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The Future of Aircraft Maintenance in Australia: Workforce Capability, Aviation Safety and Industry Development

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The Future of Aircraft Maintenance in Australia: Workforce Capability, Aviation Safety and Industry Development The Future of Aircraft Maintenance in Australia: Workforce Capability, Aviation Safety and Industry Development Final Report of Findings from Australian Research Council Linkage Project 110100335 October, 2015 The Future of Aircraft Maintenance in Australia THE FUTURE OF AIRCRAFT MAINTENANCE IN AUSTRALIA: WORKFORCE CAPABILITY, AVIATION SAFETY AND INDUSTRY DEVELOPMENT REPORT OF FINDINGS OF ARC LINKAGE PROJECT 110100335 Final Report Authors: I Hampson, D Fraser, M Quinlan, A Junor, S Gregson RESEARCH TEAM Professor Michael Quinlan UNSW Lead Chief Investigator Associate Professor Ian Hampson UNSW Associate Professor Anne Junor UNSW Dr Sarah Gregson UNSW Professor Ann Williamson UNSW Professor Garry Barrett University of Sydney Dr Eric van Voorthuysen UNSW Research Officer Dr Doug Fraser UNSW Research Assistants Dr Tanya Carney Kendrick Russell PARTNER ORGANISATIONS Australian Aerospace Limited Aviation Maintenance Repair and Overhaul Business Association Australian Licensed Aircraft Engineers Association Australian Manufacturing Workers’ Union Manufacturing Industry Skills Council (trading as Manufacturing Skills Australia) Transport and Logistics Centre TAFE NSW Industry Skills Unit and Southwestern Sydney Institute Flight Attendants’ Association of Australia (Domestic) Transport Workers’ Union of Australia The research team express their profound gratitude to Partner Organisations for: • Financial contributions to the study • Consultation and advice • Research collaboration and data gathering • In-kind research support and data analysis, including secondment • Assistance with survey distribution • Technical advice • Organisation of fieldwork Various drafts of this Final Report have been circulated to, and discussed with, Partner Organisations. They are the outcome of robust debate, both amongst the researchers and with several Partners. The views expressed in their final form at some points may not reflect the views of all Partners. The authors accept responsibility for errors and omissions. business.unsw.edu.au Executive Summary In a nutshell 1. By 2025, there will be an estimated 30% global workforce shortfall in aircraft maintenance capacity, with Australia and the Asia Pacific region particularly hard hit: Australia has a both a strong need and excellent opportunity to help meet this shortfall in the region. 2. This means moving quickly to rebuild both our aircraft maintenance and maintenance training industries by 2020, to permit Australia to handle a high proportion of its own needs across the civilian airline, general aviation and Defence sectors. 3. This is also a great opportunity to capitalise on our strong safety standards and high-end maintenance capability by building a maintenance and training capacity, capable of competing aggressively in the highest-value niches of the global market. 4. We must move to establishing a system of quality control safeguards, adequate to guarantee that maintenance on Australian aircraft, whether done in Australia or elsewhere, is carried out to best international safety standards. 5. Australian maintenance qualifications must be globally integrated through complete alignment with International Civil Aviation Organisation (ICAO) and European Aviation Safety Agency (EASA) training and licence standards; teething problems in the introduction of the new licensing and training system must be quickly addressed. 6. Regional and General Aviation are essential national services and so the new small aircraft maintenance licensing system must be quickly finalised, to ensure a nation-wide supply of qualified staff to perform and sign off on repairs and overhaul. 7. Developing workforce capability and career paths to meet the impending maintenance skills shortfall and develop a maintenance training export industry will require: o The expansion of training both in the skills required to work on existing aircraft and in innovative techniques for work on next generation aircraft o Keeping as many as possible of the present generation of aircraft maintenance engineers productively employed, and their skills and knowledge current, until local market demand revives o Reforming and rebuilding MRO training to ensure that a new generation of properly qualified engineers will be available to replace the current one as it retires o Harmonising training and career paths across sectors (Civilian and Defence; airline and General Aviation) and between aerospace manufacturing and aviation. 8. To help develop the training capacity required to build an innovation-oriented aircraft maintenance workforce, and to ensure that maintenance training makes a significant contribution to Australia’s education exports, a National Aerospace/Aviation College (NAAC) should be established, with nationally-networked branches in each state and territory. It would draw on the combined resources of the university and TAFE sectors, gain recognition as Part 147 category Maintenance Training Organisation, a Registered Training Organisation and a nationally registered higher education provider, and have support from aerospace and aviation industry employers for the in-depth provision of practical skills training and experience. 9. A national Aircraft Manufacturing/ Maintenance Industry Forum or Working Group needs to be established to advise on planning towards achieving these goals. For recommendations, see pages xv to xviii. i The Future of Aircraft Maintenance in Australia ii Executive Summary and Recommendations Executive Summary – more detail The Australian aircraft maintenance industry: Structure and trends 1. The aircraft maintenance industry as a whole has been subject to significant restructuring, the most important aspects of which have been an increase in outsourcing and offshoring – particularly of labour-intensive heavy maintenance of wide-bodied aircraft. 2. Global third party maintenance, repair and overhaul (MRO) has grown into a AUD 84.4 billion industry. Its cumulative annual growth rate (CAGR) is expected to be 4.1% over next 10 years, taking it past $AU 100 billion around 2024. 3. Aircraft maintenance is classified into line, heavy, engine and components. While on average labour accounts for 70% of the cost of maintenance, the labour component of line maintenance is 75%; heavy is 55%, engine is 9%. 4. The aircraft maintenance industry is embedded in both the airline industry and the aerospace industry. Line maintenance is dominated by airlines. Half of heavy maintenance is still performed in-house by airlines, while original equipment manufacturers (OEMs) are already dominant in engines and increasingly offering “whole of life” maintenance plans for their products – including whole planes. 5. In addition, there are approximately 350 independent MROs in the domestic and general aviation (GA) sectors and a significant range of civilian Defence contractors, specialised aerospace manufacturing suppliers and firms providing professional services such as modification design, testing and maintenance auditing services. 6. Most of the international fleet is not old, and although the majority is maintained overseas, a significant portion of it is still maintained domestically. o There remains capacity for heavy maintenance of large aircraft that could be reactivated, for example hangar space in Melbourne o Most of the small plane fleet is very old (67% older than 21 years), and not technically complex. However, a significant portion of small aircraft is less than 10 years old, and some small planes are retrofitted with advanced systems o Thus, size is not an infallible proxy for technical complexity, and this poses challenges for licensing and training alike, demanding maximum flexibility in qualifications, skill sets, and group and type ratings. 7. About half of single aisle domestic commuting aircraft are currently maintained domestically, while heavy maintenance of the rest is offshored but could be repatriated. 8. Aircraft used for regional Regular Public Transport (RPT) are maintained domestically, and this maintenance sector is ripe for expansion. 9. The large GA sector is critical to work across primary industry, tourism, scientific work, surveillance, freight and essential services, requiring geographically dispersed maintenance and maintenance approval services. 10. The aircraft maintenance workforce is difficult to measure, with the last reliable estimate (2011 Census) being 14,489 aircraft maintenance engineers (AMEs), spread across the defence and civilian sector. 11. A number of factors make the further development of an onshore maintenance industry achievable: iii The Future of Aircraft Maintenance in Australia o Onshoring will be facilitated technically by the changing nature of both line and heavy maintenance requirements for next-generation wide-bodied aircraft o Major OEM subsidiaries have a significant footprint in Australia, and there is significant number of innovative Australian aerospace manufacturing suppliers o A330 maintenance capacity has been kept onshore and provides a useful platform for maintaining the A380 subsequently, as global maintenance skill shortages emerge o Australia could capitalise on the convergence between Defence and civilian aviation in usage of aircraft types. 12. Airports, with government support, have an excellent opportunity to take the initiative in making Australia a regional service training hub for heavy maintenance and aircraft on the ground (AOG) work in the emerging and maturing helicopter, regional jet and business jet markets. Safety oversight and offshoring
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