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Is your aircraft maintenance organization fit for the future?

The aviation industry is facing diverse challenges such as declining ticket fares, strong susceptibility to political proceedings and increasing competition. These challenges force all entities in the aviation industry to take countermeasures, also in the maintenance, repair and overhaul (MRO) segment. One of the most important steps is extending the asset utilization period and the operational life of aircraft in service, which increases the need for maintenance activities. Lufthansa Consulting’s recent analysis shows that roughly 45% of the world fleet is now older than 15 years. Longer asset utilization periods open up huge business potential for the MRO industry. Not only airline-affiliated maintenance organizations and independent MRO companies but also original equipment manufacturers (OEMs) such as Boeing and Airbus are trying to push harder into the aircraft maintenance market in order to participate in this development, gain market share, and generate revenue and earnings.

In view of the costs involved, aircraft maintenance is one of the major levers that add to an airline’s direct operating costs (DOCs). This raises the question as to which challenges MRO market participants are facing and how to reduce costs while increasing aircraft availability and at the same time ensuring the highest quality of services provided. There is no “one-size-fits-all” strategy to solve this problem. Several issues have to be tackled in a sophisticated manner and must take account of the various influencing factors such as the business model, company strategy, local peculiarities, and capacity / capabilities. Lufthansa Consulting has developed a holistic and industry-proven approach in order to support its clients globally. Specifically, focus areas like organizational structure, fleet composition and resource management are analyzed thoroughly in order to identify tangible and sustainable potential for optimization. 

It is crucial to understand the business model of the airline in question when developing the appropriate solutions. There are significant differences in the operating environment of premium carriers versus low-cost carriers, such as asset utilization, fleet complexity and cabin product, whereas the challenges of boosting operational efficiency and reducing costs are the same. Moreover, the set-up and maturity of business activities can differ. While a premium carrier, in particular, has to put greater effort into reviewing its organizational complexity, a low-cost carrier needs to focus on improving its process efficiency. However, this does not mean that certain topics are not of interest to both premium carriers and low-cost carriers. Achieving fleet commonality and optimizing fleet composition are two areas where premium carriers are increasing their efforts. Low-cost carriers, meanwhile, are striving to expand their business and implementing robust phase-in / phase-out policies.

One of the main endeavors that Lufthansa Consulting has observed during assignments for its clients is the trend toward transferring maintenance organizations from cost centers into profit centers. In response to this challenge, one potential approach that Lufthansa Consulting analyzes for its client’s specific business environment, is to generate revenues while cutting costs at the same time. Tailoring the appropriate strategy to this target requires immense efforts in terms of organizational design, IT systems and process management. Furthermore, the current pursuit of airlines to establish fleet commonality and homogeneity provides huge potential for aircraft maintenance organizations by means of major modifications and aircraft transition support, which become very important aspects. Lufthansa Consulting has a proven track record in identifying business opportunities and their suitability for an individual client’s business environment. 

Lufthansa Consulting provides the optimal measures, has the necessary expertise and supports clients globally in order to improve their aircraft maintenance management performance.

If you are interested in learning how Lufthansa Consulting can support your aircraft maintenance business and you would like to discuss the options available, please contact mail@lhconsulting.com.