“There was always talk of the labor shortage in the MRO market of ‘Mr. Right Skills,’ a shortage so bad that we’d be grounding planes,” said David Stewart, a partner in forecasting group AeroStrategy. “First of all, we never grounded planes, so somehow our industry coped with the shortage. Second, we’re now into recession so it’s less of an issue.
“There are some MROs, like SR Technics, that have laid people off in Ireland, or Sabena Technics in Brussels,” said Stewart, who also chairs the maintenance, repair and overhaul & logistics group of the Society of British Aerospace Companies (SBAC).
Yet MRO and completions specialists such as Lufthansa Technik in Hamburg (LHT), Air France Industries (AFI) and emerging entrants such as AMAC Aerospace in Basel, Switzerland, are recruiting aggressively, even without a firm count of heads in the MRO workforce. “I’ve not seen statistics that say we have this many technicians and this is the gap as to how many we need,” said Stewart, partly since an unknown number of mechanics may work under the licensed technician who signs off on work.
Backlogs for the B2 avionics license in the UK may mean that fewer skilled techs can fill demand, though with the downturn, maybe not. And with consolidation and the global reach of MRO suppliers, total labor may stay constant but shift to growing clients, such as Emirates Airline.
“The thing that drives the aircraft MRO spend is fleet utilization, how hard the aircraft are flying,” said Stewart. “It looks like capacity is going to reduce 4 to 5 percent in 2009, so they’re doing things like burning off the inventory. With an MRO [budget] declining on a global basis, you either reduce MRO productivity by that percentage or you lay people off.”
Stewart’s colleague at AeroStrategy, Jonas Murby, said that last year’s fuel-pricing crisis and recession caused the MRO market to contract by 8 percent, and he predicted that beginning this year, MRO would lose the equivalent of three years of previously forecast growth. Murby foresees “severe airline losses,” with a dip in the global gross domestic product by 1.8 percent–despite the relative short-term health early this year of the U.S. airlines, which, after cutting their available seat miles, found fuel prices dipping in their favor. Accordingly, he has lopped $9 billion off AeroStrategy’s earlier forecasts for growth in annual MRO spending through 2018.
Yet MRO suppliers say they’ve learned a lesson from the lull in 2001, when recruiting all but stopped, causing a scramble for skills in the boom of 2002 through early 2008. Demand for MRO has eased to what Stewart and SBAC called a “bookend” to this peak, leaving “a cushion with which to weather the storm.” Despite threatening skies, MRO firms such as LHT have stepped up recruitment, looking ahead five years or longer to meet licensing regulations, and assessing the yet unmeasured needs for new-generation aircraft such as composites work.
Attracting New Talent
The SBAC estimates that 2 percent of total aerospace MRO labor is in the apprentice stage. Anja Reichardt, who acts as LHT’s manager of personnel marketing and recruiting, reported a higher percentage of apprentices for LHT with some 800–aged 16 to 20–in its pipeline. Her colleague Christoph Meyerrose, managing director of Lufthansa Technical Training, said a new maintenance line for the A320 takes up to 150 personnel. And even in the greater Hamburg area, with Airbus on one side of the River Elbe and LHT on the other, employing 30,000 in aviation, it’s a challenge to hire MRO staff with complete skills.
The scarcity means that MRO firms have added emphasis on retention in order to lower the training costs of turnover, partly by seeding new maintenance lines with experienced staff from regions of declining demand. Veterans help instill a company culture in local-hires at such new LHT maintenance facilities as Sofia, Bulgaria. Meyerrose looks to graduating technical students and increasingly to retraining of labor from industries in stress, such as automotive and shipbuilding. He and Reichardt review annual student surveys to gauge the appeal of aviation maintenance relative to automotive engineering.
“We are in an interesting stage now in aviation,” said Reichardt. “There are mergers and bankruptcies in a space of a few months when normally these take place over years, and this is jeopardizing the attractiveness from the job-security point of view. But the new programs, such as the Dreamliner, are putting so much interest on the aviation field that there will be just as much interest in getting on board with aviation,” she concluded.
“Historically, the MRO industry was more glamorous,” said Stewart. “We’re in a downturn as much as automotive. How much of that perceived shortage actually exists?” Stewart predicted that, in a decade, MRO employment will be more broadly distributed as airframe maintenance migrates to Asia, though engine work may still concentrate in Europe with strong players such as Rolls-Royce.
“One of the challenges for MRO in recruiting someone out of university, is that a new-hire can go to an office and work on a computer from 9 to 5, or go into an airline as an apprentice and work in the freezing night on a shift system,” said Stewart. “You don’t know what schedule you’ll be on. Aviation needs to compete.”
“We put a lot of effort in our branding,” said Reichardt, “to make aviation sexier.”
She said that LHT’s rank on surveys of engineering students has continuously risen, and the company is luring talent from what it considers its arch rival for technical skill–automaker BMW. Reichardt plants a message for potential hires ranging from age seven to 60, beginning with poster campaigns and visits of MRO staff to elementary schools; LHT carries in a mock tool box to explain fundamental tasks on a maintenance line. The company partners with universities at Damstadt and Berlin to ensure a supply chain of talent, and its executives serve as guest speakers at engineering classes.
Some MRO executives say that while new European regulations make technical skills more uniform and verifiable in the UK and European market, the advantage of the U.S. market, despite a fluctuating dollar, is a relatively uniform proficiency in English. In competing labor fields, only the executive staff or those who interact with clients may need proficiency in English, while in aviation, language skill is vital at all levels for its manuals, software, training and a uniform communication with clients.
In plain English, though, airline customers are delaying MRO spending in the short term, using what Murby calls maintenance buffers. The first of these is burning off the inventory of spares, while in other cases some airlines can defer maintenance needs not required by regulation. Other carriers might cannibalize the portion of their fleet that is grounded. He and Stewart said that airlines may reduce the scope of work to limit projects to what is required for safety and security, rather than what is nice to have.
“For the completions outlook, the problem is that it’s a discretionary expenditure,” added Stewart. “So when times are tight, it drops off, but for other aspects of MRO, the plane still has to be maintained.”