APRIL 13TH, 2015
Oliver Wyman MRO Survey: New Aviation Technology Could Dramatically Change MRO Competitive Landscape Shifting or Reducing Industry Revenue By Up To $15B
MIAMI—(BUSINESS WIRE)—By 2020, most companies in the aviation maintenance, repair, and overhaul (MRO) sector will use new technology in a way that fundamentally changes how the industry works, cutting or re-distributing industry revenue by 15 to 20 percent.
Oliver Wyman released its annual MRO Survey today at Aviation Week’s MRO Americas Conference. This year’s survey, which queried more than 100 senior aviation executives, investigates the business impact of innovation and new technologies coming on line.
MRO providers need to invest in new capabilities over the next few years as manufacturers deliver next generation aircraft and engines with new technology and services.
According to results of the survey, the use of big data in the aviation industry will become pervasive, with the rise of aircraft health monitoring and predictive maintenance systems. The way MRO providers touch the aircraft will also change with wearable and other new repair technologies and additive manufacturing (3-D printing). (See chart on MRO technology priorities below). Meanwhile, most aviation companies will have to manage overhauls of their aging IT backbones that inhibit efficient working environments and integration with newer technologies.
Lead survey author and partner Chris Spafford anticipates these advances could spawn new business models. He says, “These technological advances could amount to a redistribution of up to 20 percent of value among current industry players, or $10 billion to $15 billion, and entice new, non-traditional competitors to enter the MRO space to siphon off high value revenue opportunities.”
To compete as technology changes, MRO providers will have to overcome their own reluctance to innovate. Seventy-six percent of survey respondents said their organizations have clear visions and growth strategies, but most gave their companies failing grades on the ability to translate identified opportunities into executed operational plans. (See the chart MRO innovation below).
Disruptive change will challenge managers to think beyond standard practices and commit time and resources to choose technologies and develop supportive business models. Within MROs, there is a need for clarity, purposeful analysis, and opportunity selection to capitalize on innovation.