Podcast: What Three Topics Dominated MRO Europe?

Aviation Week MRO experts James Pozzi, Sean Broderick, Lindsay Bjerregaard and Dan Williams share their observations and insights gained from the 25th edition of MRO Europe which took place this week in Amsterdam.

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Rush transcript

James Pozzi:

Welcome to Aviation Week's MRO Podcast. In this episode, we'll be getting insights from Aviation Week's MRO Europe event in Amsterdam. I'm James Pozzi, Aviation Week's MRO editor for the Amir region, and I'm here with my colleagues Lindsay Bjerregaard, Sean Broderick, and Dan Williams. Lindsay is managing editor for MRO, Sean is Safety Transport Editor, and Dan is our senior manager of Fleet Flight and Forecast Data. Lindsay, Sean, and Dan, welcome.

Lindsay Bjerregaard:

Thanks, James.

Sean Broderick:

Good to be here.

Dan Williams:

Thanks for having me.

James Pozzi:

Sean, we'll start with you then. What are some of the key takeaways you've seen over the last day or so from MRO Europe? What has grabbed your attention?

Sean Broderick:

So it’s the 25th year that we've done this, and anybody that's been to more than about two or three, will notice that we usually have the same, you find the same panels. There'll always be a USM same panel, always be a forecast panel, but even more so than I think usual, well, the thing I noticed this year is every panel migrated into discussing the three biggest topics in the industry: supply chain, workforce and more now, the newest one, I think is sustainability. No matter where we started, something would always lead the panelists into discussing those challenges. And we even had panels on those things.

Within that, the most interesting thing to me is when... I don't cover a lot of sustainability, I don't. So I tend to look at things like the net-zero 2050 as something that's maybe going to happen, kind of like Boeing's next airplane and it's way out there. And it's an airline thing, it's not an MRO thing. So when people start talking about what the MROs are going to do to be more sustainable, I roll my eyes and they say, "Oh, they're going to recycle cans and they're going to do what everybody else does." Well, what's becoming more clear to me, and maybe I'm late to the party on this, is that the airlines and their sustainability plans, they're going to dictate what all of their partners and suppliers do. And the MRO, the aftermarket folks are some of the biggest ones.

And so not only do they have to have the British Airways Chief Technical Officer, he laid it out. He said, "Listen, we expect our partners to have a sustainability plan." And then Air France, KLM, Ben Moreau, talked of airlines not thinking twice about fairing a wide body halfway around the world for a heavy check. And so before where it was always about cost, right? Cost is what drove all the airline decisions. The sustainability seems like it's really going to be right in there. And if you're an MRO provider, instead of having your spares pools at the nearest hub so you can get it anywhere in the world, in the region in four hours, you really need to have it where the airline needs it because they're watching how much CO2 is emitted to get the part from where it is to where the airline needs it. And that to me is really interesting and really going to be a fundamental change in the MRO business long before 2050. So that to me, the most interesting things that I saw this week.

James Pozzi:

Yeah, sustainability is certainly so prominent in Europe in comparison to other regions, no doubt about it. Lindsay, similarly, what's some of the key things you've seen over the last 24 hours or so?

Lindsay Bjerregaard:

Sure. Well, honestly, I would echo a lot of what Sean said. So I won't touch sustainability so much, but workforce is one that I always pay a lot of attention to. And it seemed like in every panel, whether it was about capacity shortages, inflation, supply chain delays, everything was tying back to workforce issues. And some of the things that panelists were talking about, obviously competition with big tech companies like Amazon and Google and other industries. There was a lot of talk about how the new generation has a lot of different expectations and different plans for their careers. So they're expecting maybe flexibility to work remotely and to not work nights, which is obviously difficult in maintenance. They're also maybe not planning to stay in the same industry for their entire career. They might try something out for a few years and then try something completely different, which for a company that invests a lot of time, money and resources into training them is obviously a real big problem.

And one of the panelists on Sean's panel this morning on workforce even mentioned that a European airline he was talking to said that they lose 80% of their technicians during the training process so that is a crazy number to look at. So a lot of people were talking about ways that the industry could be using technology to do more with less manpower, to work more efficiently. One of the things that I thought was interesting also from Sean's panel this morning, the senior vice president for aircraft maintenance at Turkish Technic argued that raising salaries is not the solution to the workforce shortage, even though we hear that a lot.

He was arguing that salary raises might make people happy temporarily, but then they're benchmarking again the next year. So he thinks that companies need to be ensuring that they're listening to worker feedback on ways to improve maintenance processes, the workplace in general. And he said that Turkish Technic has a system in place where employees can share their ideas for workplace improvement. And he said they get more than 700 entries every year. So obviously there's a lot of interest in that, at least at that company. But going back to sustainability, I echo what Sean said, and actually one of the interesting things that I heard was that aviation week's data forecasts are now incorporating some sustainability factors. So maybe Dan could speak about that.

Dan Williams:

Oh yeah. Thank you very much. Yeah, I echo you both. You are both more learned than I am, and I totally agree. I'll start with sustainability first. I learned a new terminology, which is purple hydrogen, which I hadn't heard of before. So that was an education, and that's hydrogen that's produced using nuclear energy. So that was interesting. So I always like to come away with some new learning. And the other thing is, yes, sustainability. We've been looking at emissions within our own fleet and flight utilization, and we've attached that to our forecast. Newsflash, we add a net 11,000 aircraft into the fleet, there's going to be more emissions. That's a fact. Yes, the aircraft that come in are greener than the aircraft that they're replacing. However, these aircraft are generally bigger, have more seats. So as a result, emissions go up. Fact. Now, this doesn't take into account SAF, and that's a much bigger discussion because another pain point which relates to sustainability is the availability of SAF and that's another road that we need to start moving down.

But on a per seat basis, the emissions figure comes down because of densification of the aircraft, larger aircraft that are more efficient. So you are replacing a 737 next gen or an A320ceo with an A321neo. So it's more seats and it's 20% more efficient on the engines, so therefore the overall seats CO2 emissions comes down. So it's progress. It's still, I'd say a dirty industry, but the reality is it is with the aviation industry is trying to clean up. We are trying to push to SAF. You look at all the OEMs, be the engine, be the airframe, and you ask what they've got on the horizon. And the short answer is we're trying to add more SAF for the engine, and that's it. Yeah, there's the RISE program, but there are possible issues with that. Going back a little bit with the workforce, I think the number of heads is becoming less of an issue.

Something that I've noticed on the floor and within the conference, it's the experience that comes with those people, I think is the biggest. If you lose five people who all had, let's say, 20 years experience that's using crude math, so a hundred years of experience that you have lost out of your industry, how do you replace that? You either have to go and find somebody with 20 years experience who becomes potentially expensive if they're available, or you need to bring on new people, but you need to bring on quite a few more people to train them up to gain some of that experience back. So I think the heads issue, we are still not back at pre-pandemic levels, but we are closer than we have been. We're coming out of that hole. However, the experience hole is still one that needs to be overcome.

Sean Broderick:

Yeah, definitely echo what you say about experience, it seems, I've spoke to a couple of MROs at the show and they've said similar. They're starting to crack maybe getting younger people into the workforce. But yeah, drawing on that experience that maybe they'd lost over the last few years, maybe since COVID or since then due to retirement or whatever, that's a real problem.

Dan Williams:

Yeah, exactly. And especially for these, I say dirty and I'm using air quotes, I know you can't see them on a podcast, these dirty industries, whereas Lindsay says, the people coming into the workforce today want a different life. They want that work life balance that's more towards life than the work balance. And that's difficult to overcome at 3:00 AM on a cold winter's morning when you got a spanner in the middle of an engine that's dirty and greasy, it is not the most glamorous of jobs when you could be sat at home with some of the other companies working in your, I like to call it lounge wear. They're not pajamas.

Sean Broderick:

Can you imagine them being a hiring manager at an MRO somewhere in today's world, and we got a stack of great candidates. That's the good news. The bad news is most of them want to work at home and none of them want to work overnight.

James Pozzi:

Yeah, but how'd you compensate for that? Did you give them more time off? Do you give them cash?

Sean Broderick:

You run line maintenance for an airline. Well, when we were growing up, you didn't have those kind of options. And so you wonder in 10 or 15 years when kids that are 16, 17, 18 realize they have the opportunity to pursue things where they can work from home. Again, 20 years ago, you couldn't do that, 10 years ago. And now you look at it and you say, "Okay, well, I don't want to do that because that means I have to go to this place all the time and maybe I have to work at night and it's cold sometimes." So they choose an entirely different path, not just I'm going to go work in an amusement park or a diesel mechanic, but they're like, "Now I'm going to figure out how to code or something, and I'm going to work in front of a laptop, and so I'm not even going to be an option for this." I wonder if that's a threat in a generation or something.

Lindsay Bjerregaard:

I don't want to talk too much about it, but keep your eyes peeled for upcoming Aviation Week coverage because I do have some plans to write about a company that I know of who's doing some things on that in terms of changing work patterns, and also in terms of maybe doing remote assistance tasks and that sort of thing, allowing some people to do at least some of MRO work remotely from home.

Sean Broderick:

Lindsay, with the plug in staying ahead of the game.

Dan Williams:

Well, Sean, Lindsay, and Dan, thanks for your great insights. I really appreciate it. And listeners, please don't miss the next episode. Subscribe to the MRO podcast wherever you listened to them. And one last request, if you're listening in Apple Podcasts and would like to support this podcast, please leave us a star rating or write a review. Thank you very much for listening.