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MRO Challenges: Shortages Hamper Canadian Operations

Talk to helicopter MRO shops in Canada, and the people in charge will tell you that business is booming.


July 5, 2007
By James Careless

Topics

Talk to helicopter maintenance, repair, and overhaul (MRO) shops in
Canada, and the people in charge will tell you that business is booming.

“Because
of the upswing in the Canadian helicopter industry, the big repair
shops are totally oversubscribed,” says Peter McDonald, director of
maintenance at Hayes Forest Services in Duncan, BC. Although Hayes’
primary business is providing helicopter services such as logging,
firefighting and construction, the company’s MRO facilities serve third
party clients as well as its own fleet of Bell 206s and Sikorsky
S-61Ns. “We’ve been picking up the overflow of repair and overhaul work
from them.”

Despite this boom, many Canadian helicopter MROs are
not operating at full capacity, McDonald says. The reason: An ongoing
shortage of people and parts is limiting how much work these MROs can
perform.


THE LABOUR SHORTAGE: GETTING SERIOUS

The
shortage of skilled MRO technicians is not new. But the shortage has
now become serious enough to restrict MROs in the amount of work they
can take on. “This year’s been a real eye-opener for the industry,”
says McDonald. “It’s really hit home how difficult it is to find
trained people. Now, when we have an upswing in demand from our
clients, we are limited in how much we can take on.”

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“It’s
getting harder than ever before to find good staff,” agrees Hugh
Andrews, president of Aero-Smith Heli Service in Coombs, BC. “We’re
fortunate in that we’ve got good people who’ve been with us for the
past five-six years.”

Why is good help so hard to find in the
helicopter repair sector? According to McDonald, one reason is the
decline of in-house training programs. “Over the last 25 years, the MRO
industry has moved away from traditional apprenticeship programs in an
effort to cut costs,” he says. “Unfortunately, this has led to the pool
of trained technicians drying up.”

As well, young people are
being attracted to different kinds of work than they were 20 to 25
years ago, he adds. True enough: There was a time when aviation
technology was in the forefront of the public’s imagination, along with
the professions that kept it flying. Today, that romance cachet has
migrated to computer technology. Add the Canadian public’s prejudice
against manual labour as a career choice – so much so, that industry is
actively trying to change this bias with image-boosting advertising
campaigns – plus the desire of today’s youth for high-paying jobs right
out of school, and the aerospace MRO industry has taken a real hit.

Besides
restricting the amount of work that MROs can take on, the law of supply
and demand has dealt another nasty blow to the industry. Specifically,
as the supply of trained technicians gets smaller, those who remain
have been able to win higher wages for their work. “The two go
hand-in-hand,” explains Dick Everson, president of Alpine Aerotech in
Kelowna, BC. “If you’ve got high demand and lower resources, the result
is high competition for resources.” In this case, technicians with the
right resumés have the leverage to push up their current salaries, or
move to MROs willing to pay them more. The result is “that pay has gone
up 25% over the past four to five years,” McDonald says. The only good
news is that “increased wages have convinced many retirees to come back
and put in a few more years to boost their retirement funds.

“I personally know several technicians in their late 60s and early 70s who are back at work.”


WHERE ARE THE PARTS?

Skilled
technicians are not the only prized commodity in short supply for
helicopter MROs. Parts and components are also hard to find. “For
instance, it can take up to a full year to get a $150 main rotor pin,”
says Andrews. “Now, it’s not like we change main rotor pins every
decade. We replace them every 1,200 hours, which can work out to
annually for some helicopter operators. That’s why such a delay can
ground helicopters for months.”

There are many reasons why
helicopter parts are in short supply. One reason is the ongoing war in
Iraq: To keep flying, the US military needs lots of parts, and
helicopter manufacturers and vendors are more than willing to give
priority to such a high-volume customer. A second reason is market
forces. According to Andrews, “China is buying a lot of
aerospace-quality raw materials these days, which has cut into the
supply for everyone else.” He adds that when it came to predicting
future demand for parts a few years ago, “manufacturers didn’t forecast
properly.” In other words, they didn’t expect demand for parts to be as
high as it now as, and thus manufacturing capability has not kept pace.

So
what can a helicopter MRO do to keep his customers flying in such
circumstances? One solution is to order parts today for planned
maintenance due to be done months or even years in the future. To
accomplish this, “we try to coordinate our orders with our customers’
needs,” says Andrews. “We’ve also learned that ‘the squeaky wheel gets
the grease’. If you make enough noise, you stand a better chance of
getting what you need sooner from suppliers.”


STAYING ALIVE

Proactive
parts ordering is just one way that Canadian helicopter MROs are coping
with current market realities. While doing so, they are trying to keep
prices down by becoming more cost-effective in what they use and more
productive in what they do.

On the personnel side, providing
higher wages, good working conditions, and jobs where technicians get
to go home after 5 pm – rather than spending their lives on the road –
are helping to keep talented people on the shop floor. “We are also
working with the BC Aerospace Industry Association and their strategy
for attracting young people to aviation maintenance,” says McDonald.
“This is why we do a lot of ‘job familiarity’ events with local high
schools, and are developing an inhouse training program at our company
for new hires.”

This said, the Canadian helicopter MRO industry
continues to have a tough time in balancing parts and labour shortages
with its customers’ need to get their aircraft in and out of the shop
as quickly as possible. In the future, the first problem should ease as
parts manufacturers ramp up production to meet demand. However, it may
require even higher wages and better benefits – and a lot of positive
brand-building on TV, radio, and the Web – to bring a lot of new blood
into the industry.


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