Podcast: Breaking Down The Headlines At MRO BEER

Editors discuss the headline issues from MRO BEER 2025, including regulation and use of generative AI, shop visit strategies and workforce retention.

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Transcript

James Pozzi:                 Welcome to the MRO podcast. I'm James Pozzi, MRO editor for the EMEA Regions at Aviation Week. And today we are recording from Prague at the conclusion of MRO BEER 2025, where over the last couple of days we've heard a lot of great insights from the conference too on the region's pressing challenges, opportunities, and other trends. There's a lot to unpack on this podcast today, so joining me is Lindsay Bjerregaard, who is managing editor MRO at Aviation Week, and Dan Williams, who is director of Fleet Data Services for Aviation Week Network.

                                   Lindsay, Dan, thanks for joining me.

Lindsay Bjerreg...:         Thanks, James.

Dan Williams:               Thanks for having us.

James Pozzi:                 Brilliant, so let's start. Lindsay, what were some of the things that caught your attention? Of course, I mean, you moderated a couple of panels over the last couple of days, one on AI and another one on workforce.

Lindsay Bjerreg...:         Yes. Yeah, so I'm probably a little biased, but I certainly noticed both of those themes coming up quite a bit at the conference.

                                   For the AI panel in the panels leading up to that, AI got brought up regardless of the subject several times. It seemed like there was a lot of skepticism in this particular region as it pertains to AI. But then during the actual AI panel that I moderated, there seemed to be a lot of enthusiasm for it as well. We started the panel off with a poll about what types of gen AI tools people have used before, so things like ChatGPT, Alexa, even mobile phone photo editors. It seemed like most people had at least used some of those before.

                                   In terms of potential gen AI use cases, one of my panelists, Dr. Ip-Shing Fan from Cranfield University, basically said anything you can imagine is possible, but not necessarily all things are business relevant.

                                   There were actually some interesting AI use cases that got brought up during your interview with Ryanair deputy director of heavy maintenance. He said that they're using a third party AI company to help them with training, so essentially training delivered on mobile devices. It can generate quizzes based on training content that you've been provided. People can interact with it using voice-to-text and that sort of thing. He said they're also using AI in parts forecasting, so he said they're looking at parts consumption, data trends, and then building forecasts for parts consumption based on future maintenance that they have in the pipeline.

                                   Another thing that got brought up a little bit during the panel was the costs and the return on investment for generative AI. My panelist from Lufthansa Technik said that costs of implementing AI aren't necessarily that high. But if you're using an external tool, you could be paying for 3,000 licenses for all your different employees to use that. That could add up quickly. However, when those panelists were asked whether AI has saved their company's money, yet that same panelist from Lufthansa Technik said yes and that it's getting faster and easier to prove out business cases and convince management.

                                   AFI KLM E&M said they're still measuring the impacts of use cases. They have I think 80 plus different AI use cases that they're working on, so obviously they probably don't know yet on a lot of those.

                                   We also talked a little bit about whether companies should buy or build an AI system, and it seemed like the consensus seemed to be that it might make sense for big OEMs or airlines to build in-house, but it's probably not worth it for smaller companies. It also depends on how much control you want, how much connectivity with other applications that you want.

                                   We also talked a little bit about trust, trust in AI. One thing that I've heard before and that the panelists pointed out was that AI tools, at least in their experience, are typically around 90% accurate. In a lot of use cases that's actually better than humans, which they said are more about 80% accurate with certain tasks. However, a human will always need to be in the mix to review those AI results.

                                   They also said a regulator at least right now cannot certify an AI to have responsibility to sign off on work. One other thing that I thought was funny because we had Lufthansa Technik and AFI KLM E&M on that panel, there's an audience question asking if they would ever collaborate with each other on AI. The term frenemies was thrown around, but they did talk about being open to collaboration, particularly when it comes to dealing with regulators and approving AI. I thought that that was interesting.

                                   And then as far as workforce, there was some talk about how this region of Europe doesn't necessarily have the same challenges in recruiting as other areas.

James Pozzi:                 No, they can get the people in. Yeah, that definitely came across.

Lindsay Bjerreg...:         Yeah, I can't remember who said it, but somebody said that working for an airline in their country is something that's still aspirational.

James Pozzi:                 That was the CEO of Air Serbia, Jiri Marek, who did the airline keynote.

Lindsay Bjerreg...:         Yeah, I thought it was super interesting. He talked about how the juniority issue is not necessarily a bad thing. I was surprised to hear that he said he was one of the oldest employees of the company in his 50s and a lot of his management is in their 30s, so that really stood out to me.

James Pozzi:                 Seems a big emphasis on culture as well. Czech Airlines Technics the keynote on the first day, Petr Dobersky, the CEO. That pretty much led his address focusing on what they're doing with culture, especially a company like that who were only a couple of years ago in mid-2023 going through some pretty bad times. The workforce had shrunk post-COVID, then there were up to 600 people then, and that's now risen to 700. He really put an emphasis on what they're doing with company culture, trying to engage and motivate their workforce and making them part of the decision-making process.

                                   For example, trying to refine what makes people happy, I guess. There's a massive emphasis on that on culture, and I've seen that with a couple of other MROs in this region over the last year or two as well. They're really trying to crack that code and just refine a culture that works and allows them to keep people because it seems to me you are right. You said getting people in is not an issue in this region as it is in other regions. Certainly I'd agree with that, but keeping the talent is a massive thing here because people will look at their options and go into not just other aviation companies but other industries. We've seen that happen.

Lindsay Bjerreg...:         Yeah, I think the retention thing was key, too.

                                   One of my panelists who's the COO of Magnetic MRO talked quite a bit about what a blow it is to the company when they spend a lot of time and effort and money on training new employees and then they leave the company and go somewhere else, whether that's a competitor, whether it's outside the industry. It does seem like every company that talked about workforce talked about their various efforts, not only to recruit but to retain.

                                   And then the one last little fun thing about workforce that I thought was interesting too, my panelists from EasyJet shared a video that they made where they interviewed little kids about their perceptions of different career types. They had kids basically imitate what does a pilot act like or what does a mechanic act like, and most of the kids seem to think that pilots and mechanics are always men. That kind of cultural conditioning happens really early, and so I think that particularly if we want to bring in more women in the industry, I think the targeting of that kind of recruitment needs to happen younger.

                                   We hear that a lot elsewhere, but I just thought the video was really cool.

Dan Williams:               On that same panel, it was the same way. There was a question from the audience of what percentage of your workforce is female, and they were very honest. Basically said very little. I think one response was below five per cent, and Lindsay, we talked about it afterwards. The US average is about three per cent in this industry, so three per cent is below five.

                                   I'd like the video as well with EasyJet. Just going back to the corporate culture, I thought it was very honest to Petr to talk about that because it shows how long it takes to change a corporate culture. He thinks he's about halfway through his journey there are thereabouts, and there're over two years into this. When you apply that to bigger and larger companies, let's say, that corporate culture change is not going to take the five years. Let's say it's going to take check out these techniques. It might take 10 years and it shows how difficult it is to turn these things around when you have embedded historical practices and cultures that you need to mold, tweak, and change and make all encompassing.

                                   It was interesting.

James Pozzi:                 Yeah, absolutely. Dan.

                                   Moving away from workforce, what were some of the other things that caught your attention from the show that... I know I saw you obviously writing down some or compiling some notes?

Dan Williams:               Yeah, so it comes as no surprise as a guy who does fleet, flight, and forecast that my most asked questions were of tariffs and uncertainty. It was fully expected. I tried during the course of the presentation to try and get ahead of some of these questions. The answer of we don't know right now is an honest and open and frank answer, but also it is the general consensus in the room. I spent a lot of time soliciting feedback from a multitude of different companies, and they're all in the same kind of boat.

                                   Have some of the companies try to guess what's going to happen? Well, maybe a little bit on the back of an envelope. But the problem is with the uncertainty of tariffs on, tariffs off, whilst we've been here, tariffs have gone on and off, and so 90 day pauses and things like that. The tariff uncertainty is causing a headache throughout the system. I think it's just because there's no obvious answer to everything. I think Pascal said it on one of the panels from Valais. He was like, "Look, we just don't know and we just have to wait to where's that effect." I think most people generally agree because we don't know.

                                   There's extra uncertainty when it comes to the Eastern European obviously bordering Russia. Now as we speak now in theory there are peace talks or potential peace talks going on in Turkey right now, and obviously we may not know the outcome from those four days or whatever going forward. If peace does come between Russia and Ukraine, which the world wants, but then what happens next? That's one step. What happens with this aircraft in Russia? Well, they're probably not valid outside of Russia, but does it open Russian aerospace? Does that change demand?

                                   We've seen some softening in some transatlantic demand from Europe to the US in part because of the uncertainty with tariffs, et cetera, so does some of that traffic now start to look east because all the European operators have pulled out of operating Chinese flights because they can't overfly Russia?

                                   I've had a lot of questions from that aspect it of what's the impact to me, my business, my company, my consumers, my end users of what we do, whatever that company is. It is very difficult to give a definitive answer. I could give you 400 answers right now, all of them different, and then tomorrow it could be a completely different 400 answers depending on what happens in any given day of the week. It's a tricky situation to be in. The only saving grace is everybody's in it. Everybody's in that same boat.

                                   It was nice that Lindsay pointed out my penguin tariffs on my presentation because we don't want to tariff the penguins for a CFM56, so we shall see. But it's been a really engaging show. It's one of the, I think, the biggest MRO BEER that has been and that shows the growth within the region. We talked a little bit about ACMI operators for example. Eastern Europe is very heavy with ACMI operators, and right now they're doing really well because the parts of the industry is struggling. GTF I'll take as an example, they're helping fill some of that gap.

                                   There's a good outlook for the region and hopefully as long may that continue. We are predicting reasonably good results growth in the region of 4.3% in terms of CAGR over the coming decade when the globe is 3.1. It's above average, which is good.

James Pozzi:                 Yeah, you mentioned the GTF. Actually, I'm just going to throw in a few of the engine takeaways I had, and they are a linked to airlines.

                                   Firstly, as Lindsay mentioned, Adam Hale from Ryanair who I spoke with, he shone a bit of light on their engine shop plans, and it seems like it's nearing an announcement soon for two shop locations. He mentioned several countries, mostly in Europe. He also mentioned North Africa, Morocco for example. They're talking to a lot of different countries about where to locate these two shops and they seem to be pressing ahead with that and that's going to be full overhaul capability. That I guess is to get better or greater control over their supply chain of course, which he did say is working very well. We've got a lot of long-term partners in that, so it seems like that's been quite steady. Yeah, they're close to an announcement there, which I thought was really interesting. We should expect something pretty soon.

                                   Another one as well I thought was quite interesting was Air Serbia. Again, obviously I mentioned Jiri Marek earlier. They have a midlife fleet and that's what they actively target. He said they're looking to avoid shop visits wherever they can. He gave just a one-word answer of avoid when I asked them about shop visit strategies.

                                   But interestingly, back to the GTF, Jiri said they are staying back from any talk of fleet modernization. Obviously they've got A319 and A320s, BT500 powereds. They are waiting. They're going to wait for as long as they need to, and they're in no rush whatsoever until the GTF issues are solved or at least satisfactory to them to consider doing.

                                   It's interesting this time last year I spoke to the now former CEO of Air Baltic, Martin Gauss, who we had in the same slot, the airline keynote and the GTF, their groundings, and we all know what they've been through as an airline Air Baltic.

                                   Seems like other airlines in the region were watching closely and they're stepping back a bit before to let that solve. Yeah, they'll continue to focus on midlife assets in the meantime, and those older mature engines while avoiding shop visits. Obviously work scopes as well in this region with operators are getting more creative. We've heard that kind of terminology before. Being more creative in shop visits rather than going for the heavier inductions, and airlines seem quite happy to do that in this part of the world in comparison to others who are obviously doing it as well. Yeah, they're a lot more upfront about that, about their intentions.

Dan Williams:               Yeah, it's interesting. We're talking about going back to Air Baltic and they announced early in the summer they're going to pull some of their schedules because they've not got the aircraft to do the routes because of GTS. However, they've managed to find the same aircraft available to operate aircraft on behalf of other operators, Swiss and Lufthansa, at the same time. It just goes to show that you can.

                                   In that respect, they're going back to the ACMI operator. That's what they're operating as, and you can make money in that. They use in a modern fleet. Traditionally ACMI operators use, let's say, a more mature fleet, but Air Baltic are doing it with a modern fleet, which is really exciting and interesting. It's good.

James Pozzi:                 Yeah, absolutely.

                                   Yeah, sorry, just go back to Ryanair, I'll just restate what I did that'll focus on their CFM56 and LEAP engines. Of course, they've got all Boeing's 373 aircraft, both the NGs and the more and more MAXs as it comes along. Yeah, it was just quite interesting really because very unprecedented.

                                   Firstly in LCC, they obviously like to outsource a lot of what they do, but Ryanair bringing that engine capability in-house, I know it surprised a lot of people when it was announced earlier this year. But of course they've got the resources and the finance to do so and to commit to that big undertaking over the next five or 10 years. I just thought it was very interesting to get some more insights on that and what they actually plan to do. Yeah, it sounds like it's very much on the card.

Dan Williams:               Yeah, the interesting part for me for that was it wasn't specifically the CFM56 that's driving that decision. Adam was quite honest and say, "Look, it's the LEAP-1B," which in theory shouldn't be having that many shot visits right now because it's not that old an engine. There was the period of well-documented period of grounding of the MAX fleet from March 2019 through November, December 2020, so they didn't accrue any cycles during that time. I think that's an interesting point that it's the LEAP-1B that is, it's not forcing them to do it, but it's made them rethink where they need to go.

                                   I think he said that when Adam said that when they get the engines into shop, the turnaround times are not bad. Was it 100 days for the LEAP and 70-ish days for the CFM56? The problem is getting it into the shop, so it's a capacity issue. It's not exclusively a turnaround time issue. That was interesting, too.

James Pozzi:                 Yeah, 100 days once in the shop. Yeah, that was very interesting indeed. I think he mentioned he thinks maybe the LEAP it's got a little bit worse over time.

Dan Williams:               I think it's new. The introduced the CFM56 into service many moons ago. They were building two to 400 a year. Now for these next generation engines, they need to build two to 400 a month to satisfy needs. The scales are very different.

James Pozzi:                 Yeah, absolutely.

                                   Not to end on a bummer though, but I thought it was interesting there was an audience poll and the standard of the supply chain I think in the region and maybe even broader 60%, so they feel it's going to get worse over the next two years. Obviously a supply chain mentioned ring that imaginary bell. Yeah, I mean, does that correspond with what you both have heard in the last couple of days?

Dan Williams:               Yeah, I think it's one of those that some things in the supply chain are getting better, some things in the supply chain are leveling off, plateauing, and occasionally some things gets worse.

                                   Now again, just like the tariffs, tomorrow it could be in a different bucket, but it is a forever changing landscape.

Lindsay Bjerreg...:         You summed it up perfectly.

James Pozzi:                 Well, Lindsay, Dan, thank you so much for joining me today on the MRO podcast, and thank you for listening. Don't miss the next episode by subscribing to the MRO podcast wherever you listen to podcasts.

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