Latin American Operators Take More MRO Into Their Own Hands

Persistent supply chain challenges are driving Latin American operators to become even more resourceful in handling their maintenance operations—and in some cases, more opportunistic.

Noting MRO capacity worldwide is very restricted, Brazilian operator Azul Airlines President Abhi Shah explained at the carrier’s investor day in late 2024 that having its own hangar to perform heavy checks and other maintenance cuts costs substantially. Azul cited maintenance cost savings of 440 million Brazilian reais ($71.9 million) since 2020.

Azul has opted to leverage its maintenance expertise as part of broader efforts to diversify revenue, having debuted Azul TecOps in 2023. Some of its third-party customers include Atlas Air, the Brazilian Air Force, Sabena Technics and the French government through work on the country’s presidential aircraft.

“It’s our newest business unit in terms of generating revenue, but we’re very excited about its potential going forward,” Shah concluded. For the first nine months of 2024, TecOps generated more than 20 million reais in revenue.

“With initiatives aimed at servicing both civil and military aircraft, Azul TecOps has already built a diverse portfolio of clients in Brazil and abroad,” the company tells Inside MRO. “For 2025, the projections are optimistic, with estimated growth of 15%, demonstrating the continuous advancement and consolidation of this promising business unit worldwide.”

The nerve center of Azul TecOps is the company’s approximately 377,000-ft.² hangar at Viracopos International Airport in Campinas, Sao Paulo. Its capacity includes three heavy maintenance lines, one modification line and two special project lines. The facility also has 13 workshops for other tasks including component work.

Between the Viracopos hangar and its secondary facility at Pampulha Airport in Belo Horizonte, Azul TecOps offers MRO services for Airbus A320s/A321s and A330s; Embraer E1/E2s; ATR 600s; and Boeing 747-400Fs.

Internalizing Capabilities

While regional powerhouse LATAM Airlines Group has no immediate plans to vie for third-party maintenance, the company says it “closely monitors the challenges and opportunities in the MRO sector.”

At the group’s investor day in October, LATAM executives touted the size of its aircraft maintenance center in Sao Carlos, Brazil, describing the facility as a hidden gem flying under the radar.

“It’s not known, because we do not do third-party work—so far,” said Hernan Pasman, LATAM vice president of operations, maintenance and fleet.

Investors at the event sought more detail on LATAM’s efforts to diversify revenue, questioning CEO Roberto Alvo on whether that might involve third-party MRO work.

Alvo answered that he saw a “ton of opportunity” for the company overall. “I think that the ability that we have to monetize our size goes beyond simply just adding additional flights, so we’ll probably talk about that more in the future,” Alvo said.

In the meantime, LATAM continues to build its internal capabilities to navigate supply chain and logistics constraints.

At the beginning of 2019, 49% of the LATAM Group’s aircraft maintenance services were internalized at its MRO facilities in Sao Carlos and in Santiago, Chile. Since then, the company has expanded its network of heavy maintenance stations, incorporating slots at the airports of Guarulhos in Brazil and Lima in Peru.

By the end of 2024, LATAM had internalized 82.5% of its service volume. It aims to bring in house more than 90% of services this year.

“It is worth noting that challenges within the logistics supply chain persist,” the company said in a statement. “In this regard, LATAM’s internal capabilities represent a significant asset, offering an excellent global operation with the necessary flexibility to address these challenges.”

The recent installations of Wi-Fi on A320-family aircraft operating in LATAM’s domestic markets and some intraregional flights in South America demonstrate the scope of the company’s maintenance abilities.

In April 2024, LATAM Brazil completed implementing Wi-Fi services across all its A320-family aircraft, dedicated to domestic flights and some regional routes in South America. The company noted that 94% of these installations were carried out internally at its MRO facility in Sao Carlos.

Additionally, as part of its heavy maintenance scope, LATAM recently announced the construction of a new hangar at Sao Carlos, investing 40 million reais. It is scheduled to begin operations in September for heavy maintenance of Boeing 787s, a process that currently takes place outside of Brazil.

Once completed, the hangar will be able to accommodate one widebody 787 and a narrowbody, or up to three narrowbodies. It will also be LATAM’s first paint hangar capable of servicing widebodies. That will enable processes such as painting the wings of 787s, a project slated for this year, to be brought in house.

LATAM says it remains focused on expanding its portfolio for component maintenance and is “aiming to maximize the internalization of services in a sustainable manner whenever a favorable business case is presented.”

Today, LATAM MRO Brazil is responsible for more than 60% of all scheduled aircraft maintenance for LATAM Group affiliates. It boasts a team of 2,000 and a newly launched professional training program, initially focused on aircraft mechanics, at the Sao Carlos site. Its first cohort of 70 trainees began in-person classes in January.

LATAM is “changing the way maintenance is being done around the world,” Pasman said, describing interdisciplinary problem-solving teams and digitalized maintenance processes. The company has used drones for aircraft inspections for three years at the location. Pasman stated they can inspect an aircraft in 70% less time than a human, with 50% more accuracy.

Taking Control

In the face of aircraft delivery delays and continuing supply chain bottlenecks, other airlines in Latin America are taking a bit more control of their maintenance operations.

Panama’s Copa Airlines has opted to purchase some Boeing 737s off lease. “We have even bought spare engines ahead of time,” CEO Pedro Heilbron said in late 2024.

Heilbron added that Copa is being proactive in securing parts even though it has contracts with original equipment manufacturers “that are supposed to cover us.”

Copa also is performing engine maintenance at its base in Panama City’s Tocumen International Airport with the support of GE Aerospace “to speed turnaround times and have more engines in stock,” Heilbron said. That work previously would have been sent to other MROs.

As airlines in Latin America and worldwide endure supply and logistics challenges that show little sign of easing, Aviation Week Network’s 2025 Commercial Fleet and MRO Forecast predicts a compound annual growth rate of 3.1% for the region’s MRO industry over 2025-34. During that period, the forecast projects $76.5 billion in commercial aircraft MRO demand in Latin America and $1.4 trillion in total MRO spending worldwide.

It remains to be seen how the composition of Latin America’s MRO industry will evolve. But it appears many existing players aim to grow, and new entrants could emerge.