Has New Technology Improved Airframe MRO Profitability?

The public face of the aviation industry which manifests itself through ever busier airports and skies (outside of the current pandemic situation of course), is supported by an invisible army of tiered OEMs, airframe and component MROs, aftermarket support organisations and many other industry sub sectors that help facilitate the ultimate goal of producing an aircraft ready for operational service. It is the airframe MROs that are the focus of this particular commentary.

I have had the pleasure of working for a number of airframe heavy maintenance MROs over the years, both airline affiliated and independent MROs, and one factor was evident with all of them; they were not particularly profitable. Looking back over the last two or three decades, If I had asked an audience of airframe MRO CFOs to raise their hand if they were making a “respectable” profit, I wouldn’t have expected to see too many hands up. But has that situation changed as a result of advances in technology that have been adopted in the airframe MRO arena?

If you take a step back for a moment for a macro level overview of the aviation industry, you will observe a wide range of typical operational profit margins, from those operating at relatively low margins of around 10%, to those operating at much higher margins of around 70%+. The economic drivers for these levels of return are fairly simple to understand, including factors such as operational efficiency, levels of competition, levels of demand, high or low value product or service etc. I have encountered many individuals not familiar with the industry, that have been incredulous at the fact that they can pay significantly higher manhour rates at their local automotive dealer than at an airframe MRO.

Airframe MRO has always generally been at the lower end of profitability, although there are some exceptions to this generalisation. Competition is high, as there are many service providers vying for the maintenance of a finite number of aircraft, and although that number has been steadily growing over the years, there has been a concerted drive by airlines to reduce maintenance related costs. This objective has included efforts to optimise maintenance schedules which have seen both a decrease in base and line check frequencies, and a move away from traditional preventive maintenance measures to a more predictive maintenance approach, supported by new health monitoring technologies and data analytics.

Taking aircraft structure as an example, traditionally aircraft structures have been designed using the damage tolerance concept which takes into account the ability of the structure to bear calculated loads in the presence of certain damage, until such damage is discovered by way of scheduled inspection and then repaired. The risk due to fatigue cracks in fuselage and structure in general has been known about for many years, and attention was focussed on this with instances such as several Comet aircraft incidents amongst others. Some will remember the Aloha Airlines B737 incident in 1988 when a top skin effectively peeled off in flight due to multiple-site fatigue cracking which caused the failure of the lap joint. A number of images circulated the industry of a B737 with a giant circlip around the fuselage after this incident. The point here is that a greater awareness of issues such as these has resulted in a combination of maintenance schedules, ADs, SBs etc which seek to ensure that all such damage risks are detected early enough for a combination of monitoring and timely repair which keeps aircraft damage and associated maintenance costs to a minimum.

In recent years, many airlines have benefited from the use of AI in engine health monitoring; again with the objective of improving reliability and reducing maintenance costs. 

Clearly there has been an unsurprising drive by airlines in recent years to reduce operational and maintenance related costs, which naturally has impacted the global revenue share for airframe MROs, as well as all the other supporting industry sub sectors of course.

Changes discussed so far have focussed on the drive for maintenance cost savings instigated by airlines, but technology advances and changes in working practices have also allowed airframe MROs to reduce their own costs, and improve their efficiency which ultimately impacts their profitability.

Aircraft maintenance is overwhelmingly human dependent in that it predominantly requires an engineer to inspect, monitor and repair as required. This is changing to a degree with the limited introduction of robotics to aircraft maintenance. Whilst not appropriate for all applications, any reduction in the costs of providing skilled labour by substituting robotic technology, is considered to be worth entertaining, whether this is for labour intensive work or work that could pose a safety threat for a human worker.

Robotics can be applied to various functions, from single parts repairs and carbon fibre machining, to much more detailed inspection tasks through miniaturization, where robots can be used to carry out inspections in areas of the aircraft that otherwise would be difficult for a human engineer to access, either physically or from a safety perspective.

Perhaps one of the most well known concepts of applying robotics to aircraft maintenance is the Rolls Royce “swarm” robots concept which refers to 1cm long robots which would be delivered to the centre of an engine using a “snake” robot. These miniature robots would then proceed to crawl through the engine carrying small cameras that provide a video signal back to the operator. This process would allow a timely detailed inspection of the engine to be carried out, without having to remove it from the aircraft. There are even plans to develop this concept further to design miniature robots that could remove and replace unserviceable components.

Drones have become more of a hot topic, whether it be the security risk they pose around airports, or whether it be as a means of effecting door to door deliveries of anything from Amazon goods to a take-away meal. It is a fact however, that drones can and already have been used in the field of aircraft maintenance in order to provide a means of carrying out airframe inspections of areas difficult to access without docking, or at least a cherry picker.

I am a great admirer of the innovative and professional MRO support that the easyJet engineering team provides for the easyJet fleet, and I remember back in 2015 when they carried out a trial drone inspection of an A320 using a quadcopter that was developed jointly by Blue Bear Systems Research and Createc. The drone was used to fly around the aircraft maintaining a distance of 1 metre using a combination of smart navigation technology and computer vision. Over time, this drone based inspection technique has been developed and adopted by others such as ST Engineering, American Airlines and AAR amongst others. 3D scanning of fuselages for hail damage has also been carried out by Air France Industries and KLM Engineering & Maintenance. This process has been proven to take less than an hour for a B777 compared to manual scanning which might take up to five hours.

Additive manufacturing which refers to the use of CAD software or 3D object scanners to produce 3D printed objects, is used by many of the larger MRO providers in areas such as cabin components, but undoubtedly this will progress to other areas in due time. Companies such as Lufthansa Technik and Air France Industries KLM Engineering and Maintenance are working on metal printing, so that this technology can be applied to a wider range of components. As a future means of reducing costs for MROs, additive manufacturing will provide the ability to print a growing range of replacement parts that are not only strong and durable, but crucially, inexpensive and thereby reducing inventory costs for MROs.

There are a number of ideas as to how blockchain could benefit the aviation industry in general, and specifically MRO. Much maintenance is reactive, conducted after a problem is discovered. Many believe that if engineers had access to the configuration and history of every aircraft in a fleet on a blockchain register, that it would facilitate predictive maintenance and potentially capture issues before they become a maintenance problem. The ability to predict the cost of specific aircraft maintenance could also allow a more accurate reduced fixed price maintenance scenario, and thereby provide an MRO with the capability to offer predictive maintenance services using blockchain enabled data, with a competitive advantage. There are other potential advantages too, such as providing a real time snapshot of aircraft records and condition throughout its life, and facilitating visibility of component traceability. 

As a labour intensive activity, airframe MRO relies on a team of engineers that have to be trained both initially and on an ongoing basis. This is an area where Virtual Reality and Augmented Reality is making a difference by allowing trainees to collaborate and engage around a scaled 3D model of an aircraft and its components and systems which can be opened up and explored in a virtual sense. This practice is both time and cost saving, and is an effective and efficient way to conduct training, which will undoubtedly grow in popularity. An example of this is a B737 virtual reality training system which was developed by Inclusion, and is used by FL Technics. It is a remarkable system which allows trainees to enact maintenance tasks and be faced with all sorts of challenges along the way, all without risk to a real aircraft if mistakes are made. Such a system can greatly reduce training time and costs.

Integration of voice control technology with aircraft maintenance and production control software is a further example of technology which can reduce maintenance task times and improve efficiency and accuracy of data. Honeywell’s Vocollect solution is a perfect example of this. I first encountered Vocollect several years ago when it first came to market, and I was very impressed by it. Whether base or line maintenance, use of a headset and microphone with the appropriate connectivity means that task details are relayed to the engineer as required, and spoken inspection results are recorded instantly and accurately. Once you look at interfacing this instant data with supply systems etc, you can be looking at instantly provisioning required spares etc and the efficiencies continue to mount up. Of course this technology can also be applied at component level for example for workshop engine and landing gear maintenance.

This brief look at technology developments that may be of benefit to the airframe MRO industry has not been exhaustive by any means, but it is clear that this is a time of great change for the industry, with many new disruptive technologies either already available or in development. Although prevailing wisdom may dictate that adopting every new technology available will automatically reap both operational and financial benefits, it will be a challenge to identify which will be of benefit in any given MRO scenario, and the question of how best to evaluate potential investment returns will be one faced by many. Factors to consider include labour efficiency, process flow, accuracy of data, quality of task completion, material cost savings, decision making improvements and personnel safety.

At face value it would certainly seem that the myriad of new technologies that may be applied to conventional airframe MRO working practices may indeed reduce operational costs, increase efficiency, and provide that much sought after increased operating profit margin for those organisations that work on their competitive advantage in the market by adopting technologies appropriate to their operating conditions and environment.

Doubtless there will be consolidation in the industry as some MRO organisations are unable to keep pace with the changes, whilst others position themselves strategically for the direction in which they perceive the market to be moving; for example electric powered airframes are likely the future of powered flight, and the MRO industry must be able to support this appropriately.

In conclusion, the airframe MRO sector will likely remain highly competitive, with pressure on market pricing exerting that pervasive downward pressure on profit margins, but those organisations that selectively embrace the new technology advancements that are currently and soon to be available, will likely be the most profitable operations.