The benefits of MRO consolidation | MRO Network

The benefits of MRO consolidation


The increasing trend of airline consolidation is having a knock-on effect on mergers in the MRO sector. Although there are plenty of challenges when two formerly competitive MRO companies must work more closely, including technical compatibility and cultural differences, the benefits can also be numerous.

“Mergers where complimentary products, services and customers are delivered are clearly positive since they offer good opportunities for growth,” says David Hygate, a director at consultancy TeamSAI. “Where one company has excellent lean processes in place and can transfer these to a less efficient partner then, again, positive outcomes should flow.”

And speaking more specifically about the merger of British Airways and Iberia, he comments: “Airline mergers also present opportunities for airlines to consolidate and grow their own MRO operations as they each feed the other and provide a better platform for winning third party work – BA/Iberia is a good example of this.”

Jose Luis Quiros, commercial & business SVP at Iberia Maintenance & Engineering, explains the immediate impact of this particular merger. “Both MROs are basically complementary, with a minimum overlap regarding capabilities, so we are adding services to the customers of each of the two MROs that they didn’t have prior the merger,” he says. “Merging MRO will allow us to gain efficiency by increasing workload volume, with added value because of the greater leverage at the time when prices and conditions are discussed with suppliers and OEMs.”

Looking more generally, MROs may also begin to see more benefits in working together, particularly given trends such as more airframe manufacturer involvement in the aftermarket. As more independent MRO providers seek to offer full-service contracts to compete, sufficient scale in the MRO’s business is required to handle the risks involved with offering technical services at flat rates over long periods, and thus working in alliance makes sense.

David Marcontell, president and COO of TeamSAI, also sees other reasons for consolidation. “As demand for aircraft – and hence maintenance – from the developing world grows, then we can expect more joint enterprises as countries and companies seek to gain the skills and technology of maintenance. MRO joint ventures continue to be used as trading beads by both the OEMs and major independents.”

For an in-depth look at MRO consolidation, see the upcoming June-July issue of Aircraft Technology Engineering & Maintenance, out soon.

Tagged TeamSAI, BA, Iberia

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