As the Asia-Pacific MRO segment picks up so far in 2022, Collins Aerospace is planning for the region’s long-term recovery. Martin Williamson, the company’s managing director, Asia-Pacific customer and account management, details how it is navigating regional challenges related to supply chain, cost and extended lockdowns in China.
Being in Asia-Pacific for several years, what are Collins’ observations of the region’s MRO market?
During the years before the pandemic, Asia-Pacific was experiencing strong growth in aviation and, with that, the demand for MRO services in the region grew as well. However, when COVID-19 happened, much of the industry was exposed to its effects and we saw a dramatic slowdown of the MRO market, but we took that opportunity to pivot into ways we can help our customers navigate through the pandemic, and at the same time innovate and explore other streams of business.
The post-COVID recovery has been encouraging and we’ve also seen some shifts in platform utilization, like the return of the Airbus A380. On the other hand, we have experienced challenges in our supply chain. Nonetheless, our MRO businesses have almost reached pre-COVID levels, and our other businesses are also experiencing growth. Analysts are expecting recovery by 2024, but there are many factors we need to consider such as developments in the geopolitical and supply chain situations. We are always learning, and the key is to be flexible and able to react to constant changes.
How has the Asia-Pacific MRO market reacted differently coming out of the pandemic? How have demand and requirements changed?
I think the market learned a lot of valuable lessons and had opportunities coming out of the pandemic to help them build greater resiliencies into their businesses should it happen again. For example, airlines are now working more closely with their MRO service providers for better forecasting and strategy to ensure efficiencies and more rapid response times to external changes. MRO companies are committing more resources to innovate new ways to increase productivity, reduce costs, mitigate employee health and safety risks within their facilities, and customizing solutions for customers where required. We’ve seen that airlines are still consolidating and monitoring passenger demand as we come out of the pandemic, and we are working together with them to monitor the situation and are much better prepared to react quickly to changes. In addition to the focus in driving cost, airline operations are also focusing on the total cost of ownership. For MROs, predictability in cost of ownership will be a key value add for the airlines.
What are your immediate and long-term priorities as Asia-Pacific managing director?
In the near-term, we will be focused on working with our customers in their recovery from the pandemic and remaining flexible in meeting their requirements for solutions and sustainment. We also understand the importance of customer intimacy and intend to work diligently on strengthening our direct relationships with airlines and air forces throughout the region, meeting frequently and exploring how best we can focus our efforts on providing the best support.
From an MRO perspective, we will be looking to provide better lead times and turnaround times with the expansion of our activities through localization, partnerships and cooperative programs. We’ll also continue to help our customers digitally transform their MRO operations through innovation and the implementation of advanced technologies with the work we’re doing at our Singapore Innovation Hub. In line with the recent global difficulties surrounding supply chain, we will be evaluating opportunities for sourcing products from close proximity to our customers.
For the longer term, we are working to provide our customers with a companywide response which encompasses our total range of products, solutions and services, tailored to meet our customer’s needs. We will also be focusing our efforts to advance sustainability-enabling technologies, such as alternative power sources, the connected ecosystem and advanced structures to address both short- and long-term solutions to help achieve our industry’s carbon reduction targets.
Facing inflation and supply chain disruption challenges, how does Collins remain nimble in the region that is so fragmented in terms of policies and regulations?
We’ve established a strong local presence and sourcing capabilities in countries throughout Asia-Pacific to minimize our exposure to evolving market and trade forces. We’ve also worked closely with our customers to better understand their needs for more accurate forecasting on demand and requirements. Internally, we are meeting more regularly for scenario planning with various departments within the organization to discuss the situation and explore options to ride through the challenges. I think it’s important for all stakeholders, including customers, business partners and suppliers, to work even closer together to help each other through these uncertain times and be enriched from the experience.
How exposed is Collins to China’s closed borders and zero-COVID policy?
We’ve been fortunate to have had a long and established presence in China over the past 40 years, with 1,000 employees at 15 locations within the country itself. This has helped mitigate our exposure to the country’s closed borders and zero-COVID policies in providing services. We also collaborated closely with customers to replace face-to-face meetings with online videoconferencing sessions with our teams outside of China. As an example, our engineering teams have supported qualification and certification activities remotely through Zoom meetings for the COMAC C919 aircraft program during its final stages towards certification. Our supply chain business in China has also been performing well to overcome the challenges during this period, and we managed to achieve this by working closely together with our customers and suppliers to navigate through the challenges and achieve common success.