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C O M M E R C I A L M R O 24 April 2014 AIRCRAFT MAINTENANCE TECHNOLOGY A ccording to various statistics, in terms of develop- ment rates, the aircraft MRO industry in Eastern Europe has been taking the leading role for quite a while now. On the one hand, the ongoing growth presents new opportunities for local MROs as well as global industry players, including OEMs, to further expand their activities worldwide. On the other hand, as the market is still considerably young, it needs constant atten- tion with regard to the quality of the services provided and the specific requirements of the regional aviation industry. W hile it is common to attribute the rapid growth of the $60 million aircraft MRO industr y to the latest boost in the development of the emerging Asian economies, it is hard to ignore the fact that as concerns the recovery of aviation industr y the CIS and Eastern Europe nowadays contribute as much as their larger brothers. Currently valued at a little over $4 billion, the MRO industry in the region is expected to reach around $7.5 billion by 2022, thus lagging only Asia-Pacific and the Middle East in terms of absolute MRO spending growth. "Due to the fact that the Eastern European MRO industry is expected to almost double in value during the next 10 years, it has truly become a place of great opportunities. Therefore, it should raise no eyebrows that recently the region has noticed an increased activity in this sector of the industry," says the CEO of FL Technics, Zilvinas Lapinskas. "The general trends that have been and are expected to continue shaping the air- craft maintenance sector in the region are somewhat similar to the ones that have already been observed globally. "Firstly, most global MRO providers, recognising the poten- tial of the segment, have started the expansion of their opera- tions through the acquisitions of some regional players. In the meantime, OEMs are also gaining an increasing share in the segment, thus adding the pressure on the local independent MROs, who, in turn, are forced to look for various ways to simply survive. However, there are some nuances that make the region different from the others." Customer satisfaction Indeed, despite the fact, that the region is developing rap- idly, the environment is still quite tough for MRO providers. Firstly, this has to do with the overall insufficiency of the MRO infrastructure (e.g. a large number of old hangars), which consequently contributes to the overall negative perception about the work being done in the region. Thus, according to the research done by FL Technics' team last year, over 86 percent of the operators in the Eastern Europe and the CIS are generally or partially unhappy with their current MRO providers. The component-related solutions carry the larg- est opportunity for improving customer satisfaction (over 80 percent of respondents said that they were not fully satisfied with the support), followed by the heav y maintenance works (65 percent), engine support (60 percent), and line mainte- nance services (40 percent). However, it should be pointed out that the latter are mostly being performed in-house or by long-standing partners. "Such dissatisfaction with the services in the segment cer- tainly contributes to the very specific dynamics in the MRO segment of the region. On the one hand, it indicates a very stiff competition among the local MROs, as many carriers tend to change their providers pretty often (short-term contracts currently seem to be dominating the maintenance support segment), and it is difficult to secure long-lasting relation- ships," says the CEO of FL Technics. "However, since more and more global players have started to expand into the region, the local providers are faced with the increasing necessity to improve the services provided, since they have to compete on a whole new level." Eastern European Aircraft MRO Market: In many respects the same but still a bit different Most global MRO providers have started the expansion of their operations through the acquisitions of some regional players and OEMs are also gaining an increasing share in the segment. By Anton Tisov Zilvinas Lapinskas, CEO of FL Technics. FL TECHNICS AMT_24-25_MRO_EasternEurope.indd 24 4/3/14 1:56 PM