A cold wind of change is blowing through MRO: only those with the resources to gather, manage and control data, information and knowledge will withstand the chill.There seems to be growing consensus on several themes coming out of Amsterdam this past week. My observations and opinions on what the industry was saying at MRO Europe are…

MRO Networks will be led by OEMs or large airline affiliated MROs with economies of scale. Independents will need to focus on specialty niche work or geographic intermediation and then offer their services to MRO Networks. So in the end, you are leading an MRO Network or you’re a niche provider to an MRO Network or you’re future isn’t viable (unless a government is subsidizing you).

Economic times are tough for MROs and will get tougher. For airlines in the EU, the economy is very tough, the rest of the world not so great but not so bad either. But, where airlines go, there also goes MRO. The phenomenon of retirement of aircraft at a much younger age will increase – with current aircraft being superseded by new generation, fuel efficient, early lifecycle replacements. This will put downward pressure on demand for MRO and prices. Also, airlines have learned capacity discipline, so excess numbers of aircraft will not be flying around half full but still requiring full MRO. These phenomena will drive consolidation and additional bankruptcies which, as in the airline industry itself, results in increased pricing power. It is good for all that some pass away.

Then there is DIKW (Data, Information, Knowledge & Wisdom) to consider. New generation aircraft are generating millions of MB of data per day. That data is turned into real time information and, if airlines and MROs have the technology, that information can be turned into actionable decision knowledge. Over time, again with the right analytic technology, data and information can be turned into wisdom on how to optimize the use of each fleet, each aircraft, and each route. But technology requires capital, and right now, only OEMs and well backed MROs are investing in the tools it takes to win in the knowledge age.

Knowledge is power. IP is control. Boeing knows this and it is the reason they are placing considerable conditions on any third party who touches 787 data or content. The war for operational data, reliability knowledge and service lifecycle management wisdom is well underway. The battle lines will be drawn along MRO business network lines via MRO IT network sharing and barriers to sharing.

And my closing note is the fallacy of forecasts. For over a decade, a couple of MRO strategy consultancies have analyzed the industry and concluded its market revenue to be in the mid $40B USD. These brain trusts further forecast that the market will grow to about $60B in ten years. Well ten years has come and gone but neither reality nor these forecasts have changed.

The question isn’t whether or not the annual MRO forecasts are or will be accurate or not – that we know. The question is, ‘Why should we care?’ Would anyone make a capital or operational decision on this fodder? I should hope not!

At least that’s how I see IT.