Addendum
Global airline job cuts could hit 70%
September 1st 2020
Leading aviation data and advisory company, IBA, has revised downward its forecast of US$90 billion for the global MRO industry in 2020 by more than 50%. Read More » IBA president, Phil Seymour, said last month the MRO industry needs to take a more creative approach to maintenance solutions.
“That includes OEMs (Original Equipment Manufacturers) and regulators devising safe and flexible ways to prevent aircraft having to undergo such extensive and expensive checks, so savings can be made when cash preservation is vital, but be implemented without compromising safety,” IBA said.
“We expect the market to rebound by the start of 2022, but we also expect high levels of redundancies – from 35% to 70% - in the interim, so a flexible approach from the MRO industry will be crucial to working through future uncertainty.”
In its Changing Landscape of the Aftermarket Industry Webinar, IBA identified 800 aircraft it expected to exit airline fleets in the short term with around 450 faced with permanent retirement. Around half of expected retirements are aircraft aged older than 20 years. Younger retirements will include the A380, A340-600 and 777-200LR, the consultancy said.
IBA predicted engine shop visit demand will collapse for the next two to three years as both utilisation and maintenance expenditure experience massive reductions. Later stage shop visits on mature engines are most vulnerable but all engines are seeing significant maintenance offsetting. Some will never now occur but IBA expects many will and could lead to a new ‘Bow Wave’ of concurrent shop visits in the mid-2020s.
It adds revisions to MRO spend will be made in the long-term, although at present narrow-body aircraft utilisation is increasing whilst the wide-body fleet is lagging behind.
Early retirement is set to disrupt the supply chain due to the increase it will drive in aircraft part outs until saturation occurs, along with reduced engine shop visits as a result of low utilisation rates. See Asia-Pacific airline MRO heads for 40% collapse. Page 19.
