MROs Battle Engine Material Availability

HONG KONG—Engine maintenance shops and airlines see a lack of material availability as their biggest challenge today as the problem heightens due to OEM production lags reverberating down the supply chain.

In a discussion about linking OEM production and the aftermarket at Aviation Week Network’s AeroEngines Asia-Pacific event last week, stakeholders noted that material availability is causing even more headaches than labor availability.

Corne van Rooij, general manager of HAECO Global Engine Support, said engine material availability issues are not new—stretching back at least a decade on certain programs—but uncertainty related to supply has heightened more recently and become more complex to manage.

“From a daily operational point of view, the biggest challenge is getting material back in time,” he said. “That is a major driver from a turnaround time perspective and all the uncertainty on getting the parts on time. Once we've solved one material issue then the next comes up."

DEVELOPING NEW REPAIRS

Van Rooij said HAECO has explored ways to mitigate this including exploring developing further repair capability on both new and existing engine types, which is increasingly cited as a method to help the industry ease existing supply chain challenges. However, doing this comes with limitations for a company like HAECO.

"Increasing repair development has its limitations, as some of our shops are nearing 90% of insourced repairs, which is quite high,” said van Rooij. “Instead, an area that is not discussed a lot is smart work scoping strategies. In a market with material shortages, have we considered a work scope requiring a lower material consumption while still fulfilling our customers' needs? For example, should we do a full shop visit or would a modular work scope or a hospital visit also suffice?” 

Simon Middlebrough, CEO of Singapore Aero Engine Services (SAESL), a Rolls-Royce-SIA Engineering joint venture focused on Trent engine MRO, says the company has also looked at playing a role in new repair developments.  

“The most obvious thing that we can do is to work with the OEMs to accelerate repair capability,” he said. “We are not an OEM, so [we] can't design the repairs ourselves, but we can help Rolls-Royce bring some of the repairs that are still lacking to fruition. The more we can do that, obviously, the more we can offset some other stuff that is addressable.” However, Middlebrough said there are limitations related to material availability that cannot be resolved and, as a result, the MRO must buy new from the OEM.

ADDING EFFICIENCIES

Middlebrough also pointed to growing capacity as a means of aiding aftermarket offerings, with SAESL targeting a 40% increase over the next 3-4 yr. in its Singapore-based operation. SAESL broke ground on a new facility next door to its existing site earlier this year and it has also taken over a former Rolls-Royce engine assembly and testing facility in Seletar.  “We’re going to repurpose that for modules and component repair,” he said.

Middlebrough added that productivity and efficiency are equally as important as adding new capacity. He noted that implementing  enterprise resource planning and manufacturing execution systems has led to wholesale changes in the way work is planned and carried out across SAESL's operations. “From a transformational point of view, that’ll be more of a challenge for our organization as we go through this build," he said.

Another MRO growing its network is Germany-headquartered MTU Maintenance. Friedhelm Kappei, chief operations officer of the Jinwan Branch at MTU Maintenance Zhuhai, cited MTU’s expansions at shops in China, going above more than 700 shop visits annually, as well as last month’s announcement that MTU will grow its operation in Dallas to service CFM International Leap and GE Aerospace GEnx engines. 

Given the broad scope of its network and engine capabilities, Kappei said MTU has leaned into this expanded network to tap into repairs and parts availability. “We use the network to purchase parts as well as exchange . . . for instance, we can get in touch with Hanover if we have a need for an engine part and it’ll likely be in stock. This has proved to be a good cooperation.” 

The region's airlines have also had to contend with the issue of material availability. “I think everyone, even the airlines and MROs, are struggling with materials [availability] right now,” said Aron Paul Pabilona, group manager of powerplant engineering at Cebu Pacific Air. Cebu's young fleet, averaging around five years in age, means that its engines typically have low hours and cycles when going for a shop visit, he said. This brings challenges related to the acceptance of used serviceable material (USM) parts.

“It’s widely known that most of the MROs are proposing to have USM materials but from an airline perspective, we are not able to just readily accept these USM parts," said Pabilona. "We have certain conditions to meet, especially for engines that are about to be redelivered.”

Pabilona said the only realistic route for an airline like Cebu is to stock higher volumes of parts to mitigate shortages due to a lack of USM in the market, reflecting similar strategies employed by carriers worldwide. 

WORKFORCE CONCERNS

The region is also experiencing workforce challenges, albeit not in longstanding personnel shortages. MTU's Kappei said recruitment in China from universities has not been as challenging as in other regions, but the company is experiencing challenges at sites looking to maintain a steady flow of sufficiently-trained talent to meet operational ramp-ups. “They have to be trained and qualified to keep the quality of your shop and to make things happen,” he said.

Meanwhile, SAESL’s Middlebrough said labor availability has eased somewhat in the past year, although the demographics of the workforce have changed, highlighting the industry’s emerging juniority problem. 

“Whilst the labor availability is better . . . what does that relatively low-level experience mean in terms of the risk profiles now in the business?" said Middlebrough. "While we have the right number of people, it's a very different demographic in the workforce than we had 3-4 yr. ago.”