Podcast: What To Expect At MRO Americas 2022

Aviation Week’s editorial team previews the upcoming MRO Americas 2022 event, highlighting trends they are expecting to see at the show as well as what’s new.

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Rush Transcript

James Pozzi:

Welcome to Aviation Week's MRO podcast. I'm your host, James Pozzi, MRO editor for the Emire regions, and today I'm joined by three of our preeminent US based experts on the aftermarket to preview the upcoming MRO Americas events, which will take place in Dallas, Texas from April 26 through to April the 29th.

James Pozzi:

Joining me today are Lee Ann Shay, Aviation Week's, executive editor for MRO and business aviation, Lindsay Bjerregard who is managing editor MRO, aviation Week, and Sean Broedrick, Aviation Weeks' senior air transport and safety editor. Welcome one and all.

James Pozzi:

Lee Ann, we'll start with yourself. From my perspective outside of the America's region, obviously being based in Europe, in London, I see certainly in North America particularly a region that has maybe fared better in terms of recovery than much of the world over the past year. And I'm thinking maybe in terms of domestic recovery and the pickup in passenger traffic there across the region. It seems like there's a lot of positivity around from airlines that I speak to and MROs associated with that region who are now looking forward with growth back on the agenda. But what are you seeing in north America, and what do you think maybe some of the big themes and news will be from the upcoming event in a few weeks time?

Lee Ann Shay:

Thanks for hosting James and thanks for having us all. Regarding the recovery, you're right. The recovery is going pretty well domestically. Traffic has been pretty consistent and a lot of the airlines saw a surge actually in bookings in March.

Lee Ann Shay:

However, the workforce issue both on the pilot side and other staffing is causing airlines to cancel some flights. I know we're going to be talking about workforce later in the podcast, but other than workforce, I would say some of the big trends I think that we will be talking about a lot at MRO Americas include supply chain, and that's including what's happening in Ukraine, in Russian, those disruptions. But overall, because of the pandemic we were having supply chain issues so now that there's another layer to this, inventory planning, MROs, OEMs, suppliers, distributors all are having a little bit of, well, they're all being affected so I think that'll be a big theme.

Lee Ann Shay:

Sustainability, I think will be another theme, but not probably as prominent as supply chain and cargo conversions. New serviceable material. I would say that those would probably be my top. Oh, and I'd say partnerships too. There's always a change in partnerships and whether it's going to be straight out M and A, or joint ventures or partnerships. I think we'll see some more activity on the partner side.

James Pozzi:

Certainly be interesting to see if that gets moving this year, the M and A market, because I think that maybe didn't materialize at a pace predicted maybe at the beginning of the pandemic into last year. So it'd be interesting to see whether that does pick up and more of the partnerships come there.

James Pozzi:

Sean, from your perspective, what trends are you currently seeing in the region and what are you anticipating from MRO America in a few weeks time?

Sean Broderick:

Sure, James. Well, Lee Ann touched on I think several of the big ones. The most interesting ones from my standpoint are how the two acute gusts of headwinds that we've come across in the last few months, the one being the war in Ukraine, and the second one being the rise in fuel prices, is going to impact maybe not so much fleet planning, because that's a really long term. It's a really, really big picture issue, but more retirements, USM, and asset values.

Sean Broderick:

On the one hand you had say, round about a thousand aircraft that are in Russia, that were part of the supply chain ecosystem or Western built aircraft that is, in Russia that needed to be supported, and they're not being supported now because of the sanctions. That adds a little bit of a wrinkle to both supply chain in terms of parts going in, and also the potential of aircraft coming out and feeding the use serviceable material pipeline. I mean, it's a blip. It's a thousand aircraft out of whatever your, depending on what your definition of the global fleet is. Call it 30,000. It's small blip, but it's a blip.

Sean Broderick:

Fuel prices are another one. In North America, I think if you look at IATA's spot fuel pricing, I think they would show right about now that the fuel prices have risen about 30% or something in the last month and 150% in the last year or so. I think the numbers are right about now in North America, so that's changing of course, as fuel goes up and down. But that recalculates how long you want to run a previous technology aircraft, or an older generation aircraft.

Sean Broderick:

But on the other hand, again, as Lee Ann said, demand has come back so strong and the OEMs are not at the, especially in the narrow body side, are not at the production rates where they believe they can be in terms of what the customers want, so that could create a near term crunch in terms of lift. You could have airlines flying airplanes they don't have necessarily want to fly, or calculating whether they can fly these less economical airplanes factoring the new fuel prices. Can they fly them or should they sell them to support airplanes that are clearly going to be in demand, again especially on the narrow body side.

Sean Broderick:

Another one I'll be looking at because it's a personal interest of mine is the regulatory landscape. Always affects any certificate holders and of course in our world, it's mostly the 145s. The FAA has really faced a tremendous amount of pressure in the last couple years, mostly coming out of the 737 Max saga. A lot of new emphasis on oversight, both on the certification and the surveillance side. They haven't been getting a tremendous amount of new resources. I mean, they are hiring some people, but the amount of effort they're having to put into surveillance and oversight these days, I think it's safe to say that it's more than it was three years ago because of the things they're being asked to do and the things that they are deciding they are going to do.

Sean Broderick:

I'm always curious how that affects certificate holders down the line. People underneath, smaller than the OEMs, the kind of people that are right in our wheelhouse, the repair stations and the parts suppliers. Like to talk to them and see if they're seeing any delays in their certification projects or any additional wrinkles they didn't expect from the regulators. Are they seeing consistency across the board? Places with multiple locations. We hear it all the time that a FSDO in one part of the country may not be consistent as a FSDO in the other part of the country. That's what I'll be looking at.

James Pozzi:

Absolutely. In that summary, there's a lot going on in the region, certainly.

James Pozzi:

And Lindsay, over to you. What are you seeing or anticipating from MRO Americas, perhaps, maybe in some of the areas you cover regularly, maybe around workforce, for example. What are you seeing Lindsay?

Lindsay Bjerregaard:

Great. Well, thanks, James. Yeah. Workforce is a big area for me. Before I get into that, I'd love to share a couple of stats about the show that I got from our events team. They told me the exhibition is sold out, and there's going to be more than 800 companies exhibiting. To put that into context, that is more than double from 2021 and very close to the level we had in 2019. So, things are starting to get back to normal. We're going to have a big show. We'll have representatives from all 50 states as well as 86 countries so it is going to be a busy show.

Lindsay Bjerregaard:

Then one of the big things that is workforce related that we're going to see this year at MRO Americas is the triumphant return of the aerospace maintenance competition. That's been canceled two years in a row due to the pandemic, and it is going to be returning to the show floor. If you're not familiar with that event, it is one where we have teams of MRO professionals from commercial industry, general, and military MRO maintenance training schools and they compete in more than 25 maintenance events to see who's able to do their jobs the best.

Lindsay Bjerregaard:

Some of the sources I've spoken with have told me that there are going to be five or more all female teams this year, as well as 29 school teams and then international teams from Canada, Brazil, Egypt, and India. A fun fact about the competition on the workforce side here is that many airlines actually use it as a two day hands on interview. A lot of student competitors have actually been hired at the event. Then speaking of hiring, there's actually going to be a real job fair happening as well. Nonprofit, AWING, which stands for Aviation Women Inspiring Next Generation is holding a job fair at its booth. Registered MRO America attendees can review job postings on the AWING website prior to the show, and then sign up for 15 minute interviews onsite with hiring managers from those companies. you can find more information about that on AWING's website or on the MRO Americas website.

Lindsay Bjerregaard:

But then speaking of workforce, we do have some sessions related to that. On the show floor, there's going to be the Go Live Theater. On Thursday morning, there's going to be a session about apprenticeship program insights and best practices. Then on Tuesday afternoon in the main conference session area, there's going to be a panel about strategies for building the workforce pipeline. That's going to feature panelists from AAR, Alaska Airlines, Theme and Pratt & Whitney, which I think is going to be a great one.

Lindsay Bjerregaard:

Then another trend that Lee Ann mentioned earlier is going to be sustainability. This year on the show floor, we're going to have our very first sustainability zone where companies that are tackling this issue will be exhibiting their products and services. Then there's going to be quite a few sustainability related conference sessions. On Wednesday there's going to be a panel with speakers from Boeing, Lufthansa Technik, Pratt & Whitney, and Southwest Airlines, where they'll be talking about strategies towards a greener future for aviation. Then on Tuesday in the Go Live Theater there's going to be a full lineup of sustainability related sessions and Lee Ann, I believe you are moderating one of those, right?

Lee Ann Shay:

Yes, I am. It is called Leading the Way in Eco-friendly MRO. And we've got execs from Haiko, Rolls Royce, GA Telesis and Embraer.

James Pozzi:

Absolutely. It's just becoming obviously such a key topic now, and it appears with increasing regularity in every event we do, events scheduled. On the panels, Lee Ann, obviously over the course of the week, I think we're all moderating at least one panel each. I certainly am. I'll be doing the supply chain panel on the Tuesday morning with representatives from AFI, KLM, AGW, Republic Airways, and Embraer. That does promise to be a good one based on the conversations I've had with those panelists so far. But start with the self Lee Ann. What panels are you moderating over the course of the week and what will you be covering?

Lee Ann Shay:

Thanks for the question. Before I answer that, I think it's an important housekeeping thing to point out to our listeners that the conference sessions are a little bit different this year. Usually the MRO Americas conference is Tuesday, Wednesday, Thursday, and this year it's just Tuesday and Wednesday and MALMS, the military logistics conference is Wednesday, Thursday. But, as Lindsay mentioned, the Go Live Theater is on the floor. These sessions are free and open to anybody. You just walk onto the exhibition area and we have a robust Go Live group of sessions, and those are Tuesday, Wednesday, Thursday. That's how like the conference content will be spread out so make sure you check the schedule for that.

Lee Ann Shay:

Back to your question, sorry. I am moderating a geopolitical effects panel on Tuesday morning, which we recently added due to the Ukraine war, and the sustainability panel on the Go Live floor and USM, used serviceable material, which should be an interesting topic.

James Pozzi:

Sure. And how about yourself? What panel sessions will you be moderating over the course of the week at MRO Americas?

Sean Broderick:

I have the honor of hosting the OEM panel, the aftermarket side of the OEM world. So GE, Pratt & Whitney, Airbus and Boeing are invited. Hoping to talk to them about two main things. One of them is going to be a theme, I think, emerging theme across the entire event. That's the effect of the war on supply chain and manpower. I say manpower, because Boeing, for example, had a bunch of not just engineers, but customers support team members in both Ukraine and Russia that are no longer working so some interesting ramifications there.

Sean Broderick:

The other thing I wanted, I'm trying to extract, I will try to extract out of them is the specific challenges that they are working on, responding to their customers needs. All sorts of different pain points coming out and opportunities coming out of the downturn. I'm just looking to see where the OEMs sit on the aftermarket support side and the specific challenges they are trying to solve for the customers. Hoping to get specifics, not generic answers like supply chain out of each of them, because I'm sure it's an issue so we'll see how it goes.

James Pozzi:

Excellent. And Lindsay, how about yourself? What are your moderating duties covering MRO Americas?

Lindsay Bjerregaard:

I'm the going to be rounding out the last conference session on Wednesday afternoon. It's about new tech in MRO and I'm going to have panelists from Theme, Pratt & Whitney, GE Aviation and Salesforce. We're going to be discussing which MRO technologies we think are going to be taking off this year, technology projects that their companies might be undertaking, where they're expecting the greatest return on investment. With that lineup, I'm certainly expecting some discussion about digital technologies. I think Theme is doing some interesting technologies on the workshop floor. Pratt & Whitney and GE Aviation obviously have all sorts of different, interesting repair technologies, so I think it's going to be a good panel.

Lee Ann Shay:

Can I add this? I think it's important. On the first day, there's also going to be an airline round table with United Airlines, Avelo Airlines, and FedEx. Then later in the day, there will be the popular state of the airline sessions with Southwest Airlines and FedEx. So lots of airline speakers throughout the day, but want to shout out to those in particular.

James Pozzi:

That's all we've got time for today. Thank you for your contributions and if you're joining us at MRO Americas, we look forward to seeing you at the event. Join us again in two weeks for the next MRO podcast. Make sure you don't miss it by subscribing to Aviation Week's MRO podcast in Apple podcasts, Google podcasts and Spotify.