Manufacturers Take on Maintenance

Airplane makers are muscling into aircraft maintenance, creating new risks for airlines

Aircraft equipment manufacturers have taken control of the maintenance aftermarket as traditional alternatives dry up. Airlines must intervene or face higher maintenance costs over the long term.

For years, third-party repair organizations,or maintenance, repair, and overhaul companies (MROs), and original equipment manufacturers (OEMs) fiercely competed for this business. But recently, major engine and component manufacturers have muscled into the aircraft maintenance market, steadily eliminating aftermarket opportunities for airlines.

In response, airlines now increasingly conduct maintenance procurement during the process of selecting aircraft equipment, according to Oliver Wyman’s 2013 MRO Survey. This forces OEMs to compete against each other for large purchase and maintenance contracts lasting the life of the underlying fleet. While this trend benefits airlines, at least in the short term, it blocks independent MROs from major procurement campaigns altogether.And in the long run, as competition from independent MROs evaporates, airlines will pay higher maintenance costs.

Manufacturers Take on Maintenance