The phenomenon that occurred in Dubai with Emirates EK521 earlier this month, of no lives lost in the collapsed landing gear event on aircraft touchdown, is yet another dark milestone in the fabled life of the Boeing 777 model aircraft. Over the past decades, the improvements in airframe and engine technology have made air travel one of the safest means of transport in the world. However, while the recorded statistics of aviation accidents show that those caused by equipment failure have gone down significantly the human error element remains in focus of regulatory and safety oversight organisations.
Human factors, its study and promulgation to all aviation employees and operators has become mandatory for air operators and maintenance organizations in an attempt to reduce the human error element in aviation accidents.
While the world watches in awe at the events in Dubai with EK 521 we as a small Caribbean nation must remain patently aware of the importance of this industry to our economies and connectivity with the world. Airplanes, airlines and air-transport fuels and supports globalisation, connecting the civilised world and linking societies and economies like no other time in history and is only surpassed by the internet in this feat.
Driven by the significant drop in fuel costs and consolidation, the airline industry worldwide is currently achieving record profitability.
In Caricom, airlines have not shared in that success. The stories of defunct Guyana Airways & Air Jamaica, struggling LIAT and Caribbean Airlines (BWIA reincarnated) spans 75 years of remodeling, re-structuring and state support to date.
Our airlines share a love-hate relationship with customers. They cite national pride in defense whilst the population exhibits vexation and disgust with poor service, rising costs and losses.
Not much has changed. Despite studies recommending consolidation of regional airlines; they chose autonomy and continued to operate in the red. CAL and LIAT still stumble along that path. However, there is a silver lining "in the red" aviation history of the region: the aircraft maintenance sector of the business.
We must refocus on this area, where there is new potential. Consolidating labour, capital, relationships and education in a maintenance repair and overhaul facility (MRO). Using the experience and competence of LIAT, CAL, and other regional talent in a world-class AMO (Aircraft Maintenance Organisation) financially separate from the airlines.
Current commercial MRO demand is US$64.3 billion; with Asia equivalent to North America and Europe in market size and is expected to grow by 4.1 per cent per annum to US$96 billion by 2025.
There is opportunity for the region to harness itself to that growth. Engine and component MRO markets remain the largest segments. Modifications market will see the strongest growth (eg interiors, connectivity) and suppressed commodity prices will slow ageing fleet retirement, growing demand in the airframe segment.
Aircraft maintenance represents about 17 per cent of an airline's cost. A heavy maintenance (C check) on a 737, eight years old can last three weeks and cost upwards of US$1 million.
Imagine a hanger with three 737s, or five ATR Turboprops undergoing repair work simultaneously. The revenue and direct employment potential exists for a profitable enterprise. This can be located at Piarco or Camden. The indirect and catalytic effect around this centre can be thousands of jobs.
Where is the market?
Initially, from CAL, LIAT, Bahamas Air, Air Caribe, then the Latin American and North American fleet. Industry predictions indicate that the world fleet would grow by 26,730 aircraft before 2034 and ATR (72s & 42s) have become dominant in the region. These aircraft will need to be inspected and repaired to keep flying.
Labour rates are USD60-90 (NA) to USD35 in C & S America. Trinidad can compete at US$20-25. We produce a large technician diploma qualified workforce. Focus on an aviation training syllabi, can create labour supply that would keep our rates competitive.
We have logistic efficiencies in our connectivity to suppliers and a transportation network for spares and equipment. ICT infrastructure is strong. The regulatory framework is robust. And there is no product substitution for quality aircraft maintenance.
Enough has been said about our dependence on the hydrocarbon sector....not enough has been done.
Attempts to diversify the economy have been stop start efforts with agriculture, tourism and manufacturing. We need to do more, looking beyond that tripod. Launching tangential service streams. Aircraft Maintenance can be one launch platform. It has worldwide reach and foreign exchange potential.
Everything in aviation is priced in US dollars. We can compete, with price, speed and quality of delivery.
CAL and LIAT share safe history in maintenance operations. We need to build on this legacy of competence and experience and monetise this sectors growth potential.
The Chamber of Industry and Commerce identified this as an area of divestment focus–aviation services–the private sector can step up and invest here, away from comfort zones and into world competing businesses. An MRO can be the next jewel in the crown for one of our conglomerates; either fixed wing or rotary wing the return on investment is attractive.
The University of T&T has in progress an aviation campus geared for aircraft maintenance training and management. The UWI offers an MSc in aviation. From these institutions, the region will glean improved business competencies.
The UTT an entrepreneurial university is constructing its hanger with the potential to advance into a functional maintenance, repair and overhaul facility.
A joint venture among regional stakeholders (LIAT, Bahamas Air, CAL, UTT), can see that facility become the centre for maintenance of the regions ATR fleet, a Caricom business entity. It would create flexibility at CAL for third party work on the 737 and LIAT can reduce cost of maintenance now done abroad. Interregional labor mobility could foster economic relationships.
Our vision 2030 has tangential views that can light up the imagination of our millennial population. Aviation services specifically aircraft maintenance is identified in the government's vision for establishing new economic normals and an area for sustainable growth and diversification.
An MRO can begin a chain reaction that can provide air transportation's financial success which has eluded us for 75 years.
Parissram Jaggernath
via e-mail