Will North American re-fleeting reduce its HR-related challenges?

With almost 45% of all global retirements over the next ten years forecasted to come from North America, the region’s commercial aircraft fleet is expected to undergo a significant makeover. However, while the overall fleet growth is limited to 0.6%, the replacement rate has serious implications for MRO providers, especially as concerns the demand for appropriately trained technical personnel. Despite the fact that the changing fleet composition in the U.S. implies slower MRO growth, the HR-related needs within the segment are still in need of careful planning. 

According to TeamSAI, the North American commercial fleet of 7 300 in-service aircraft will continue to be the largest regional fleet over the next ten years. Nevertheless, as the region is expected to experience minimal traffic growth over the period, its commercial fleet is forecasted to grow by as little as 1.1% (to 7 720 aircraft) annually by 2019 and only 0.6% (to 7 940 aircraft) annually by 2024. Such an insignificant growth is explained by the fact that while North America is expected to receive 23% of global deliveries (3 735 aircraft) over the period, 2 979 of the current North American in-service baseline fleet is expected to retire. Therefore, up to 80% of the ten-year deliveries in North America are anticipated to be for replacement. 

Such dynamics naturally influence the environment in the MRO market. As aircraft designed and built between the year 2000 and 2010 will represent up to 25% of the North American fleet in the upcoming ten years’ time, the demand for training associated with the new types is expected to rise accordingly, adding significant pressure on the training providers, especially considering the global shortage of the aviation maintenance workforce.

Nevertheless, the latest survey conducted by the Oliver Wyman consultancy agency doesn’t support the conventional position that the supply of skilled labour in the US has weakened. In fact, 33% of North American MROs reported being able to find multiple candidates with minimal recruiting, and 34% said they had no troubles finding an adequate supply of candidates with intense recruiting. The ones indicating a shortage of candidates accounted for only 33% of the respondents. In comparison, Western European respondents, despite less workforce expansion, have previously reported a more challenging hiring environment, with 39% finding “few” candidates, even with intense recruiting efforts.

“New generation aircraft do represent a major technology shift, which makes the case for changes in equipment and training required to support the newer platforms, especially as concerns such works as composite repairs. However, the newer aircraft will actually require less maintenance than the old ones at least for some time. For instance, as concerns airframe maintenance, the intervals between checks will increase significantly due to an increased use of modern design solutions on the new models,” says Kestutis Volungevicius, the Head of FL Technics Training. “At the same time, the retirement of aircraft delivered in the 1970s and 1980s allows to forecast a relatively fast decline in the need to support older technology structures and components. What this means is that while the demand for appropriately qualified workforce will grow, there is still time to fill this gap. However, there are other, more pressing HR-related issues that the Northern American MROs have to address.”

Despite the somewhat mixed picture in relation to hiring, the American MROs still face the challenge of replacing the retiring workforce. According to the U.S. Bureau of Labour Statistics (BLS), most of the upcoming demand for new workers will stem from the need to replace those retiring or leaving the profession. Within the 2012 and 2022 timeframe, the BLS estimates that there will be 25 400 job openings for aerospace engineers, 35 600 job openings for aircraft mechanics and service technicians, and 4 000 job openings for avionics technicians. At the same time, as the gap in labour rates between North America, Asia and the Middle Eastern countries to narrow, the North American MROs are starting to seize the opportunity and repatriate a large share of maintenance works, which could generate up to 5 000  jobs in the U.S. 

“The repatriation trend is accelerating, and there are early clues that the bubbling repatriation trend may create an imminent squeeze on the stateside labour supply. The current workforce is aging with limited incentives for younger generation, which leads to the question of who will perform the actual work. Currently over half of the American MROs employ technical specialists who are aged between 46 and 55. As this generation ages into retirement, the maintenance facilities in the U.S. will require an infusion of qualified mechanics to meet the steadily growing demand for onshore technical services. Thus, while repatriation represents a significant growth opportunity for the local MROs, it still requires careful planning,” concludes the Head of FL Technics Training.