Maintenance, Repair, and Overhaul facilities, known in the vernacular simply as “MROs” are a major gear in the cog which keep airplanes in the air safely and reliably. But what exactly goes into an MRO? Or more broadly, what are the different types of MROs and MRO business models, and how do they differ?
Major airlines
The segment of the civilian MRO market which has the biggest market share of mechanics and technicians, with roughly 66% of aviation technicians working for commercial airlines.
There is no specific business model for MROs owned by commercial air carriers because they exist solely to support the fleet of their owner. These monstrosities are generally located at an airline’s major hub in such a way that it is advantageous to the organization as a whole.
MROs owned and operated by airlines provide all services from minor repairs and servicing, to isochronal inspections, to full-scale depot-level overhaul and repair.
Regional airline MRO facilities
Regional airlines abide by the same federal standards as their larger brethren regarding inspection and repair cycles, both abiding to 14 CFR Parts 91, 119, 121, 125, 129, 135, and 136 standards in the U.S.
Repair and inspection costs are not dramatically different between the aircraft used by regional operator’s vice those used by major airlines, and while profit margins for regionals tend to be slightly higher than the majors, their infrastructure budgets are not as deep and often their fleets are smaller.
These smaller outfits have become creative in mixing and matching services to stay in the black for maintenance and repair costs. Many regional carriers even breakdown repairs on systems (i.e., engines, avionics, etc.) and contract between in-house work and subcontracted work by the level of maintenance required. Line checks and minor isochronal are often performed by airline employees at airline-owned maintenance centers, while higher-level repairs are sent on to large, contracted repair centers.
In-house Corporate flight departments
Private jet ownership is very costly, and smaller organizations which desire private jet travel often opt for chartered services. To provide a baseline, it is still cheaper to charter flights for up to $30,000 per flight sometimes than to own and operate the same private jet.
The benefit of this model is that maintenance staff are on hand 24/7 to work issues and get the aircraft serviceable. The downside is the cost of supporting this staff, the facility, and the cost to own the fleet.
Taking a closer look at MRO business models
The second installment in the MRO series is going to be a deep dive into business models used, support infrastructure for each, investments and venture capital acquired for start-ups and growth, and how each level of MRO can scale up. Also, we will explore the ever-present pitfalls which claim so many casualties in the aviation market