Market Research Future reports that the Aviation MRO Logistics market size was valued at USD 2.3 Billion in 2022 and is tipped to reach USD 10.7 Billion by 2032, with a CAGR of 18.60%
Logistics is defined by the Council of Supply Chain Management Professionals (CSCMP) as “that part of supply chain management that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption to meet customers’ requirements.”
So, aviation logistics refers to all the activities that make up and ensure that products and resources being moved at the right time to the correct place by air transportation, passengers, or cargo
Strong travel demand – especially in the Asia-Pacific and Middle East region may be attributed to the expansion of this crucial sector. However, bringing about a stable and robust aerospace supply chain and logistics business can be challenging for several reasons.
Logistics firms are having to deal with changing passenger demands and evolving technology and the space is getting increasingly competitive, where aerospace logistics firms are vying with each other for a larger share of the pie. This has resulted in complexities in the aerospace supply chain processes.
With fluctuating supply chains, aircraft manufacturers are under increasing pressure to cope with order backlogs, although backlogs may mean business potential for aerospace supply chain companies. Crucial though are sourcing and procuring various kinds of metals that are used in aircraft manufacturing, as per fixed delivery schedules.
Realistic and Pragmatic Predicting
Incorrect prediction of demand, inaccurate pricing, design change, environmental concerns, and political upheavals can cause disruptions to the supply chain which have far-reaching consequences. Therefore, as a precautionary measure order placing and purchase can be done in a staggered manner – monthly, quarterly, and annually, instead of spot buys. This is in the short term. However, for a long-term agreement, something that is binding with primary and secondary suppliers for 5 to 10 years, works well.
Gaining the confidence of a supplier partner helps forge long-term relationships and brings in stability to the entire operations.
Emerging Technologies
Parallely, introducing modern technologies across supply chains such as automation, and robotics, needs time to be fully incorporated, having first to do away with teething problems. So, with each new programme there are delays in the supply chain. An example could be the wiring problems on the Airbus A380 superjumbo.
INNOVATION Pratt & Whitney spent two decades and more than a billion dollars developing its innovative turbofans. The late delivery of lavatories and business class seats from Zodiac Aerospace factories in the U.S. also delayed the completion of Airbus’s new wide-body A350.
Adequate Skilling
With increasing demand, there is a limited qualified workforce to execute new programmes. Training personnel with relevant and adequate takes time, especially for complex projects
Technological advancements require skilling at a faster pace to help deliver newer and better machines. The need to learn new skills like additive manufacturing, machine learning, blockchain, and smart automation, amongst others.
Today’s aerospace supply chain is complex, being spread across regions, which means that the slightest of disruptions can set off a domino effect. This then undermines the reliability and robustness of a well-founded aerospace logistics sector. In avoiding delays in the rollout of new-generation aircraft in the capital-intensive aviation industry, an agile and resilient supply chain, aside from efficient production processes for resources, goods, and services, should always remain in focus.
A resilient aerospace logistics is essential in today’s world playing a crucial part in timely deliveries and enabling companies to extend their operations across the world. And, this is not limited to goods or raw materials but includes human resources providing relevant services. Good business practices for airlines and aviation logistics to incorporate into their operations are superior customer service that ensures timely delivery and safety of products and services being transported or stored.
Essentials in the Aerospace Logistics Business
Accurate forecasting is critical across the entire air transport business, bringing in efficiencies in operations. Forecasting enables entities to make informed decisions that help improve earnings and pare unnecessary expenditures. A very reliable ground support is essential for airlines including cargo and baggage handling, checks and inspections, and fuelling – all must happen to ensure on-time performance.
Staging and security
Third-party representatives who are responsible for staging and security must be carefully selected to provide third-party support. These include proper selection of airport facilities at the airside, for staging purposes, safe and secure hangar facilities, and aircraft using security personnel.
Importance of support from Airports
Airports play an important part in ensuring the efficiency of transportation of resources by air and usually have a section that looks at improving aviation logistics by working closely with air transportation companies. This is a vital link that both the air transporter and airports must maintain for aerospace logistics as a service and business to be established. This is especially important for some of the major airports that deal with high traffic volumes.
Technology has developed making it possible to gain relevant information swiftly so analyses of data may be used to implement strategies for required and desired outcomes.
Moving cargo by air has been growing rapidly in recent years, at it may continue growing for a long time in the future. In general, moving resources by air has proven to be a great business and even an essential aspect for any government trading aspirations.
Job Creation
The aviation logistics and supply chain sector has presented itself as a great source of employment for interested and qualified aspirants. With the increasing demand for air travel and transportation, logistics firms are in search of talent with adequate knowledge and training in aerospace logistics. Popular areas of interest appear to be customer service, sales support, operating knowledge of software necessary for logistics, forecasting, revenue management and analysis, and logistics management. Professional courses are available in reputed institutes and once qualified, a job seeker in this sector may expect to land a well-paid job.
Gaining experience as an intern or a full-time employee helps freshers to move up the ladder.
A more specialized area where adequate knowledge and experience is required is aviation MRO (Maintenance, Repair, and Overhaul) logistics. Running a logistics business in the aviation sector or being employed in one requires careful planning and monitoring of the entire supply chain. The Aviation MRO entails the transportation and distribution of aviation MRO components and equipment that ensure that aircraft are maintained and repaired meticulously and in a timely and efficient manner.
Key Players
The market is witnessing significant growth across the globe, because of an exponential increase in demand for air travel, the emergence of new logistics companies, and the adoption of advanced technology to improve logistics operations and delivery, are here to stay. Some of the established brands in aerospace logistics are:
- Deutsche Bahn AG
- Deutsche Post AG
- DSV Panalpina A/S
- Expeditors International of Washington Inc.
- Fedex Corp.
- Kuehne + Nagel International AG
- Nippon Express Co. Ltd.
- SEKO Logistics
- United Parcel Service Inc.
