The Present And Future Of MRO IT Solutions

Image

Paperless operations and tech adoption are key to aviation

Konstantinos Varsos and Dimitris Kostamis

23 min read

What has always excited me, and why I have enjoyed being in aviation so long, is that we are making the world a smaller, better place. We are seeing worldwide travel surge in the next few years, and we ’re a part of the solution, helping to make it safe and to enhance digital experiences
Fabiano Faccoli, CEO, Swiss Aviation Software Ltd

In this Velocity Podcast episode, Dimitris Kostamis, senior advisor at Oliver Wyman, is joined by Konstantinos Varsos, Transportation and Services partner at Oliver Wyman, and Fabiano Faccoli, CEO, Swiss Aviation Software Ltd. They discuss key trends in aviation MRO IT solutions and adoption. They explore the increasing demand for paperless operations, accelerated by the market’s interest in mobility solutions. The group touches upon the need to serve both early adopters and customers who are slower in digitizing their processes, as well as the flexibility and modularity required when deploying technology solutions.

Other key talking points include:

  • The need to delve into emerging technologies.
  • The importance of fully digitizing operations to maximize benefits from artificial intelligence and machine learning.
  • Regional differences in digitization adoption, with Europe leading the push and Asia embracing cloud-based solutions.

This episode is part of the Oliver Wyman’s Velocity Podcast series, which cover innovation and the evolution of the transportation, travel, and logistics industry. We explore the role of new mobility in changing how people and goods move globally, nationally, and locallye. Oliver Wyman’s Transportation and Services Practice prepares our clients for the future of mobility – whether by air, land, or sea.

Subscribe for more on: Apple Podcasts | Spotify | Google

Dimitris Kostamis

Let me get started by asking you a question about what you have seen in the past year in the market, in the MRO market, in terms of biggest trends, biggest challenges.

Fabiano Faccoli

I think we can differentiate between two groups. One is the existing customers we have and potential leads and the second is from the existing customers, we have seen an ardent desire or interest in going paperless. They were all talking about this before the pandemic, and I think the pandemic accelerated these trends. We are faced with labor shortages now with more work coming up and they strongly see opportunities in going paperless, getting rid of the paper combined with applying mobility at the aircraft directly or even at the aircraft. If you look at the overall markets, we have never had so many RFP's. We have been doing this since the last two years and the reason is always the customers. They need to get leaner; they need to get rid of those old legacy systems which are as well preventing them from moving forward to be more innovative and adopt new ways. I think where we have seen a large interest is around electronic tech logs. In the last two years, airlines primarily digitized the electronic flight and since the pandemic they have been putting the focus on the electronic tech logs. We started as well developing around one. We never had this first time we go into flight UPS started 18 months ago to develop the application of our existing customer base. Now by end of this year, the first ones will go live. So even better integrating flight ops with TechOps.

Dimitris

Which of these trends you are seeing today from potential or existing customers? Do you see them continuing persisting into the future? And to what extent is it changing the road map to address those trends?

Fabiano

I think what we will see in the future is that we will have several type of customers when it comes to going paperless or digitizing, we have the early adopters or the innovators even before which are driving this which are driving the industry. And then we have the others, which are a little bit slower in adopting this and we will have, I believe, 5 to 10 years of like a hybrid setup where we have customers which are right at the top. Top notch trying to digitize the others which take more time. So our challenge is to have a software which actually supports both realities both processes. And because you cannot force visualization or paperless to some customers, you need to give them the right time to change. But I think that's one of the biggest challenges. That's where we are focusing and that’s the need for both realities. I think still mobility will continue if we look at how many of our customers are using tablets at aircraft, it's still a minority. But again, last two years we have seen a huge increase in adoption of these technologies. And another aspect which will be more clear in future is an MD system like AMOS or like the ones from our competitors alone will not be sufficient to fully digitize tech ops. You will always have some areas which require specialized software which do specialized tasks. So where we focus on is in creating an ecosystem which allows us to easily integrate your party products for independent software vendors in this aimless ecosystem. And what further helps this is add the new ownership change we had since January this year. So where we changed from belonging to Swiss understand the technique. And Lufthansa Technik, they already have digital products in their portfolio and we have created the digital ecosystem currently consisting of AMOS, aviator and fly docs. And our objective is to provide out-of-the-box ecosystem, which allows customers to actually accelerate the digitalization as these systems are seamlessly integrated, they work out-of-the-box. So there is no need to create ad hoc integrations. We believe that we can significantly fast track the industries digitalization through this ecosystem. So where we have aimless focusing on pure tech OPS, execution, engineering, planning, side fly docs, looking after the tech records storing and then avatar with their predictive maintenance. And as well condition monitoring modules. So I think the key in the future is to offer customer an open. System or portfolio of systems which allow them to keep. Applications which work fine for them and integrate them in this overall architecture.

Dimitris

Very good. So actually now you mentioned the recent organizational change, would you say this is something that your current and potential new customers should be excited about? Is there anything they should be concerned about?

Fabiano

No, I think they can primarily be excited in a clear strategy is to keep those products independent.

To allow each product to be sold to whoever, so it is not a closed system. Potential customers can use one of our competing products. No problem with that one and vice versa as well. We are open to integrate with any other OEMs or any other software vendors. So, there is no restriction. Customers can just benefit if they choose to take everything one shop. Stop shop solution the better, but we are not limiting them in which systems they are integrating. I think it provides us well credibility if one of the largest MRO in the world has purchased one of the leading end of these systems because since a few years we are pushing strongly to get into the emerald market. Historically we came from an airline environment but since around 10 years the number of pure MRO. Customers is increasing and I think this recent ownership change for substantiates our, yeah, our willingness to become a main player as well in the pure emerald organizations.

Dimitris

You just spoke about what you're telling your customers about. Taking the whole product or pieces of it, and I wanted to ask you something that we're getting actually asked ourselves a lot, which is what do you recommend to your customers in general going for the entire, let's say, suite of Amos applications or if they? Have if they. Like to just pick a few modules and. What does that mean in terms of installing the actual product? And implementing it, yeah.

Fabiano

Of course, using a highly integrated system has a lot of advantages. The data is naturally located the same and the same database. We can easily move and navigate between applications. But implementing it in one go brings risks and challenges. What we have seen uh in the past as well that we are trying to reduce if required, the initial scope. And then gradually adopt hardware applications which are currently used by the customer. So, at the end it is not the is one better than the other. Fully integrated system has advantages, but the time you might want to take to get there. We need to be adjusted by customer case by case and typically the larger the customer is, the more challenging it is to do a Big Bang. And the smaller ones, it's usually not a big problem in replacing most of what is currently used by Amos. Yeah, the most recent example is actually Lufthansa Airlines, which went live last year. So one year ago with Amos. And they have some parts, some processes like the whole material provisioning which is done by Lufthansa technique in their own system and we have built integrations between those systems and this is one example where which shows that you can use only parts of Amos and have other large parts of your value chain down outside. And I think we see more of these cases in the future and we are more open today than we were perhaps in the past in supporting such a modular approach. So not take everything but just stepwise. And if you eventually want to end up using AMOS for everything, that's fine, but you're not necessarily. Yeah, forced to.

Konstantinos

Speaking about the future, let's say three to five years down the road. What are some emerging technologies that your company is looking at or even actively developing For your customers?

Fabiano

Yes, neither our uh, our bread and butter are still, uh, technical operation. So, we must make sure that all these processes run smoothly. There is not much modern technology which can be used there. I mean primarily it is mobility, but where we see that some customers are experimenting, for instance drone and other options. So they were using drones to identify lightning strikes, and that's some that's a domain which is very specific. There are specialized companies which are working in this in this area and with them we are integrating the systems. So that's what I mentioned at the beginning. It would be hard for one company to be some Jack of all trades. But we are always trying to look OK where our potential partner. Which we can integrate the systems I think and everybody always likes to talk about AI and blockchain and on big data and all these words. But it doesn't make sense to talk about AI or machine learning if you're. Core processes are not digitized. Because there is nothing to crunch. If it still takes two days to book one and change in the system so the key is first to really fully digitize your operation and then you can start using AI and ML technologies and we are using machine learning as well in the in planning area where we try to automate repetitive. Simple planning tasks, but again, to do this you need data. You need a lot of data and you need up to date and current.

Konstantinos

When do you think everybody's going to go paperless? Like how fast is that adoption going to happen?

Fabiano

It still takes 10 years or even more probably to get everybody. And then the question is paperless to, with which extent you as an organization you can go paperless? How far are we from a full paperless back to birth or any component? I think there we are still far away because it requires all the market players to be part of it, lesser the operators, the MROs. And what we try to facilitate with Amos Central is actually the flow of this data. So that data between operator and the new row can flow in its natural digital state. Not having to 1st to print something, then ship it or scan it with PDF and then OCR it.

Dimitris

But it still takes time. I would like to go back to a couple of macro factors we mentioned earlier. So, as you are talking to customers or potential customers. Has the type of conversation changed in the last year in terms of the concerns, asset productivity to youth or something else? And related to that, do you see any differences regionally in Americas versus Europe, Asia?

Fabiano

Even in Europe, where we still have an exceptionally large customer base, we have seen a strong drive towards digitalization. Asia as well. Asia is more. They are more digital native, even though especially the younger generation than other areas. They are incredibly open to operating as well. Our product in the cloud. We have the most cloud operated customers in Asia. Now US North, Central America, South America, a little bit slower in terms of going paper. Plus, but still a strong drive. But right now we see in Europe the biggest, biggest push and in Asia, the biggest openness to operate only through the cloud.

Dimitris

We are faced here in Americas, but also globally with a shortage of technicians. And there are multiple reasons for that. How do you see technology really helping alleviate that, that shortage short and near-term future?

Fabiano

I think it's a key technology to address this and two aspects we are pushing hard is one is automation. We’re not looking at robotic automation process automation, that's usually what we do if you have workflows spanning through different processes. So what we try to have natively elements is automation, so getting rid of repetitive tasks that the machine can do way better than the human being. So that's one aspect automation. The other one is moving away from presenting a lot of information. Into having like digital assistants which are telling you, OK, I system I would do this. I would plan work for tomorrow like this or he agreeing and then the human being focuses more on resolving conflicts or on replanning some things. But he's supported by digital. Agent and this helps as well to actually. Do more operate more aircrafts with the same workforce? Because I think that's the biggest challenge. Keep the current workforce, but have a larger operation done with the same workforce. And then again, so it's automation, it's moving to digital assistants and it's having intuitive simple mobile applications which allow the mechanic to spend the least possible time on the device. Because the mechanic his main job is fixing an aircraft and he's not spending time in front of the screen, there are other profiles like planners, material planners, yes, they spend their whole day on the screen. But those profiles which should do something else not on the screen, they should. We should try to limit screen time those profiles.

Konstantinos

You mentioned earlier that you are doing some on the predictive side and well does this affect me But how you is it does not involve aircraft data or how?
Fabiano

Yeah, that's something where we decided in the in the Lufthansa digital ecosystem that that's the yeah, the scope of Avatar. So, we enable us, we are not planning to uh to do a lot of in predictive maintenance, but that's why we have Avatar as a as a core element of the ecosystem and they have done already a lot many predictors they were using where they're reading life state of the aircraft and then together with the customers, they are trying to find. Data models, which they then can apply to predict OK when the component should be replaced. But that's where the ecosystem comes into play, and which allows each of the ecosystem members to focus on their core competencies. And Avatar has been working for five years on predictive maintenance. But still, we as animals, we provide the maintenance data. They combine it with the with the live aircraft data, so it's all about letting the data freely flow between these applications.

Konstantinos

What excites you about the future?

Fabiano

And first of all, what has always excited me, and why I stayed so long in aviation, is making the world a smaller place. We've seen what the pandemic can cause, I don’t think it is a good idea to isolate humanity, so still seeing that recovery and seeing worldwide travel surging in the next few years, it does make me we want to be a part of this, and we want to make this still safe and to have more digital experiences. Our things which are exciting us is urban mobility, eVTOL companies, so we are in discussion with a few of them. We already have few customers in that direction and that's fascinating. Imagine that you land at an airport you can board a two-seater electric mini helicopter or drone and just fly downtown and seeing this happen, it's still a dream, but seeing this happen, seeing all these unmanned or unpiloted vehicles flying from the airports to downtown, I think that's fascinating. We’re looking forward to be part of this one. The other one is space travel. It's probably a little bit farther away, at least for the majority of the population, but we are in talks as well with some companies working in this domain. Seeing humanity or a broader number of humans, enjoying space travel and being a part of this, which certainly something which. Which is exciting us.

Dimitris

Fabiano, thank you so much for your time and insights today.

Konstantinos

This was exciting. Thank you for joining us.

This transcript was edited for clarity

    In this Velocity Podcast episode, Dimitris Kostamis, senior advisor at Oliver Wyman, is joined by Konstantinos Varsos, Transportation and Services partner at Oliver Wyman, and Fabiano Faccoli, CEO, Swiss Aviation Software Ltd. They discuss key trends in aviation MRO IT solutions and adoption. They explore the increasing demand for paperless operations, accelerated by the market’s interest in mobility solutions. The group touches upon the need to serve both early adopters and customers who are slower in digitizing their processes, as well as the flexibility and modularity required when deploying technology solutions.

    Other key talking points include:

    • The need to delve into emerging technologies.
    • The importance of fully digitizing operations to maximize benefits from artificial intelligence and machine learning.
    • Regional differences in digitization adoption, with Europe leading the push and Asia embracing cloud-based solutions.

    This episode is part of the Oliver Wyman’s Velocity Podcast series, which cover innovation and the evolution of the transportation, travel, and logistics industry. We explore the role of new mobility in changing how people and goods move globally, nationally, and locallye. Oliver Wyman’s Transportation and Services Practice prepares our clients for the future of mobility – whether by air, land, or sea.

    Subscribe for more on: Apple Podcasts | Spotify | Google

    Dimitris Kostamis

    Let me get started by asking you a question about what you have seen in the past year in the market, in the MRO market, in terms of biggest trends, biggest challenges.

    Fabiano Faccoli

    I think we can differentiate between two groups. One is the existing customers we have and potential leads and the second is from the existing customers, we have seen an ardent desire or interest in going paperless. They were all talking about this before the pandemic, and I think the pandemic accelerated these trends. We are faced with labor shortages now with more work coming up and they strongly see opportunities in going paperless, getting rid of the paper combined with applying mobility at the aircraft directly or even at the aircraft. If you look at the overall markets, we have never had so many RFP's. We have been doing this since the last two years and the reason is always the customers. They need to get leaner; they need to get rid of those old legacy systems which are as well preventing them from moving forward to be more innovative and adopt new ways. I think where we have seen a large interest is around electronic tech logs. In the last two years, airlines primarily digitized the electronic flight and since the pandemic they have been putting the focus on the electronic tech logs. We started as well developing around one. We never had this first time we go into flight UPS started 18 months ago to develop the application of our existing customer base. Now by end of this year, the first ones will go live. So even better integrating flight ops with TechOps.

    Dimitris

    Which of these trends you are seeing today from potential or existing customers? Do you see them continuing persisting into the future? And to what extent is it changing the road map to address those trends?

    Fabiano

    I think what we will see in the future is that we will have several type of customers when it comes to going paperless or digitizing, we have the early adopters or the innovators even before which are driving this which are driving the industry. And then we have the others, which are a little bit slower in adopting this and we will have, I believe, 5 to 10 years of like a hybrid setup where we have customers which are right at the top. Top notch trying to digitize the others which take more time. So our challenge is to have a software which actually supports both realities both processes. And because you cannot force visualization or paperless to some customers, you need to give them the right time to change. But I think that's one of the biggest challenges. That's where we are focusing and that’s the need for both realities. I think still mobility will continue if we look at how many of our customers are using tablets at aircraft, it's still a minority. But again, last two years we have seen a huge increase in adoption of these technologies. And another aspect which will be more clear in future is an MD system like AMOS or like the ones from our competitors alone will not be sufficient to fully digitize tech ops. You will always have some areas which require specialized software which do specialized tasks. So where we focus on is in creating an ecosystem which allows us to easily integrate your party products for independent software vendors in this aimless ecosystem. And what further helps this is add the new ownership change we had since January this year. So where we changed from belonging to Swiss understand the technique. And Lufthansa Technik, they already have digital products in their portfolio and we have created the digital ecosystem currently consisting of AMOS, aviator and fly docs. And our objective is to provide out-of-the-box ecosystem, which allows customers to actually accelerate the digitalization as these systems are seamlessly integrated, they work out-of-the-box. So there is no need to create ad hoc integrations. We believe that we can significantly fast track the industries digitalization through this ecosystem. So where we have aimless focusing on pure tech OPS, execution, engineering, planning, side fly docs, looking after the tech records storing and then avatar with their predictive maintenance. And as well condition monitoring modules. So I think the key in the future is to offer customer an open. System or portfolio of systems which allow them to keep. Applications which work fine for them and integrate them in this overall architecture.

    Dimitris

    Very good. So actually now you mentioned the recent organizational change, would you say this is something that your current and potential new customers should be excited about? Is there anything they should be concerned about?

    Fabiano

    No, I think they can primarily be excited in a clear strategy is to keep those products independent.

    To allow each product to be sold to whoever, so it is not a closed system. Potential customers can use one of our competing products. No problem with that one and vice versa as well. We are open to integrate with any other OEMs or any other software vendors. So, there is no restriction. Customers can just benefit if they choose to take everything one shop. Stop shop solution the better, but we are not limiting them in which systems they are integrating. I think it provides us well credibility if one of the largest MRO in the world has purchased one of the leading end of these systems because since a few years we are pushing strongly to get into the emerald market. Historically we came from an airline environment but since around 10 years the number of pure MRO. Customers is increasing and I think this recent ownership change for substantiates our, yeah, our willingness to become a main player as well in the pure emerald organizations.

    Dimitris

    You just spoke about what you're telling your customers about. Taking the whole product or pieces of it, and I wanted to ask you something that we're getting actually asked ourselves a lot, which is what do you recommend to your customers in general going for the entire, let's say, suite of Amos applications or if they? Have if they. Like to just pick a few modules and. What does that mean in terms of installing the actual product? And implementing it, yeah.

    Fabiano

    Of course, using a highly integrated system has a lot of advantages. The data is naturally located the same and the same database. We can easily move and navigate between applications. But implementing it in one go brings risks and challenges. What we have seen uh in the past as well that we are trying to reduce if required, the initial scope. And then gradually adopt hardware applications which are currently used by the customer. So, at the end it is not the is one better than the other. Fully integrated system has advantages, but the time you might want to take to get there. We need to be adjusted by customer case by case and typically the larger the customer is, the more challenging it is to do a Big Bang. And the smaller ones, it's usually not a big problem in replacing most of what is currently used by Amos. Yeah, the most recent example is actually Lufthansa Airlines, which went live last year. So one year ago with Amos. And they have some parts, some processes like the whole material provisioning which is done by Lufthansa technique in their own system and we have built integrations between those systems and this is one example where which shows that you can use only parts of Amos and have other large parts of your value chain down outside. And I think we see more of these cases in the future and we are more open today than we were perhaps in the past in supporting such a modular approach. So not take everything but just stepwise. And if you eventually want to end up using AMOS for everything, that's fine, but you're not necessarily. Yeah, forced to.

    Konstantinos

    Speaking about the future, let's say three to five years down the road. What are some emerging technologies that your company is looking at or even actively developing For your customers?

    Fabiano

    Yes, neither our uh, our bread and butter are still, uh, technical operation. So, we must make sure that all these processes run smoothly. There is not much modern technology which can be used there. I mean primarily it is mobility, but where we see that some customers are experimenting, for instance drone and other options. So they were using drones to identify lightning strikes, and that's some that's a domain which is very specific. There are specialized companies which are working in this in this area and with them we are integrating the systems. So that's what I mentioned at the beginning. It would be hard for one company to be some Jack of all trades. But we are always trying to look OK where our potential partner. Which we can integrate the systems I think and everybody always likes to talk about AI and blockchain and on big data and all these words. But it doesn't make sense to talk about AI or machine learning if you're. Core processes are not digitized. Because there is nothing to crunch. If it still takes two days to book one and change in the system so the key is first to really fully digitize your operation and then you can start using AI and ML technologies and we are using machine learning as well in the in planning area where we try to automate repetitive. Simple planning tasks, but again, to do this you need data. You need a lot of data and you need up to date and current.

    Konstantinos

    When do you think everybody's going to go paperless? Like how fast is that adoption going to happen?

    Fabiano

    It still takes 10 years or even more probably to get everybody. And then the question is paperless to, with which extent you as an organization you can go paperless? How far are we from a full paperless back to birth or any component? I think there we are still far away because it requires all the market players to be part of it, lesser the operators, the MROs. And what we try to facilitate with Amos Central is actually the flow of this data. So that data between operator and the new row can flow in its natural digital state. Not having to 1st to print something, then ship it or scan it with PDF and then OCR it.

    Dimitris

    But it still takes time. I would like to go back to a couple of macro factors we mentioned earlier. So, as you are talking to customers or potential customers. Has the type of conversation changed in the last year in terms of the concerns, asset productivity to youth or something else? And related to that, do you see any differences regionally in Americas versus Europe, Asia?

    Fabiano

    Even in Europe, where we still have an exceptionally large customer base, we have seen a strong drive towards digitalization. Asia as well. Asia is more. They are more digital native, even though especially the younger generation than other areas. They are incredibly open to operating as well. Our product in the cloud. We have the most cloud operated customers in Asia. Now US North, Central America, South America, a little bit slower in terms of going paper. Plus, but still a strong drive. But right now we see in Europe the biggest, biggest push and in Asia, the biggest openness to operate only through the cloud.

    Dimitris

    We are faced here in Americas, but also globally with a shortage of technicians. And there are multiple reasons for that. How do you see technology really helping alleviate that, that shortage short and near-term future?

    Fabiano

    I think it's a key technology to address this and two aspects we are pushing hard is one is automation. We’re not looking at robotic automation process automation, that's usually what we do if you have workflows spanning through different processes. So what we try to have natively elements is automation, so getting rid of repetitive tasks that the machine can do way better than the human being. So that's one aspect automation. The other one is moving away from presenting a lot of information. Into having like digital assistants which are telling you, OK, I system I would do this. I would plan work for tomorrow like this or he agreeing and then the human being focuses more on resolving conflicts or on replanning some things. But he's supported by digital. Agent and this helps as well to actually. Do more operate more aircrafts with the same workforce? Because I think that's the biggest challenge. Keep the current workforce, but have a larger operation done with the same workforce. And then again, so it's automation, it's moving to digital assistants and it's having intuitive simple mobile applications which allow the mechanic to spend the least possible time on the device. Because the mechanic his main job is fixing an aircraft and he's not spending time in front of the screen, there are other profiles like planners, material planners, yes, they spend their whole day on the screen. But those profiles which should do something else not on the screen, they should. We should try to limit screen time those profiles.

    Konstantinos

    You mentioned earlier that you are doing some on the predictive side and well does this affect me But how you is it does not involve aircraft data or how?
    Fabiano

    Yeah, that's something where we decided in the in the Lufthansa digital ecosystem that that's the yeah, the scope of Avatar. So, we enable us, we are not planning to uh to do a lot of in predictive maintenance, but that's why we have Avatar as a as a core element of the ecosystem and they have done already a lot many predictors they were using where they're reading life state of the aircraft and then together with the customers, they are trying to find. Data models, which they then can apply to predict OK when the component should be replaced. But that's where the ecosystem comes into play, and which allows each of the ecosystem members to focus on their core competencies. And Avatar has been working for five years on predictive maintenance. But still, we as animals, we provide the maintenance data. They combine it with the with the live aircraft data, so it's all about letting the data freely flow between these applications.

    Konstantinos

    What excites you about the future?

    Fabiano

    And first of all, what has always excited me, and why I stayed so long in aviation, is making the world a smaller place. We've seen what the pandemic can cause, I don’t think it is a good idea to isolate humanity, so still seeing that recovery and seeing worldwide travel surging in the next few years, it does make me we want to be a part of this, and we want to make this still safe and to have more digital experiences. Our things which are exciting us is urban mobility, eVTOL companies, so we are in discussion with a few of them. We already have few customers in that direction and that's fascinating. Imagine that you land at an airport you can board a two-seater electric mini helicopter or drone and just fly downtown and seeing this happen, it's still a dream, but seeing this happen, seeing all these unmanned or unpiloted vehicles flying from the airports to downtown, I think that's fascinating. We’re looking forward to be part of this one. The other one is space travel. It's probably a little bit farther away, at least for the majority of the population, but we are in talks as well with some companies working in this domain. Seeing humanity or a broader number of humans, enjoying space travel and being a part of this, which certainly something which. Which is exciting us.

    Dimitris

    Fabiano, thank you so much for your time and insights today.

    Konstantinos

    This was exciting. Thank you for joining us.

    This transcript was edited for clarity

    In this Velocity Podcast episode, Dimitris Kostamis, senior advisor at Oliver Wyman, is joined by Konstantinos Varsos, Transportation and Services partner at Oliver Wyman, and Fabiano Faccoli, CEO, Swiss Aviation Software Ltd. They discuss key trends in aviation MRO IT solutions and adoption. They explore the increasing demand for paperless operations, accelerated by the market’s interest in mobility solutions. The group touches upon the need to serve both early adopters and customers who are slower in digitizing their processes, as well as the flexibility and modularity required when deploying technology solutions.

    Other key talking points include:

    • The need to delve into emerging technologies.
    • The importance of fully digitizing operations to maximize benefits from artificial intelligence and machine learning.
    • Regional differences in digitization adoption, with Europe leading the push and Asia embracing cloud-based solutions.

    This episode is part of the Oliver Wyman’s Velocity Podcast series, which cover innovation and the evolution of the transportation, travel, and logistics industry. We explore the role of new mobility in changing how people and goods move globally, nationally, and locallye. Oliver Wyman’s Transportation and Services Practice prepares our clients for the future of mobility – whether by air, land, or sea.

    Subscribe for more on: Apple Podcasts | Spotify | Google

    Dimitris Kostamis

    Let me get started by asking you a question about what you have seen in the past year in the market, in the MRO market, in terms of biggest trends, biggest challenges.

    Fabiano Faccoli

    I think we can differentiate between two groups. One is the existing customers we have and potential leads and the second is from the existing customers, we have seen an ardent desire or interest in going paperless. They were all talking about this before the pandemic, and I think the pandemic accelerated these trends. We are faced with labor shortages now with more work coming up and they strongly see opportunities in going paperless, getting rid of the paper combined with applying mobility at the aircraft directly or even at the aircraft. If you look at the overall markets, we have never had so many RFP's. We have been doing this since the last two years and the reason is always the customers. They need to get leaner; they need to get rid of those old legacy systems which are as well preventing them from moving forward to be more innovative and adopt new ways. I think where we have seen a large interest is around electronic tech logs. In the last two years, airlines primarily digitized the electronic flight and since the pandemic they have been putting the focus on the electronic tech logs. We started as well developing around one. We never had this first time we go into flight UPS started 18 months ago to develop the application of our existing customer base. Now by end of this year, the first ones will go live. So even better integrating flight ops with TechOps.

    Dimitris

    Which of these trends you are seeing today from potential or existing customers? Do you see them continuing persisting into the future? And to what extent is it changing the road map to address those trends?

    Fabiano

    I think what we will see in the future is that we will have several type of customers when it comes to going paperless or digitizing, we have the early adopters or the innovators even before which are driving this which are driving the industry. And then we have the others, which are a little bit slower in adopting this and we will have, I believe, 5 to 10 years of like a hybrid setup where we have customers which are right at the top. Top notch trying to digitize the others which take more time. So our challenge is to have a software which actually supports both realities both processes. And because you cannot force visualization or paperless to some customers, you need to give them the right time to change. But I think that's one of the biggest challenges. That's where we are focusing and that’s the need for both realities. I think still mobility will continue if we look at how many of our customers are using tablets at aircraft, it's still a minority. But again, last two years we have seen a huge increase in adoption of these technologies. And another aspect which will be more clear in future is an MD system like AMOS or like the ones from our competitors alone will not be sufficient to fully digitize tech ops. You will always have some areas which require specialized software which do specialized tasks. So where we focus on is in creating an ecosystem which allows us to easily integrate your party products for independent software vendors in this aimless ecosystem. And what further helps this is add the new ownership change we had since January this year. So where we changed from belonging to Swiss understand the technique. And Lufthansa Technik, they already have digital products in their portfolio and we have created the digital ecosystem currently consisting of AMOS, aviator and fly docs. And our objective is to provide out-of-the-box ecosystem, which allows customers to actually accelerate the digitalization as these systems are seamlessly integrated, they work out-of-the-box. So there is no need to create ad hoc integrations. We believe that we can significantly fast track the industries digitalization through this ecosystem. So where we have aimless focusing on pure tech OPS, execution, engineering, planning, side fly docs, looking after the tech records storing and then avatar with their predictive maintenance. And as well condition monitoring modules. So I think the key in the future is to offer customer an open. System or portfolio of systems which allow them to keep. Applications which work fine for them and integrate them in this overall architecture.

    Dimitris

    Very good. So actually now you mentioned the recent organizational change, would you say this is something that your current and potential new customers should be excited about? Is there anything they should be concerned about?

    Fabiano

    No, I think they can primarily be excited in a clear strategy is to keep those products independent.

    To allow each product to be sold to whoever, so it is not a closed system. Potential customers can use one of our competing products. No problem with that one and vice versa as well. We are open to integrate with any other OEMs or any other software vendors. So, there is no restriction. Customers can just benefit if they choose to take everything one shop. Stop shop solution the better, but we are not limiting them in which systems they are integrating. I think it provides us well credibility if one of the largest MRO in the world has purchased one of the leading end of these systems because since a few years we are pushing strongly to get into the emerald market. Historically we came from an airline environment but since around 10 years the number of pure MRO. Customers is increasing and I think this recent ownership change for substantiates our, yeah, our willingness to become a main player as well in the pure emerald organizations.

    Dimitris

    You just spoke about what you're telling your customers about. Taking the whole product or pieces of it, and I wanted to ask you something that we're getting actually asked ourselves a lot, which is what do you recommend to your customers in general going for the entire, let's say, suite of Amos applications or if they? Have if they. Like to just pick a few modules and. What does that mean in terms of installing the actual product? And implementing it, yeah.

    Fabiano

    Of course, using a highly integrated system has a lot of advantages. The data is naturally located the same and the same database. We can easily move and navigate between applications. But implementing it in one go brings risks and challenges. What we have seen uh in the past as well that we are trying to reduce if required, the initial scope. And then gradually adopt hardware applications which are currently used by the customer. So, at the end it is not the is one better than the other. Fully integrated system has advantages, but the time you might want to take to get there. We need to be adjusted by customer case by case and typically the larger the customer is, the more challenging it is to do a Big Bang. And the smaller ones, it's usually not a big problem in replacing most of what is currently used by Amos. Yeah, the most recent example is actually Lufthansa Airlines, which went live last year. So one year ago with Amos. And they have some parts, some processes like the whole material provisioning which is done by Lufthansa technique in their own system and we have built integrations between those systems and this is one example where which shows that you can use only parts of Amos and have other large parts of your value chain down outside. And I think we see more of these cases in the future and we are more open today than we were perhaps in the past in supporting such a modular approach. So not take everything but just stepwise. And if you eventually want to end up using AMOS for everything, that's fine, but you're not necessarily. Yeah, forced to.

    Konstantinos

    Speaking about the future, let's say three to five years down the road. What are some emerging technologies that your company is looking at or even actively developing For your customers?

    Fabiano

    Yes, neither our uh, our bread and butter are still, uh, technical operation. So, we must make sure that all these processes run smoothly. There is not much modern technology which can be used there. I mean primarily it is mobility, but where we see that some customers are experimenting, for instance drone and other options. So they were using drones to identify lightning strikes, and that's some that's a domain which is very specific. There are specialized companies which are working in this in this area and with them we are integrating the systems. So that's what I mentioned at the beginning. It would be hard for one company to be some Jack of all trades. But we are always trying to look OK where our potential partner. Which we can integrate the systems I think and everybody always likes to talk about AI and blockchain and on big data and all these words. But it doesn't make sense to talk about AI or machine learning if you're. Core processes are not digitized. Because there is nothing to crunch. If it still takes two days to book one and change in the system so the key is first to really fully digitize your operation and then you can start using AI and ML technologies and we are using machine learning as well in the in planning area where we try to automate repetitive. Simple planning tasks, but again, to do this you need data. You need a lot of data and you need up to date and current.

    Konstantinos

    When do you think everybody's going to go paperless? Like how fast is that adoption going to happen?

    Fabiano

    It still takes 10 years or even more probably to get everybody. And then the question is paperless to, with which extent you as an organization you can go paperless? How far are we from a full paperless back to birth or any component? I think there we are still far away because it requires all the market players to be part of it, lesser the operators, the MROs. And what we try to facilitate with Amos Central is actually the flow of this data. So that data between operator and the new row can flow in its natural digital state. Not having to 1st to print something, then ship it or scan it with PDF and then OCR it.

    Dimitris

    But it still takes time. I would like to go back to a couple of macro factors we mentioned earlier. So, as you are talking to customers or potential customers. Has the type of conversation changed in the last year in terms of the concerns, asset productivity to youth or something else? And related to that, do you see any differences regionally in Americas versus Europe, Asia?

    Fabiano

    Even in Europe, where we still have an exceptionally large customer base, we have seen a strong drive towards digitalization. Asia as well. Asia is more. They are more digital native, even though especially the younger generation than other areas. They are incredibly open to operating as well. Our product in the cloud. We have the most cloud operated customers in Asia. Now US North, Central America, South America, a little bit slower in terms of going paper. Plus, but still a strong drive. But right now we see in Europe the biggest, biggest push and in Asia, the biggest openness to operate only through the cloud.

    Dimitris

    We are faced here in Americas, but also globally with a shortage of technicians. And there are multiple reasons for that. How do you see technology really helping alleviate that, that shortage short and near-term future?

    Fabiano

    I think it's a key technology to address this and two aspects we are pushing hard is one is automation. We’re not looking at robotic automation process automation, that's usually what we do if you have workflows spanning through different processes. So what we try to have natively elements is automation, so getting rid of repetitive tasks that the machine can do way better than the human being. So that's one aspect automation. The other one is moving away from presenting a lot of information. Into having like digital assistants which are telling you, OK, I system I would do this. I would plan work for tomorrow like this or he agreeing and then the human being focuses more on resolving conflicts or on replanning some things. But he's supported by digital. Agent and this helps as well to actually. Do more operate more aircrafts with the same workforce? Because I think that's the biggest challenge. Keep the current workforce, but have a larger operation done with the same workforce. And then again, so it's automation, it's moving to digital assistants and it's having intuitive simple mobile applications which allow the mechanic to spend the least possible time on the device. Because the mechanic his main job is fixing an aircraft and he's not spending time in front of the screen, there are other profiles like planners, material planners, yes, they spend their whole day on the screen. But those profiles which should do something else not on the screen, they should. We should try to limit screen time those profiles.

    Konstantinos

    You mentioned earlier that you are doing some on the predictive side and well does this affect me But how you is it does not involve aircraft data or how?
    Fabiano

    Yeah, that's something where we decided in the in the Lufthansa digital ecosystem that that's the yeah, the scope of Avatar. So, we enable us, we are not planning to uh to do a lot of in predictive maintenance, but that's why we have Avatar as a as a core element of the ecosystem and they have done already a lot many predictors they were using where they're reading life state of the aircraft and then together with the customers, they are trying to find. Data models, which they then can apply to predict OK when the component should be replaced. But that's where the ecosystem comes into play, and which allows each of the ecosystem members to focus on their core competencies. And Avatar has been working for five years on predictive maintenance. But still, we as animals, we provide the maintenance data. They combine it with the with the live aircraft data, so it's all about letting the data freely flow between these applications.

    Konstantinos

    What excites you about the future?

    Fabiano

    And first of all, what has always excited me, and why I stayed so long in aviation, is making the world a smaller place. We've seen what the pandemic can cause, I don’t think it is a good idea to isolate humanity, so still seeing that recovery and seeing worldwide travel surging in the next few years, it does make me we want to be a part of this, and we want to make this still safe and to have more digital experiences. Our things which are exciting us is urban mobility, eVTOL companies, so we are in discussion with a few of them. We already have few customers in that direction and that's fascinating. Imagine that you land at an airport you can board a two-seater electric mini helicopter or drone and just fly downtown and seeing this happen, it's still a dream, but seeing this happen, seeing all these unmanned or unpiloted vehicles flying from the airports to downtown, I think that's fascinating. We’re looking forward to be part of this one. The other one is space travel. It's probably a little bit farther away, at least for the majority of the population, but we are in talks as well with some companies working in this domain. Seeing humanity or a broader number of humans, enjoying space travel and being a part of this, which certainly something which. Which is exciting us.

    Dimitris

    Fabiano, thank you so much for your time and insights today.

    Konstantinos

    This was exciting. Thank you for joining us.

    This transcript was edited for clarity

Authors