How can MRO/CAMO support airline profitability during and after the corona crisis
The Corona crisis has pushed the airline industry to its limits, directly affecting the liquidity. Nevertheless, the crisis offers some opportunities to re-position airline’s maintenance strategies, not as cost-generating processes, but as a carefully designed, efficient and lean structure that may add value to the overall profitability.
During the Corona crisis and during any crisis whatsoever that puts airlines on the position of having to safeguard their liquidity to all costs, maintenance professionals face a fundamental contradiction on how to plan their next steps. On one hand, the maintenance processes are very cost-intensive and tend to be minimized to the absolute minimum required, in order to avoid or reduce negative cash flow. On the other hand, the sudden ramp-down or in the worst cases, the complete shut-down of airline operations, gives the opportunity to conduct all pending-, deferred- and planned maintenance tasks with the objective of having a well-maintained fleet, once operations start again.
The current pandemic crisis, catastrophic as it is, also offers some opportunities in all the stages of airline processes and organization. The maintenance process is no exception. Regardless of the maintenance tasks that are still needed or mandatory (which represent the absolute minimum), there are many administrative, planning and restructuring opportunities that can be addressed during these unpredictable times. Opportunities to turn your maintenance organization from firefighting mode to the management by exception mode with full control of the decisions' costs. This process, of course, requires good planning, considering the available resources in different phases of the crisis and the targeted short-term operations, in order to adapt to the respective context.
We have adapted our standard MRO assessment to the current context, in order to identify opportunities for our customers and partners. We offer you the following advice:
1. Identify the pain-points during “normal” operations:
Our approach is normally focused on identifying business processes health checks and the pain-points because it gives an indication about the weakest links in the process landscape and value chain. Addressing the weakest links offers the opportunity to prioritize which topics are to be tackled with the limited resources available. Some areas of improvement that we normally observe in the maintenance processes are:
- Lack of synchronization of line maintenance processes with ops (and other key processes)
- Inaccurate ETR’s (Estimated Time of Repair) that directly impact different scenarios during Day of Ops
- Inefficient material planning, inaccurate material availability, and flow data.
- IT- tools, business processes and interfaces not parametrized correctly to fit in the specific context of the airline’s operation.
- Unclear roles and responsibilities, duplications in the business processes of the different groups and reporting structure.
- Lack of decision-making rules.
Right now is a good time to start thinking about addressing these (or your particular) issues. When the operation starts to ramp-up in a couple of months and with the correct planning, some of the idle time of your organization’s champions can be used to improve these areas.
2. Address your efficiency:
Do you have a clear and measurable concept of efficiency for your maintenance structure? If not, this is the right time to do it. The ramp-up of operations after suffering such massive impacts after the crisis will be hard. Cost-awareness and efficiency will be key for your airline’s overall financial health and only the strongest (the most disciplined) will be able to thrive in the near future.
Start by defining a lean and clear concept for efficiency. Every airline and every maintenance structure has its own particular way of addressing everyday business, which is why you need to think ad-hoc to your reality (and the new reality after the crisis). We suggest considering (among other aspects) the metrics that your airline already uses for measuring overall efficiency. For example, if your airline strongly relies on OTP (On-Time Performance), you should be aware of how to measure the impacts that an inefficient maintenance process has on the overall OTP. Think about the impact of unreliable planning or not releasing AOG (Aircraft On Ground) on the projected ETR within a tight flight schedule. Focus on efficiency is not complicated if you focus your efforts on the essential.
3. Assess your maintenance strategy:
This might be even trickier to achieve in times where the workforce is on obligatory leave or has reduced the percentage of official work, but it might be key if the pain-points that you identified (see advice no. 1) are of structural nature. One of the most usual problems highlighting a problem with the strategy is the way you are doing your maintenance planning. If you are constantly reacting instead of proactively managing your maintenance process, then you might check your overall strategy. The focus on cost optimization and how the maintenance structure impacts the overall financial health of the airline needs to be part of your objectives.
Particularly during and after this crisis, it is of key importance to re-check the strategy according to probable new fleet setups and network changes (which will come with absolute certainty). A jumpstart of the maintenance strategy because of fleet management adjustments is a perfect opportunity to think on how to include better forecasting and planning processes, in order to improve proactive approaches towards profitability, directly from the maintenance structure.
4. Synergy of your maintenance set-up:
Now that operations are running to the minimum or completely stopped, it is the right time to work on synchronization of the maintenance activities with the new operational, network and fleet management set-ups. Work to convert from the current competitive way of working to the synergized effort of OPS and maintenance.
All these advices require proper planning according to the resources available. We suggest considering all of them and prioritize your actions according to your operational reality and the new situational context during and after the Corona crisis. Regardless of how the specific roadmap looks for your organization, it is important to be aware of the significance of cultural and mindset change. It is possible, especially during times of crisis, to start working proactively in all levels of the maintenance organization and getting rid of all “firefighting” old ways.
For further details please contact:
Besides MRO/CAMO, we also offer support in the areas of ops control, network planning and customer experience to help your airline navigate through the challenging times due to the Corona crisis. We have several experts with up to 40 years of real airline experience, who steered world-leading airlines through many crises. We are also sure that this is not the last crisis to come and that every airline should be best prepared – something that we can help you with.
Interested in a free online conference, where some of our experts will share their crisis experience with you. Join one of our next sessions!