The more aircraft there are in the air, the more maintenance, repair and overhaul (MRO) activity is required on the ground. It’s why one of the spin-off benefits of Ireland’s aircraft leasing success has been the growth of the MRO industry here, most of it concentrated at Dublin and Shannon airports.
Notwithstanding current short-term supply chain issues resulting from a shortage of component parts, the auguries are good. According to UK aviation analytics company Cirium Ascend Consultancy, some 45,900 new passenger, freighter and turboprop aircraft are set to be delivered between now and 2043.
“Rises in disposable income result in increased demand, and both China and India are growing markets,” explains John Cotter, professor in finance and chair in quantitative finance at University College Dublin.
That bodes well for Ireland’s MRO sector which, in 2020, was estimated to account for 2,600 highly skilled jobs directly and 4,500 jobs overall across the economy.
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In recent years the sector has seen a number of global players expand their presence here, including Panasonic Avionics which opened its European MRO centre in Dundalk in 2019 and quickly grew it from 6,000sq ft to 23,000sq ft, tripling its workforce.
Two years ago Lufthansa Technik Turbine Shannon (LTTS) announced the expansion of its business in Ireland with the opening of a new 2,000sq m engine parts and accessories repair facility in Shannon.
The announcement came hot on the heels of the launch of Lufthansa Technik’s Mobile Engine Services facility in Kildare, supporting airlines and aviation leasing companies from Ireland and across the EMEA region.
Home grown hero Ryanair has also been beefing up its in-house MRO capacity. In 2022 it opened its first aircraft heavy maintenance facility in Ireland at Shannon Airport, an investment of €10 million that led to 200 licensed engineer, mechanic and support staff jobs.
The 5,220sq m, three-bay facility is designed to support fleet growth at the airline and was quickly followed by the announcement of expansion plans at Ryanair’s aircraft maintenance facility at Dublin Airport. The airline has applied for planning permission to construct a state-of-the-art four-bay hangar there, representing an investment of €40 million.
When complete, it will facilitate the heavy and line maintenance of Ryanair aircraft at Dublin Airport as the airline grows its fleet to 600 aircraft with the delivery of the more efficient new 737-8200 “Gamechanger” aircraft, which carry 4 per cent more passengers, burn 16 per cent less fuel and emit 40 per cent less noise.
The airline is scheduled to take delivery of up to 29 new Boeing 737 aircraft in 2025 alone, representing a $3 billion investment. However, objections now withdrawn by Aer Lingus delayed the opening of the new facility, originally scheduled to be in operation in the first half of this year.
As far back as 2016 the National Civil Aviation Development Forum flagged that one of the biggest barriers to the future growth of MRO capabilities in Ireland was the lack of appropriate hangar infrastructure.
An Indecon report in 2020 reiterated this, while at the same time underlining the importance of industry training programmes to the sector’s continued success.
Difficulties in recruiting and retaining qualified staff, the cost of skilled labour, and price competition from international competitors in the MRO market were flagged as challenges to the sector, alongside the cost and availability of suitable hangars which, the report confirmed, was likely to become a significant constraint in the coming years.
While Covid stalled growth somewhat, those hangar constraints are now being felt. With the number of aircraft in the sky only going one way, that’s a worry.
“The aviation industry is expected to add approximately 45,900 new aircraft worth about $3.3 trillion over the next 20 years,” says Elizabeth Bowen, director of Aircraft Leasing Ireland.
“Of these, a significant portion will be financed through leasing arrangements, reinforcing the role of lessors in supporting airline growth and aircraft leasing companies’ continued investment in the latest technology aircraft.”
Growing MRO capacity to meet such growth is of critical importance.
By its nature the global MRO market is mobile, which means attracting customers to Ireland is just a flight away. By the same token, not having the capacity to sell MRO services from Ireland means airline customers can just as easily move their business to another country.
