Podcast: Key Takeaways From MRO Latin America 2025

Insights from MRO Latin America in Panama—including what potential U.S. tariffs on the region could mean for aerospace manufacturing and workforce—as well as how airlines and MROs are building capacity in the region. With Aviation Week's Lee Ann Shay, Lindsay Bjerregaard and Lori Ranson. 

Lee Ann Shay: Greetings and welcome to this MRO podcast. We've got a lot of alliteration in this episode. I'm Lee Ann Shay, executive editor for MRO and Business Aviation at Aviation Week Network. And I'm here with my colleagues Lindsey Bjerregaard, who is Aviation Week's managing director for MRO, and Lori Ranson, who is the senior analyst for the Americas at CAPA. Today's topic is MRO in Latin America, so we've got Lindsay, Lori and Lee Ann talking about Latin America. So ladies, another L, thank you for joining me.

Lindsey Bjerregaard: Thank you.

Lori Ranson: Thank you.

Lee Ann Shay: Lindsay and Lori, you were in Panama this week covering Aviation Week's, MRO Latin America. What was the mood there? Especially given Latin America is projected for some really good growth, but U.S. political activities perhaps came up?

Lindsay Bjerregaard: I can go first. Yes, it was interesting. I was walking into the situation a little wary because being an American flying into Panama, Panama City right by the canal, when my country's president is threatening to seize it and place tariffs on Mexico, there were a lot of Mexican companies there. I was expecting potentially some anger and hostility, but everybody actually seemed to be relatively calm and going with the flow with it. The three big things that seemed to come up and that I was asking people about, one obviously were that the proposed tariffs on Mexico. The first day of the show, it was right after the day that the Trump administration announced that they were going to be paused for 30 days. Obviously, the immigration crackdown has impacts because there's a lot of workers from Latin America that are getting recruited to work for U.S. companies.

And then in late December, there was also the recent new rule that came through the FAA about requiring drug and alcohol testing for non-U.S. repair stations that work on U.S. aircraft. So that would impact them, too. Regarding that last one, with the rule about drug and alcohol testing, I kind of found it surprising to hear that most of the MROs that I talked to were not really fazed at all by that policy. It sounds like a lot of them already have requirements for this in place. And for those that don’t, this allows them to point the finger at the U.S. and have them be the bad guy so they can enforce that without being the bad guy. In terms of the tariff situation, I know Lori's going to have some things to say about this as well, but it sounds like it will definitely have an impact on aerospace manufacturing.

So for instance, one of the companies that I spoke with, Soisa Aircraft Interiors, was worried about the impacts of it. They told me that they're working on lobbying Washington about how those tariffs would negatively impact both countries. And then going back to workforce, there seemed to be a consensus that the immigration crack-down and sort of the increased hostility towards the Latino community in the U.S. is likely going to result in workers from Latin America who are in the U.S. right now deciding to leave prematurely over fears of deportation or other consequences like that. And I think that that's going to be a bad thing for MROs in the U.S. because there's been quite an increase in U.S. companies tapping Latin America for qualified technicians due to our own workforce shortage. And the CEO of MRO Iberoamerica said that if manufacturing of aerospace parts leaves Mexico and moves back to the U.S., those types of jobs would compete with technician jobs and that would exacerbate things further. And then one last thing on the workforce as well that I thought was interesting that I had not heard of yet was that apparently European companies are now also “poaching” technicians from Latin America due to their workforce shortage. And it sounds like they're providing a lot of better transition assistance and benefits that are more competitive than the U.S. is offering. So it will be interesting to see what happens there, especially if there's continued trade wars and whatever else between the U.S. and Latin America.

Lee Ann Shay: That is a lot to think about and interesting about workforce because as you've covered extensively, there's already so many challenges. So Lori, anything on the tariffs that you wanted to mention?

Lori Ranson: Yeah, I walked around the floor and talked to a few people about the tariffs, and the general consensus is with Mexico and Canada, it's a negotiating tactic. And once the administration gets what it wants, then tariffs won't happen, which I found interesting. But China is a different story, and I talked to someone about China, and the U.S. sees China as its economic competitor and economic threat. And so the tariffs on China are likely to stick, and we don't really know what's going to happen in terms of the effects of those tariffs. But overall, I talked to someone else who explained that all of this tariff talk, all of these tariff threats could affect air traffic in the long run. And if air traffic is affected, the aftermarket will be affected because aircraft will fly less. They will require less maintenance and overhaul. So I thought that was an interesting point that someone made to me, and I've been really thinking about that a lot. Just the effects and the threats and the rhetoric coming from the administration and how that could affect propensity to travel and propensity to travel to the U.S.

Lee Ann Shay: That's an interesting point, and you're right, there's such a domino effect in our industry because it is so interconnected, even just the supply chain. Switching gears a little bit, Lori, you cover airlines extensively. What stood out to you?

Lori Ranson: So I talked with Copa CEO Pedro Heilbron, and I thought he made some news. They're going to expand their three-bay hangar in Tocumen that they opened in 2019. They do their own heavy maintenance there. So they're planning to start construction, I think, by the end of the year. And the reason that they're doing that is because MRO capacity still remains very tight in Latin America and for cost savings. I think that he said with heavy maintenance they have 25-35% cost savings doing their own heavy maintenance. And I thought that was pretty impressive. They're also bringing some engine work in-house, I think some light engine work, and I think it just illustrates that MRO capacity around the world is tight, both from a physical standpoint and from, as Lindsay said, a technician standpoint. So I see that a lot of airlines in the region are opting to expand their own maintenance capabilities. While we were at the conference, Viva in Mexico, it's a ULCC in Mexico, announced that they were going to be building a maintenance facility in Queretaro. So I think this is a trend that's interesting, and when I think about this because technicians are so tight, are MRO and airlines going to be competing for the same pool of talent? I'm not sure, but I started thinking about that when I see all these airlines that are expanding their own maintenance capabilities.

Lee Ann Shay: Lindsay, you are our workforce expert. Any additional thoughts on that?

Lindsay Bjerregaard: The perspective that I've heard from companies at MRO Latin America this year and previous years is it sort of differs by country. So some countries, particularly further down in South America, they don't have as many of those competition issues because they're obviously not as close to the U.S. It sounds like certain countries like El Salvador or Mexico tend to experience that a little bit more, especially if they have workforce that is a little bit more fluent in English. So it really depends. But I think Lori brought up an interesting point, which was there's a lot of efforts that we're seeing now with companies building up more of their own capacity. One of the things that was talked about quite a bit this year was that there's growing MRO demand in the region. Companies are attempting to build up more capabilities and sort of reverse to some degree the offshoring trend that's been happening in previous years.

So for instance, the forecast talked about some interesting things. There's around 55% of Latin America's MRO contracts right now being outsourced to regions like North America and Europe. That accounts for around $2.4 billion worth of work. And a large proportion of that is engine work with some discussion about how only two of the Top 10 engine overhaul providers in the world are in Latin America. And I know last year at MRO Latin America, there was talk about how the region can build up more internal engine capacity. So it sounds like there are a lot of companies that want to do more with collaboration to attempt to build up more of this capability in-house. But it's going to take time, it's going to require new facilities, workforce training initiatives. And somebody brought up that MROs need to start planning further ahead because, for instance, some operators in North America are already presenting 5-10-year plans for maintenance. So if they're going to ever get ahead of this, they really are going to have to look further down the line.

Lee Ann Shay: Absolutely. And I think the engine point that you both brought up is very interesting. Since our first MRO Latin, we've had discussions that there's not enough engine maintenance capacity in the region. That comes up every year. But I think a nuance to that now is that especially for engines like the CFM56, which are very modular, in the last several years we've seen more module swaps, more engine hospital visits. Those lighter checks that are easier to start with, opposed to a full engine overhaul. So I think that probably will be a good way for the region to start getting more local engine maintenance capability. Last question. Were there any surprises?

Lindsay Bjerregaard: Some of the stuff that Lori covered was surprising to me in terms of some of these airlines building up new maintenance facilities or planning new hangars. It was the first I was hearing of some of that. And then beyond that, I think a lot of it just goes back to the geopolitical situation. I was surprised to hear that some of these companies are not worried at all about, for instance, that the FAA drug and alcohol testing policy, because at least here in the U.S. we have organizations like ARSA arguing against that policy. They said that there are legal issues with us trying to enforce our laws on other countries. I think they've called it “a solution to a problem that does not exist.” So I was, I guess, pleasantly surprised that that's not yet reason for the Latin America region to be mad at us, I guess. So those were I guess my biggest surprises.

Lee Ann Shay: Yeah, when I saw your story that you filed, I was very surprised by that one, too. Lori, how about you?

Lori Ranson: So I'm not quite as entrenched in the MRO world as you all are, but I was surprised that airlines and MROs still face challenges in data sharing. Someone from Copa made an interesting point. He was saying that Copa can do a turn, a heavy maintenance turn, in a certain amount of hours, and an MRO can do it in a certain amount of hours. Sometimes Copa’s turn times are better, and he would like to share that information, and he would like to get information from the MRO as to why perhaps that company's turn times are longer. But it just doesn't happen. The information sharing doesn't happen. And, to me, that was surprising because there was so much talk about technology at the conference and the use of technology. Lindsay had a great AI panel, and it's just amazing to me that we're focusing on these tech advances, but at the same time, we can't even share information. So that's what stood out to me. I was sort of intrigued and surprised by that.

Lee Ann Shay: OK. I've got to just follow up that with a question. Lindsay, from the technology standpoint, was it mostly about implementation of AI, or were there talks about how technology is improving processes to make it more efficient, cut turn times?

Lindsay Bjerregaard: Think it was a mix of both. And obviously that data sharing question tends to come up in every technology panel. And I forget which panel it was, but there was definitely some interesting talk about companies talking to each other about potentially pooling data, which could help particularly with things like AI, where it needs access to as much data as it can get and good data to actually be really effective. So in terms of the Latin American region, specifically both with the technology issue, with building up new capability, with workforce, it sounds like there's an attitude that they are almost using this particular moment with the geopolitical issues with the U.S. to sort of band together and say, “OK, well if you're going to do that to us, we're going to build up a much better MRO environment and ecosystem here. So we're going to take advantage of that.” And it will be very interesting to see what happens there.

Lee Ann Shay: Absolutely. Well, Lindsay and Lori, welcome back from Panama, and thank you so much for your insights. And a special thank you to Andrea Copley-Smith for producing this episode. That's a wrap for the MRO podcast, at least this episode. Don't miss the next one by subscribing to the MRO Podcast wherever you listen to them. And one last request. If you're listening in Apple Podcast, please consider leaving us a star rating or writing a review. Thank you so much and have a great day.