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"Greed is good." During the go-go 1980s, the infamous financier Ivan Boesky imparted that inspirational homily in a speech to college kids. Boesky’s sentiment (echoed by his cinematic alter ego, Gordon Gekko of Wall Street fame) comes to mind whenever I ponder the rapid pace of globalization in the MRO sector.

The aviation industry, particularly the MRO sector, is in the midst of unprecedented consolidation in all regions of the globe. Driving these mergers and acquisitions is the need for increased operational efficiencies, lower labor costs – and yes, greater profits.

The pressure on aviation companies to eliminate bureaucratic redundancies and shift operations to lower-cost sources overseas has never been more intense. Global corporate parents, goaded by impatient shareholders, are unrelenting in their demands that local operating units get "lean and mean." The toll can be high, in terms of layoffs and wrenching personnel dislocations.

But remember: corporate pain equals opportunity. MRO managers are pinpointing inefficiencies and creating innovative, customized systems that remedy them. In other words, the selfish profit motive – what Adam Smith called the "invisible hand" – translates into MRO solutions that improve the overall quality of aviation.

Probably the most salient example to date of an integrated maintenance solution on a grand scale is Boeing’s GoldCare offering for its 787, as well as the Chicago-based giant’s purchase of Aviall, the industry’s largest independent aftermarket parts distributor.

To be sure, Boeing’s role in GoldCare is more akin to that of a program manager and expediter. However, through its absorption of Aviall, Boeing gleans a strategically valuable location in the supply chain at a time when new large maintenance contracts tend to be multiyear package deals that include support and management for spare parts.

The United States continues to represent the largest MRO market, but until recently it was mostly cordoned off to third-party suppliers. No longer. Airlines are cutting back on their MRO expenditures by outsourcing, which is creating boom times for third-party entities.

Meanwhile, torrid aviation growth in India and China has made these countries powerful magnets for MRO work. According to the consultant AeroStrategy, based in Ann Arbor, Mich., the combined Chinese and Indian MRO markets will be worth $4.8 billion, or about a third of the entire $14.5 billion Asia/Pacific MRO market, by 2015.

Because of global consolidation, the MRO supply chain is 40 percent more efficient in terms of capital productivity, said Kevin Michaels, principal and co-founder of AeroStrategy. During an Aviation Today podcast, "News and Trends in Aviation Maintenance," Michaels said that the pitiless drive for higher margins is whipping the MRO sector into fitter, more muscular shape.

"I think it means that operators have done a good job at improving the productivity of their inventory," he said. "It leads to more savings throughout the supply chain."

This theme has surfaced again and again in many of Aviation Today’s podcasts and webinars. During our webinar, "The BizJet Boom: An Inside Look," which originally aired June 28, Raymond Jaworowski, senior aerospace analyst for Forecast International, asserted that increasing globalization and the pursuit of higher corporate profits is driving the booming demand for business jets. That’s because executives must travel more often to more far-flung regions, to oversee their expanding business empires, which in turn are outsourcing on an increasing basis to remote developing countries.

Globalization and outsourcing figured prominently in an April 11 webinar, "Aviation Maintenance: Trends That Will Affect Your 2007 Bottom Line," in which John Goglia, former member of the U.S. National Transportation Safety Board (NTSB), discussed the pressures that are causing MRO operations everywhere to merge.

The effects of consolidation in the MRO sector also served as the recurring theme in a May 11 podcast, titled: "Safe Outsourcing: How to Ensure Proper Fuel System Maintenance." Our pay-per-view webinars and free podcasts are archived and accessible on www.AviationToday.com.

In the MRO sector, the drive for greater efficiencies and profits all adds up to one thing: the big fish are getting bigger, and the smaller ones are getting eaten up. By choosing to swim with these sharks instead of resisting them, MRO managers can actually improve the quality of their work.