march2021 - 28

SPECIAL FEATURE

high running hours remaining on an engine or other high-value
part before needing an overhaul. Airlines are swapping those onto
aircraft currently in use, thereby deferring the maintenance. This
demand erosion could lead to larger threats to the operations of
smaller aftermarket providers.
However, the overall impact on aftermarket services could be
lower since the number of flights may not mirror the decrease in
passenger traffic. For instance, in 2020, the number of flights was
down 58% year-over-year, compared to a 66% decrease in passenger
traffic during the same period.10 While passenger traffic is expected
to increase by 50% in 2021,11 the number of operating flights may
experience a steeper increase. Most airlines may see reduced spending on fleet maintenance due to smaller operating fleets. However,
they may also experience incremental maintenance expenses as
they delay new aircraft deliveries and retain older aircraft. Moreover,
for aftermarket services providers, the conversion of passenger
jets into freighters could further extenuate their business impact.
In 2021, the boom in e-commerce could increase the demand for
such conversions, helping aftermarket providers offset losses from
reduced passenger flights.
Aftermarket service providers should capitalize on this lower
demand period to improve operations and prepare for the next
growth phase. By investing in and deploying digital initiatives,

companies in the aftermarket space could realize benefits across
inventory management, product quality and operations.

Industry to Focus on Supply Chain and
Building Digital Capabilities in 2021
Since the aerospace and defense (A&D) supply base is not homogeneous, the crisis will continue to affect suppliers differently, depending on whether they focus on commercial aerospace manufacturing
or the aftermarket. Suppliers that rely primarily on the commercial
aftermarket are expected to experience lower volume for the next
couple of years due to reduced flying hours, a glut of used serviceable material and inventory destocking.
However, the industry should likely take advantage of the pandemic and drop in demand to transform their supply chains to make
them more resilient and build digital capabilities. Transforming aftermarket services by leveraging advanced technologies will be the key
for aftermarket providers. For instance, using advanced analytics,
predictive applications, and digital platforms to proactively monitor
customers' maintenance needs and drive customer engagement;
leveraging augmented reality/virtual reality (AR/VR) to reduce the
need for on-site technicians as trivial maintenance, repair and overhaul tasks are likely to be managed virtually or with minimal on-site
staff, further improving field service efficiency.

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MARCH 2021

AIRCRAFT MAINTENANCE TECHNOLOGY

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march2021

Table of Contents for the Digital Edition of march2021