Prices of airline tickets stay high as upkeep woes crimp fleets

Singapore Technologies Engineering

21/09/2022 09:32

(Repeats to widen distribution)
    By Jamie Freed
    SINGAPORE, Sept 21 (Reuters) - Labour shortages and supply
chain snarls are making it harder for airlines and lessors to
return airplanes grounded during the pandemic to the skies as
quickly as they would like, operators and maintenance providers
say.
    A global squeeze on maintenance, repair and overhaul (MRO)
capacity is one of the factors contributing to higher airfares
for travellers, as demand has rebounded faster than aircraft can
be made available and costs are rising.
    "Some suppliers are coming out with double-digit escalations
and surcharges," said Mahesh Kumar, chief executive of Asia
Digital Engineering, the maintenance arm of Malaysian budget
carrier AirAsia  CAPI.KL .
    "The airlines keep increasing their fares but that is not a
sustainable business," he added at the MRO Asia-Pacific
conference in Singapore. 
    Complications of that kind mean that just about 110 of
AirAsia's fleet of 200 planes have returned to service, he
added.
    Yet getting the rest back in the air is challenging because
of the scarcity of MRO slots that also drives up their prices. 
    The bottlenecks at MROs have been compounded because
airlines returned planes to lessors at a much higher rate than
usual during the pandemic, which crushed travel demand.
    
    PAINTED INTO A CORNER
    Aircraft switching to a new airline need maintenance checks,
cabin interior changes and livery repainting at MROs that are
often short-staffed after pandemic lay-offs of workers while
facing delays at parts suppliers struggling with similar woes.
    "We've had real issues with the number of paint shops that
can take aircraft and in addition to that, the inability of some
of the paint shops to get some of the specialist paint," said
Robert Martin, chief executive of aircraft lessor BOC Aviation
Ltd  2588.HK 
    "If you've got some logo on the back of the aircraft with
multiple colours, if you are missing one colour, that's a bit of
a problem."
    Now it takes about three months to make the changes required
to shift a narrowbody plane from one customer to another, up
from one before the pandemic, Martin added.
    Hangar capacity and workers were not sufficient to meet
customer demand, said Jeffrey Lam, commercial aerospace
president of Singapore Technologies (ST) Engineering Ltd
 STEG.SI . 
    "The ST Engineering network, we are full and so customers
are always asking for more slots," he said.
    "We have operations in the United States, Europe, China and
Singapore. Apart from China, all of our operations are facing
labour challenges."
    The strong demand is driving up labour costs as MROs compete
for staff and available workers are being asked to do more
overtime, Lam said.
    "We don't want to too much overtime, because you have
concerns around safety and quality," he said.
    "We wish we could add more labour and take on more work. So
we are worried about schedules, redelivery schedules, costs and
all that."
    Lessor BBAM has not had much success getting MRO slots this
winter, leaving out in the cold some airline customers who
sought planes quickly to meet demand in next year's summer peak,
said Patrick Low, its vice president for technical matters.
    "The speed of recovery is really determined about whether we
can get MRO slots," he said. "I think the earliest an MRO is
telling us is, come back June next year, possibly we have slots
for you."

 (Reporting by Jamie Freed; Additional reporting by Anshuman
Daga; Editing by Clarence Fernandez)
 ((Jamie.Freed@thomsonreuters.com;))