Maintenance service providers (MROs) are busy to serve airlines to check and provide low-cost care for grounded aircraft. Good care does not mean parking aircraft inside the hangar.
In fact, it is not possible to park every aircraft inside the hangar. Therefore, MROs shall establish a system to recommend tailored maintenance activities based on the weather conditions of the aircraft’s locations. To have well-cared aircraft, airlines should also evaluate MRO’s recommendations and adapt their maintenance program during these specific days. In this context, Boeing can be a good example since they handle the grounded MAX fleet more than 1 year. Besides the airlines, MROs should take actions to raise additional maintenance activities by considering;
- Weather conditions of the location
- MRO capabilities
- Skills of MRO to manufacture tools and equipment
In line to service quality improvements mentioned above, MROs should review their cost structure to get minimum damage on the unprecedented times. Cost structure revision, which main review areas are cost calculation parameters, material coordination including stock level determinations and logistics, and finally customer satisfaction, is vital to estimate next years’ costs.
Cost calculation parameters are considerably changed due to covid-19 pandemic. For example, direct and indirect labor costs and other impact costs such as energy prices should be recalculated. On the other hand, government supports and compensations, unpaid vacations should be included into the man-hour cost calculation. This complex calculation will lead MROs to understand real effect of the crisis on the cost structure where the cost effect might be reflected to the prices. Another important factor on cost structure is productivity and efficiency of the provided man-hour for upcoming maintenance activities. For example, parking an aircraft instead of performing maintenance results inefficient usage of man-power. There are also some other factors that may affect cost parameters due to MRO structure. Cost calculation parameters should be rewritten and evaluated for the current situation.
On the other hand, material coordination has considerable effect on cost structure. During standard operations, supplying the material as AOG basis is normal, but in these circumstances, it is found unnecessary. Before giving such a general decision, material requirement should be controlled with man-hour planning and flexibility of the MRO on man-hour planning. Even the maintenance will take longer than expected, additional costs to supply material on AOG basis may be lower than loss of efficiency in hangar floor. Moreover, stock levels are also predefined and automated systems for most of the MROs. We should keep in mind that stock levels are defined based on experienced data, but in near future, we will not work as in the past. Instead of procurement suspension, procurement specialists should make a detailed analyses of procurement decision. Additionally, since the material prices are changing at the market, professionals will find opportunities to reduce stock costs for the year 2021. The decision of MRO for the material coordination will change the upcoming years’ cost structure.
In addition, customer satisfaction in these days is expected to be a game-changer. Operators and leasing companies are economically not in good shape. Obviously, it is not possible to financially compensate those giants, but MROs should find win-win situations like low rental fees for parking area, low tool rentals or combined effort for preventive maintenance. Such win-win situations will bring loyalty, and long-term contracts. Loyalty and long-term contracts will positively affect the cost structure.
As a result, MRO should immediately begin cost structure review not only to forecast upcoming years cost but also to find win-win situations. We can clearly state that grounding aircraft is handicap also for true MROs contrary to the current situation. It seems that there are only two ways for MROs; to establish a team which consist of technical and financial experts or to get consultancy to calculate costs of upcoming years.
As always, selling price will wide-open the door for next years, but sales and strategy are conditioned by the technically calculated costs of upcoming years.
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