The Uptime blog

MRO Asia 2008 concluded today in Singapore. Here are some of my impressions from this year’s show:
 
1. The prevailing mood was definitely on the somber side. Every speaker mentioned the “financial crisis” or “market turmoil” at some point or other in his/her speech, some more than once. The presentation from the Association of Asia Pacific Airlines (AAPA) included one slide that had several bullet points all saying, in diffferent words: “expect bad times ahead, we have no idea what to expect”. The continuously falling oil price was small consolation in the general feeling of uncertainty.
 
2. The exhibition floor was comparable in size to last year’s show in Shanghai, but some of the players in the MRO IT space were conspicuously absent. While most of the best-of-breed MRO providers were there, Swiss Aviation Software was absent. The two “gorillas” in this space - SAP and Oracle - were also absent, although Axon Global was there, with their new iMRO offering, which basically is to replace SAP MRO. From the content delivery players, OpenConnent was not there. Perhaps the European players do not view Asia as a market they need to invest in.
 
3. As for the attendees, most Asian airlines and many of the non-Asian ones, were represented. However, there seemed to be fewer delegates compared to last year, definitely fewer representatives from Chinese airlines. I know for a fact that one of the airlines planned to send five senior delegates but, with the recent upheavals in the world economy, decided at the last minute to cancel the trip and send two junior delegates instead.

4. Any vendor that attends a major show like MRO Asia carefully monitors the topics that customers and prospects want to discuss. In this regard, Enigma InService Job Card Generator drew a lot of attention from attendees. It is clear that airlines and MROs view the ability to provide intelligent job cards quickly and easily as a key component to accelerating maintenance. Several airlines were seeking even greater automation, and took great interest in Enigma InService MRO. In this regard, it was nice to have important customers, like KLM, at the show that can verify the cost reductions and productivity improvements that are available through advanced technology.
 
Next year’s show is in Hong Kong. See you all there!

A recent news clip on AviationWeek.com noted that KLM-Air France is in preliminary talks with French transportation company Veolia about a potential rail partnership.

What’s this about air and rail transit companies getting cozy with each other? They don’t usually share resources; they compete against each other, on short-haul trips at least. Ah, but trains and planes share one thing in common: they move people and goods.  This potential partnership may be a case of “if you can’t beat ’em, join ’em” mentality, which makes sense in a lot of ways, financially.

In some areas, particularly Europe and the northeastern U.S., high speed rail is providing stiff competition for airlines, especially for transporting people on short-haul routes.  When you factor in the time necessary to get to and from an airport and pass through the security checks, it is often faster—or just as fast—to go via high speed rail, if your destination is a short distance away (for example, Paris to Frankfurt). Furthermore, it costs about the same amount of money for the ticket holder/user, and the train stations are usually located in convenient downtown urban locations, near businesses and other transit infrastructure.  Veolia does not yet use high speed rail, but that could change, since the infrastructure is in place throughout much of Europe, and in some parts of the United States. (It’s worth noting that Veolia, though headquartered in France, is the largest transportation (bus and rail) provider in the US, and operates services on behalf of over 5,000 local, regional and national authorities around the globe.)

Rising fuel costs are no doubt a factor that is prompting Air France-KLM’s conversations with Veolia; certainly both industries face the challenge of rising fuel costs, but it probably takes less fuel to get a train from point A to point B. One must also consider how much weight/volume (people and cargo) can be hauled for the same amount of fuel.

But which mode of transport costs less to maintain? Is the cost of rail maintenance lower than aircraft maintenance? That’s hard to calculate, given the variety of differences between the two transportation modes. In general, jet aircraft machinery is more complex than that of trains, so it’s fair to assume that maintenance costs are much higher for airlines. However, rail transit must spend a substantial amount of money to maintain thousands of miles of track and hundreds of stations.

Enigma already has a strong track record (pun intended) for reducing costs and improving efficiency in aviation maintenance by providing parts and service information. Because most people and some cargo must reach far-off destinations quickly, there will always be a need for airline transport. But we fully expect to see growth in the rail industry, and along with it a growing demand for products such as Enigma 3C, InService MRO and InService EPC, which are currently implemented in rail transit companies to help them achieve similar benefits in their maintenance depots.

Rail travel seems to be making a bit of a comeback; according to the American Public Transportation Association, in the first quarter of 2008 there was a 3.42% increase over the same quarter last year in unlinked transit passenger trips (which includes light rail, heavy rail, buses and trolleys). Furthermore, CNN just reported today that U.S. cities are racing to cope with ever-increasing demand on public transportation as gas prices remain at record levels.

Several airlines probably sense a need to diversify to capitalize on this trend. After all, both airlines and rail are in the business of transporting people and cargo from one location to another. Therefore, it seems logical for the two industries to become closer. Don’t be surprised if you soon hear more airlines calling “ALL ABOARD!”