2010 TeamSai Global MRO Forecast 180419

download 2010 TeamSai Global MRO Forecast 180419

of 21

  • date post

    10-Apr-2018
  • Category

    Documents

  • view

    216
  • download

    0

Embed Size (px)

Transcript of 2010 TeamSai Global MRO Forecast 180419

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    1/21

    TheGlobalMROForecast2010 2020

    Presentedby:

    ChrisDoanChairman&CEO

    2010TeamSAI,Inc.MROAmericas2010Conference

    Bullsvs.Bears

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    2/21

    TEAMSAI20104/20/2010

    1

    SignsofRecoverySurfaceItWontBeEasyorImmediate

    Thestormseemstobeclearingslowly!

    U.S.Airlinesseesignsofa

    nascentindustryrecovery

    butthat

    they

    will

    maintain

    costandcapacitydiscipline

    fornow

    Source: ATWDailyNews(3/10/10)

    AirbusandBoeing

    announceintentionto

    increasethe

    monthly

    productionrate

    A320familyand787

    Source: AviationInteractive(3/10/10)

    FAAscalesbackrecovery

    predictions

    annual

    aviation

    forecast

    revisedtoreflectaslower

    demandrecovery

    Source: AviationDaily(3/10/10)

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    3/21

    TEAMSAI20104/20/2010

    2

    GlobalMROspendwillbedown7.5%in2010,to$42B

    Thedriversofthechangeareimportanttounderstand

    Fleetchangealonedrivesa4.2%

    drop,duetocapacityreduction

    Utilizationdropdrivesmarket

    downfurther(down9%fortheyear)

    Airframe,component,andline

    costshave

    fallen

    bringing

    the

    marketdownanother1.4%

    EngineMROdrivesa1.6%increase

    Andlast,laborrateshaveeased

    downeversoslightly

    FirstaReviewoftheMRODriversfor2010

    newdeliveries=$1,833M

    +1,128a/c

    stored/retired =$(3,751M)

    783a/c

    Fleet2009 + Deliveries Retirements Stored Fleet 2010

    19,330 +1,128 399 384 19,675

    Thenextlogicalquestion areweatthebottomyet?

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    4/21

    TEAMSAI20104/20/2010

    3

    AreWeattheBottomoftheDownturn?

    Whiletheworldfleethascontinuedto

    grow,newlessmaintenanceintensive

    aircraftareshowingtheirinfluence

    Thecontribution

    of

    the

    older

    vintages

    has

    been

    indeclineasretirementshaveaccelerated

    Andtheyoungervintageaircrafthave

    significantlylowerunitcosts

    In

    just

    2

    years

    time

    there

    has

    been

    a

    significant

    shiftintheshareoftheyoungervintagefleets

    Asaresult,theaverageMROcostperaircraft

    peryearhasfallen

    2008 $2.4M

    2010

    $2.1M

    2010shouldbethetippingpointasfleet

    sizeandutilizationincreasetomeet

    demand

    Sothesimpleansweristhatwethinkso!

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    5/21TEAMSAI20104/20/2010

    4

    TheBearShouldGiveWaytotheBull

    $45.7$42.3

    $50.1

    $65.3

    2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

    MROForecast

    7.5%+4.4%

    Understandingtheyearisimportant;understandingthedecadeisimperative

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    6/21TEAMSAI20104/20/2010

    5

    Populationgrowthandtheburgeoningmiddleclassiswhatisdrivingourlong

    termforecast

    Fleetgrowthforecastat3.3%CAGRto27,303in10years

    ASMgrowthwillincreaseat5.1%CAGRoversameperiod

    Unita/cutilizationratesremainhigh

    Largeraircraft

    %

    more

    seats

    Longerroutes

    LongTermFleetGrowthStillLooksSolid

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    7/21TEAMSAI20104/20/2010

    6

    MROIndustryOutlookhasContinuedShifttotheRight

    Globalgrowthisexpectedtomaintaina

    4.4%CAGRthrough2020

    $42.3B

    industry

    will

    grow

    to

    $65.3B

    over

    10yearforecastperiod

    2010down7.5%from2009

    Engineremainslargestsegment

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    8/21TEAMSAI20104/20/2010

    7

    AP CH IN ME LA&C EE

    $6.6 $2.4 $0.6 $2.4 $1.9 $1.8

    16% 6% 1% 6% 5% 4%

    5.3% 9.6% 9.4% 5.3% 6.6% 9.8%

    NA WE AF

    Market($B)(2010) $13.9 $11.0 $1.5

    Mkt Share(2010)

    33% 26% 4%

    CAGR(201020

    1.6% 3.6% 3.5%

    NorthAmericaisExpectedtoRecoverMoreSlowly

    thantheRestoftheWorld

    $0.0

    $2.0

    $4.0

    $6.0

    $8.0

    $10.0

    $12.0

    $14.0

    $16.0

    $18.0

    NA WE AF AP CH IN ME LA&C EE

    2010

    2020

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    9/21TEAMSAI20104/20/2010

    8

    LookingattheRegionsCombinedShowRelativeParityinTenYearsTime

    $0.0

    $5.0

    $10.0

    $15.0

    $20.0

    $25.0

    Americas Europe Asia Middle East Africa

    2010 2020

    Americas Europe Asia Middle East Africa

    Market($B)(2010) $15.8 $12.9 $9.7 $2.4 $1.5

    Mkt Share(2010)

    37% 30% 23% 6% 4%

    Note: Americas=NorthAmericaandLatinAmerica&theCaribbean

    Europe=WesternandEasternEurope;Asia=AsiaPacific,China,andIndia

    CAGR(201020) 2.4% 4.7% 6.8% 5.3% 3.5%

    Mkt Share(2020)

    31% 31% 29% 6% 3%

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    10/21TEAMSAI20104/20/2010

    9

    MidtermGrowthinNorthAmericawillbeSlow

    LimitedaircraftareslatedforNAoperators

    Allfleetclassesexpectedtocontractinnext5

    years

    Negative1.2%

    CAGR

    from

    2010

    to

    2015

    Thenapositive2.2%CAGRfrom20152020

    Operatorsareunlikelytobringbacksome

    parkedaircraft

    Tightenedcapacityisexpectedtoprovide

    thedisciplineNAairlinesneedtobring

    thembacktoprofitability

    NAmarket

    growth

    largely

    mirrors

    change

    in

    fleet

    MarketisweightedtowardNBbecauseofits

    relativesize

    NorthAmericasMROespeciallyinfluencedbyfleetdecline

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    11/21

    2010TeamSAI,Inc.

    Trendsand

    Strategies

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    12/21TEAMSAI20104/20/2010

    11

    AirlineFinancialResultsIntensifiestheCOSTFocus

    Profitshavebeenelusiveinthelast

    decade

    Oneprofitableyear

    Net$56.8B

    in

    cumulative

    losses

    Thequestforprofitabilitydrivesbusiness

    behavior

    Revenuefocusedinnovationisevident

    Costimprovementsareneededateveryturn

    ForMROvaluestream,thismeans

    Motivationtowardbestvalue

    Outsourcingwill

    continue

    to

    grow

    Supplychaininnovationwillbeimperative

    Preparingforanewgenerationoftechnology

    Consolidationwillbeimportanttovalue

    creation Valueorientedinnovationwillberewarded Source: IATA and Energy Information Administration

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    13/21TEAMSAI20104/20/2010

    12

    TheTransformationoftheValueStreamRepresentsaDramaticShift

    TowardBestValueInnovations

    Airline/Operator MRO

    Labor

    keydecisionguidelinesforchoosingmaintenanceservices/outsourcing

    Material Turntime Performance Quality

    Engineering

    TechnicalServices

    SupplyChain

    Planning

    DirectMaintenance

    Airlinewill

    managecoreoperations(flying)

    outsourcemaintenanceasit

    chooses,basingoutsourcing

    decisiononkeyguidelines

    M&E

    Customerservice

    Scheduledservice

    CoreOperations

    Planning

    Marketing

    Etc.

    focus: cost

    MROmust

    identifynewmarketneedsand

    valueadded

    services

    that

    supportairlinerequirements

    reinventthebusinessmodelto

    positionitselftomeetneeds

    developbusinessprocessesto

    optimizeservice

    focus: value

    Theairlinesunrelentingfocusoncostcontinuestodrivechange

    NewValueStream

    Engineering

    TechnicalServices

    SupplyChain

    Planning

    DirectMaintenance

    M&E

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    14/21TEAMSAI20104/20/2010

    13

    OutsourcingContinuestoGrowandExpand

    0%

    20%

    40%

    60%

    80%

    100%

    HMV Check En ines Components Line Tech Support

    Global North America

    Note: OutsourcedMROincludesworkoutsourcedtoindependentMROsortoOEMsbutnotworkdonebyoperatoraffiliatedMROs

    Benefits

    Providestotalcostadvantage

    Offersmoreflexibilitytooperators

    Shiftrisks and

    costs

    away

    from

    airline

    GivesindependentMROsopportunitytoform

    crediblenetworkwithextensive capabilities

    Regulationcouldtemperoutsourcinggrowth

    somewhat,butlargeplayerswilladapt

    Airlineinterestinoutsourcingalignswiththeirdesiretoseekoutbestvalue

    TechnicalSupportServices

    Includesallbackofficefunctions suchas

    engineering,planningandsupplychain

    Early stagesof

    the

    emergence

    of

    Tech

    Services

    outsourcing

    Lately,largercarriersarerecognizingtheleverageof

    outsourcingtheseservices

  • 8/8/2019 2010 TeamSai Global MRO Forecast 180419

    15/21

    TEAMSAI20104/20/2010

    14

    SupplyChainInnovationRepresentsSignificantOpportunity

    MRO

    Airline/Operator

    OEM

    Considerations

    Airline Provider

    onestopshop

    obsolescence

    management

    notasresponsive

    asinhousestock

    income

    statement

    interestpenalties

    sharedstock

    arrangementsare

    new

    arrangements

    partoffull

    servicestrategy

    extensivelogistics

    networks

    ensuring

    availability

    variety

    of

    partsoperatorPMA

    policiesvary

    OEMsinbest

    positiontooffer