Invest in the right areas

Money is tight following the pandemic and few aviation companies have the cash reserves to invest heavily.

The priority, according to Giuseppe Renga, Chief Executive and President of AMROS Group, should be on those areas that have the potential to realize returns and save money in the short to medium term.

“Aircraft are cheap at the moment,” he says. “That means airlines will be starting up with a whole new mindset. Existing carriers will need to be nimble and think not only about what they offer but also what they have.”

Asset management—most notably the most expensive items on the balance sheet, the aircraft—must be a prime consideration.

Renga notes that though safety is paramount, and aircraft are always maintained to high standards, the processes behind maintenance, repair, and overhaul (MRO) can be unwieldy. That means crucial data can go missing.

“It starts when airlines receive the aircraft,” he says. “There is always an urge to get it flying and making money as soon as possible. But airlines don’t always take the time to understand the status of the aircraft. How long exactly will the components last on the schedule they envisage, for example? How can the maintenance plan and operational plan for the aircraft both be optimized? Failure to ask such questions is compounded by the systems and processes behind MRO, which don’t capture all the data.”

An incorrect phasing in of the aircraft leads to problems when it is eventually phased out and airlines have insufficient information to satisfy a potential buyer. Their prize asset is subsequently undervalued and vital revenue is unnecessarily lost.

Amros aims to resolve this issue through due diligence and a desire to understand what an asset is worth. The company is evolving from consultant to software provider.

“We try not to live in the future,” Renga says. “We know digitization hasn’t reached the level we want yet so our solutions accommodate paperwork. The reality is that aviation is in a hybrid situation, and we tackle that head-on.”

Regulators have a role to play. In many regions they still insist on paperwork and are only slowly transitioning to digital certificates and the suchlike. If regulators embrace digitization, then they can facilitate a speedier uptake.

“But even without the regulators, there is still loads to do,” insists Renga. “There is plenty of information technology that can be implemented.

“Even though aircraft are masterpieces of engineering, certain business processes are so backwards,” he continues. “In general, airlines are behind the curve in many aspects—such as how maintenance is managed and reported. The data supplied by an aircraft is massive and though airline systems generally work, many lack flexibility. That means so much data and knowledge gets lost. And consequently, how airlines manage an aircraft as an asset on a balance sheet is a long way behind.”

Amros aims to bring airlines up to speed.


Credit | Amros