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Maintenance, Repair and Overhaul (MRO)

MRO presents an unusual combination of risk exposures. A strategic choice of broker not only helps to deliver innovation and efficiencies, it can provide you with a means to differentiate you from your competitors in the value chain.

Willis Towers Watson has extensive experience of working with the providers of MRO services to the aerospace industry. In many cases these services are provided in-house by the airlines or aircraft operators, and are often marketed to other operators. However, it is becoming increasingly common for airlines to contract independent third parties to provide ad-hoc, as well as scheduled, MRO services, as it is more economical for a small or medium airline than having its own facilities.

Risk factors

We recognise the combination of risk exposures that make the MRO third party liability risk unusual in the aerospace industry, such as:

  • Damage to aircraft while under the MRO provider's care, custody and control, either on the ground or during a test flight
  • Damage to components while being worked on at the MRO provider's facility
  • Faulty workmanship causing the failure of a component or system in an aircraft in flight after it has been returned to the customer
  • Injury to customers or other personnel while on the premises

Much of the work performed by independent MROs is in the military field. Military authorities around the world have similarly recognised that external commercial contractors can be better placed to perform certain tasks, for example deep maintenance or modification work with specialist facilities, than if the authority has to divert manpower and resources to doing so itself. The same risk exposures exist, but the level of risk is somewhat less since the aircraft are not returned for commercial activities in what can be a litigious civil world.

We work as your risk advisor, to identify opportunities for mitigation and improvements to your organisation. No matter how complex the risk, our focus is to help you achieve your goals.

How we can help you to achieve your goals: an MRO case study

We worked with an MRO identifying practical solutions and balancing ideal coverage requirements versus cost. We recognised that there will potentially be a reasonable number of relatively minor accidents - for example minor damage to aircraft while undergoing maintenance – but that the catastrophe element must also be addressed. Willis Towers Watson carried out an on-site risk review, employing independent consultants who are available to provide a range of risk management services ranging from ramp safety audits and contractual risk reviews to full business risk surveys. By working together with our client we helped to identify and present the risk exposures in the best possible light to insurers so that loss prevention measures could be put in place.

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