing maintenance really benefit airlines?

This article explores the pros of subcontracting maintenance, and how this can be advantageous to both full service and low-cost airlines.

What is MRO?

MRO refers to maintenance services that include the rebuilding, alteration and inspection of aircraft. It also includes the supply of spare parts, accessories, raw materials and manufacturing consumables.

Undergoing such forms of maintenance is an essential requirement to ensure that aircraft are maintained in prescribed conditions of airworthiness to safely transport passengers and cargo. It also aims at enhancing operational efficiency and on-time performance.

Why outsource?

Source: Dviation Group

Before the deregulation, most airlines conducted their maintenance in-house. However, post-deregulation,  because of fierce competition – outsourcing aircraft maintenance has been viable and attractive option to many airlines. A dedicated MRO facility is attractive to many airlines because they could now focus on what they do best, i.e. flying passengers from point A to point B, comfortably, reliably and efficiently. More often than not, these MROs could even provide a cheaper option due to the economics of scale and also the acquired skills and know-how which they have institutionalized over the years. Over 60% of spending on MRO is attributed to heavy airframe maintenance checks (C and D checks). Engine, component, and line maintenance can also be outsourced to independent MROs. The outsourcing of maintenance can range from partial, to fully outsourced.

How is outsourcing beneficial?

Source: Dviation Group

1. Outsourcing relieves airlines from labour costs associated with maintenance, which can amount to a large sum. Through this, airlines can effectively reduce the number of in-house and long-term contracted technicians and Licensed Aircraft Engineers (LAEs).
2. When maintenance is carried out in-house, airlines may have hangars and workshops in limited locations. However, when they outsource, they may have access to more facilities in various parts of the world, from different maintenance organizations. Not only does this save time and boost efficiency, it could also lead to fuel cost savings.
3. Third-party maintenance can remove an airline’s burden of training costs, and the purchase of specialist equipment. This is especially useful for smaller, and low-cost airlines.
4. With a larger range of capabilities and capacities, maintenance organizations can provide in-depth expertise and specialised skills, which may not be easily achieved by an airline (as their main operational focus is not only on maintenance). Through this, airlines can receive high-quality and professional service, as well as improve on-time performance. The specialist abilities of maintenance organizations can often create high punctuality, and thus, reduced turnaround times.
5. Fixed costs, such as costs to set up hangars for in-house maintenance, and other variable costs are no longer necessary if maintenance is performed by a third party. This can bring about immense cost savings for airlines.
6. Aircraft require more costly checks as they age. Added to that, the cost of in-house heavy maintenance checks increase faster than if maintenance is outsourced. Hence, outsourcing can be a very strategic solution for airlines with older fleet.

If you’re interested in joining an independent maintenance organization, visit www.dviation.com for details on career opportunities, and training! Or if you’re looking to outsource your airline’s maintenance, go to www.dviation.com/maintenance.