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Asian aviation reaches new heights
THIS year's Singapore Airshow will take place against the backdrop of a booming global air transport market. Passenger traffic is strong and many airlines are reporting strong profits. In fact, industry trade group Iata forecasts that the global airline industry will generate profits topping US$38.4 billion in 2018 (up from US$34.5 billion in 2017). Asia-Pacific airlines are set to contribute US$9 billion of the 2018 global profits.
Aircraft orders are at record levels with over 13,000 airplanes currently on order from the world's airlines. The aviation industry's supply chain busily delivers new aircraft such as the A320neo family, Boeing 737 MAX, A350 XWB and Boeing 787s to airlines across the globe regularly. There are just over 29,000 air transport aircraft in service with the world's airlines. ICF forecasts that over the next decade the in-service fleet will reach nearly 39,000 aircraft - an annual growth of 3 per cent.
Hot market: Asia-Pacific
Asia Pacific is a particular strong spot for aviation with air travel in China, India and South-east Asia thriving. With over 8,500 aircraft in service in Asia and a large backlog of orders, Asia-Pacific is set to become the largest regional fleet in the world, overtaking North America. Airlines such as Lion Air, IndiGo and AirAsia Group have hundreds of new aircraft on order. This is great news for passengers in Asia and excellent news for the aerospace manufacturing and maintenance supply base. The latter will capitalise on making and maintaining the freshly delivered aircraft.
ICF forecasts the Asia-Pacific fleet will reach over 13,500 aircraft by 2027 - representing a strong annual growth of 4.8 per cent. China, with a current fleet of 3,800 aircraft, is set to reach over 6,000 aircraft by 2017. As for Lion City, there are approximately 200 aircraft in service with operators based in Singapore and a further 200 aircraft on order. Changi Airport welcomed over 62 million passengers in 2017. Each week, about 7,200 flights land or depart from Changi and the airport is positioning itself for the future with its third runway and plans for Terminal 5 already underway.
Asia-Pacific is the number one generator of maintenance, repair & overhaul (MRO) spend, with roughly 30 per cen of global air transport MRO originating from the Asia-Pacific airlines. ICF forecasts that total MRO spend in the Asia-Pacific will double to approximately US$41 billion in 2036. In fact, Asia-Pacific will overtake North America over the next few years to be the world's largest generator of aircraft maintenance spend. This is encouraging airlines, manufacturers (OEMs), MROs and logistics companies to invest in MRO capability in the Asia-Pacific particularly in China, Indonesia, Philippines and Vietnam alongside existing centres of excellence such as Singapore. Ultimately, the boom in regional aircraft orders and maintenance requirements also means more skilled jobs for engineers, pilots, mechanics and supporting industries.
E-enabled aircraft at the gate
A particularly exciting development in aviation is the arrival of e-enabled aircraft. Indeed, technology is changing how we communicate, work, socialise and travel. Smartphones, tablets and laptops allow us to remain connected to family, friends and work wherever we travel. People book flights with smart devices, check-in for flights through an app and, increasingly, use Wi-Fi onboard aircraft. Just as the on-board passenger experience keeps us in touch and entertained, airlines and suppliers are taking advantage of technology to make aircraft more reliable, keep flights on time, manage costs and reduce their environmental footprint.
The latest generation aircraft such as the Boeing 787, Airbus A350 XWB and Bombardier CSeries feature systems that measure the performance of the aircraft at every stage of the flight. The aircraft health monitoring system (AHM) provides data often in real-time illuminating how the aircraft is performing - including whether there are any issues that need to be rectified immediately.
While approximately 4 per cent of the world's active fleet of aircraft is e-enabled today, ICF forecasts that approximately 47 per cent of the fleet (over 18,000 aircraft) will be e-enabled by 2027. As the connected fleet grows and service offerings mature, ICF sees operator maintenance increasingly benefitting from advanced big data analytics. The heart of the debate centres on the form the analytics takes, who performs the analysis and who owns the data. The arrival of highly connected aircraft allows for the measurement, storage and transmission in-flight of more data from aircraft engines, airframes and systems than ever before.
The benefits offered by aircraft health monitoring are varied. ICF expects the majority of savings to come from improvements in dispatch reliability, reductions in parts inventory and better pre-and post-flight departure maintenance troubleshooting. The potential is for at least US$3 billion plus in industry wide savings. In fact, the benefits are only just starting to be understood.
To fully achieve the potential benefits that AHM offers, operators will need to go beyond just monitoring the aircraft and predicting when parts will fail. Maintenance will need to be further integrated into an airline's operation. If AHM can predict when a part will fail, the airline's scheduling department needs to be able to efficiently utilise this information to minimise disruption to the operation.
Information from aircraft health monitoring systems should enable airlines to make better-informed decisions such as whether to cancel or delay a flight or substitute another aircraft instead and of course perform the proactive maintenance. Health monitoring provides airlines with valuable time to make better decisions. Consequently, the industry is moving towards a prescriptive maintenance principle where data analytics works to prescribe maintenance activities based on the best outcome. The aim: to turn an unscheduled and unexpected event into one that can be scheduled around the normal airline operation.
For prescriptive maintenance to work optimally, though, OEMs and regulators need to continue to evolve current maintenance practices. For instance, even if a system monitors oil levels and pressures during every part of the flight, the maintenance manual may still require a mechanic to visually inspect the oil level. The reduction of such activities through AHM will enable airlines to reap the benefit of quicker aircraft turnarounds and the reduction of some labour intensive activities.
It won't be long before the increasing amount of data that can be used to optimise an airline's operations will become too much for humans to handle. Rapid advances in Artificial Intelligence (AI) will unlock a future in which an AI will assist humans with how to run an airline in the best possible way. The main benefactors: people.
Key supplier considerations
E-enablement is arriving now. AHM capabilities are advancing and the benefits are being better understood. Suppliers are preparing for the implications that AHM will have on their business bottom lines. Engine OEMs are well aware of the benefits of increased time-on-wing which drive increased profits given that many of their engines are on maintenance programmes. System OEMs offering their own maintenance solutions can also drive reliability improvements into their products by better understanding how rotables perform in-flight. AHM offers the chance to reduce frustrating and unnecessary line removal of components.
Yet, there's still more work needs to be done. For instance, antiquated airline IT systems need to be improved to take advantage of what is being offered and the benefits to the end-user more clearly communicated. It is necessary to further consider how AHM is likely to influence your business and the role you will play as the market evolves. The time to act is now.
- The writer is principal at ICF.