Labor Shortages, Inflation, and Sustainability Issues Will Challenge MRO Recovery According to Oliver Wyman
NEW YORK, April 25, 2022 /PRNewswire/ -- Aviation maintenance, repair, and overhaul sector (MRO) spend will approach
"The MRO industry has displayed remarkable resilience during the past two years, but it may not be enough as it faces a new set of challenges around labor, inflation and sustainability," said Brian Prentice, a partner with Oliver Wyman.
The need for pilots is well known, but another critical segment of the industry could keep planes from flying. A lack of technical staff was cited as the top disruptor for the MRO industry over the next five years. Some
COVID brought about a wave of retirements and fewer new people are entering the industry. While apprentice programs and technical school partnerships continue to work well as traditional recruitment tools, it is not enough to combat the overall talent shortage.
Survey respondents ranked labor/material cost management as the second top disruptor facing the industry. Some
"In an inflationary environment with a tight labor market, MROs over the next few years will be looking for any way to offset labor and material costs," said Derek Costanza, a partner with Oliver Wyman. "To complicate matters, the industry will be trying to do this when consumer travel demand is rebounding rapidly."
Almost all (
Despite the industry's commitment, most sustainability concepts are still in the early stages. The most widely used strategy is recycling, followed by measuring greenhouse gas emissions and reducing direct material inputs. Overall, the industry expects sustainability to become a required cost of doing business rather than a pricing differentiator. But sustainability is also impacting talent recruitment and retention efforts.
"At a time when the concept of how and where people work has radically changed, MRO leaders need to engage and attract a new generation of workers -- who value quality of life and are very concerned about climate change. It will be a tough sell," concluded Prentice.
The report concludes with five things the aviation MRO industry must focus on moving forward, including: a clear outlook on future labor plans, creative ways to attract and retain talent, mitigating cost increases, increasing labor efficiency, and meeting customer and investor sustainability demands.
In its second decade, the annual Oliver Wyman MRO survey is an industry standard that samples the attitudes and strategies of executives from across the aviation industry, as they address key trends and emerging issues in the maintenance, repair, and overhaul sector. In this year's survey, we focused on the continuing challenges of labor shortages, cost management, and sustainability. As always, we leveraged the latest Oliver Wyman Global Fleet and MRO Forecast to provide additional insights.
Oliver Wyman is a global leader in management consulting. With offices in more than 70 cities across 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a business of Marsh McLennan [NYSE: MMC]. For more information, visit www.oliverwyman.com Follow Oliver Wyman on Twitter @OliverWyman.
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