MROs Rethink Network Footprint and Parts Access as Geopolitical Tensions Strain Global Supply Chains
Why It MattersHeavy reliance on US-originated engine intellectual property and components exposes maintenance providers worldwide to political access risk, pushing a shift toward regional parts pools and deeper in-house repair capability.
Speaking at Aviation Week's MRO Europe in Amsterdam, executives from Lufthansa Technik, AFI KLM E&M and HAECO said geopolitical tensions are prompting maintenance, repair and overhaul (MRO) providers to rethink where they locate capabilities and capacity.
David Doyle, vice president corporate strategy at Lufthansa Technik, said airline and aftermarket forecasts show strong growth, but airline CFO sentiment is not high at the moment. Fuel-price volatility, geopolitical risks and economic uncertainty are hard to model and can drive costs higher, especially for big-ticket items. Lufthansa Technik has begun examining its own network and its exposure to American OEMs. Doyle noted that about 50% of the MRO market is engines, with Pratt & Whitney and GE prominent, so a large amount of intellectual property and supply chain serving Europe originates in the U.S. He said that if access to IP and parts were switched off, MROs worldwide would have an issue, and that over the past 12-18 months access has become a tool in geopolitical discussions between the EU and the U.S., and between the U.S. and China.
As an example of bottlenecks, Doyle said Lufthansa Technik is struggling to obtain a GE Aerospace CF34 bearing because the part is also used on the TF34 military turbofan and other military engines. The bearing flows first to U.S. military engines, leaving commercial customers' engines waiting for months for parts. He suggested Europe needs a supply chain producing some of these parts free of U.S. military demand.
Peter van Helden, senior vice president of component product at AFI KLM E&M, agreed on the IP and parts-access concerns, which are pushing the MRO to develop deeper parts repair, and advocated independent MROs working together to guarantee IP access. Klaus-Peter Leinauer, senior VP corporate sales Europe, Middle East and Africa at HAECO, said geopolitical unrest, especially in the Middle East, is affecting the efficiency of the global logistics network, and that decisions can no longer be made purely on an optimization basis. This is driving MROs to establish parts pools in certain regions and make different choices about where repairs are done.
