April 7, 2020 | International, Aerospace
How Will Coronavirus Change The Aftermarket?
Alex Derber If the ongoing corona-crisis does effect a structural shift in the air transport market, both the production and aftermarket sectors will have to adjust. Much has been made of aviation's ability to weather previous external shocks such as 9/11, SARS and the financial crash, but the present upheaval is likely to outdo all others in its severity, and there is a good chance we won't see demand bounce back as quickly as in the past. In fact, the best comparison may not be with other external shocks at all, but rather with the profound impact that low-cost carriers (LCCs) had upon the established airline sector. Granted, this occurred region by region on a rolling basis over many years, rather than as a discrete global event like coronavirus, but the demand hit to full-service short- and medium-haul operations was huge. The LCCs also prompted significant changes in the MRO market, including: a move away from letter checks to more flexible maintenance programs; a rise in outsourcing and full-service maintenance contracts; and consolidation as larger MRO providers sought to enhance their nose-to-tail capabilities. So, what further changes might be wrought by the present crisis? Much will depend on the extent of the disruption and the demand profile thereafter, but certain tentative predictions can be made. For example: many airlines will probably fail; the survivors will emerge as smaller operations; many older aircraft will retire earlier; and business travel may never recover its pre-crisis highs. For the aftermarket this may mean: more competition for contracts and a need to find greater cost efficiencies; a greater focus on new-technology inspection, testing and repair capabilities, such as for carbon fiber and the latest engines; and a trend towards simpler cabins. Also a fair bet, of course, is that the most significant ramifications of coronavirus for the aftermarket are ones that almost no-one is considering currently. For an in-depth look at the factors that have shaped the MRO market to this point, see the next Inside MRO. https://aviationweek.com/mro/how-will-coronavirus-change-aftermarket