“In comparison to North America and Europe, the Asian aviation industry lags considerably in terms of traffic, trade and unity, primarily due to the difference in governmental policies across various countries in the Asian sector,” comments Frost & Sullivan Research Analyst Donald Ivan. “However, when compared to growth in other continents, Asia reflects incredible growth of close to 20 per cent on a yearly basis, creating a platform for the Asian airline industry to catch up with its counterparts across the world.”
Soaring demand for air travel in Asia is encouraging airlines to increase the number of services not only across regions, but also across continents. In order to leverage this demand, airlines are pushing their fleet to optimum usage. As the demand for air travel has to be met through increased services, engines are being put to maximum task.
“The output in returns will be immense as these engines are subject to maximum utilisation,” notes Ivan. “The time period of service is minimized as the engines will come for repairs and services much in advance than the stipulated time, a factor that will evolve into a driver for the engine market.”
However, engine service centers require high financial investments and technically skilled labour resources. As new aircraft are being deployed to cater to the demand for air travel, it will take a minimum of one year for the first engine to come in for heavy maintenance. Until then, the returns through general service and maintenance will be at a bare minimum and so the break-even period will have to be extended further.
Another challenging aspect is the delay in the manufacturing process that forces companies to postpone their delivery schedules to clients. This factor is presently experienced by many airlines that have placed new orders. This can further delay the return on investment and increase the reluctance of service providers to proceed with their expansion plans.
“Total Support and OnSupport are major strategies being followed by market leaders like Rolls Royce and General Electric,” observes Ivan. “This is a way to keep customers within reach so that they realise the benefits of returning to the OEM for the services that have been promised by the engine manufacturers.”
This strategy will hinder independent MROs or engine service centres aiming to initially grab a share of this lucrative market. Independent MROs have to compete with OEMs who can leverage their brand name and competencies in order to capture any business outside the contractual business.
“The only solution is to strategically analyse the present scenario with regard to infrastructure and resources and work towards building up a brand name that does not focus solely on engine overhaul and services, but considers MRO as a complete product portfolio of services,” advises Ivan. “If brand positioning meets cost, quality and turnaround time parameters determined by customers, then India and China stand poised to emerge as global leaders of MRO services and activities.”
