The aircraft engine MRO market, which was grounded in the early days of the pandemic, continues to recover with a report released in October calling for growth from $30 billion to $49 billion by 2027.
“As a result of a large number of stored aircraft and lower utilization, the aircraft engine MRO demand significantly dropped in 2020. However, in 2021, aviation began to witness a gradual recovery, which led to an increase in passenger traffic and aircraft movements. This has led to an increase in demand for aircraft maintenance, repair, and overhaul activities,” said the report.
The report says growth could be based on:
Fleet Expansion: The rapid fleet expansion plans of the airlines and military forces are anticipated to boost further the growth of the aircraft engine MRO market during the forecast period.
Lack of Defense Funding = Aging Military Fleet: The aging military aircraft fleet in some countries may generate significant demand, as some of these countries have plans to extend the service life of these aging aircraft due to a lack of defense funding.
Next Gen Engines: The introduction of newer generation engines in new aircraft is anticipated to further increase the aircraft engine MRO demand. The new engines will have more expensive material requirements than the older generation aircraft.
Advanced Tech: The introduction of advanced technologies that will digitize and automate maintenance activities to increase overall maintenance process efficiency, reduce the overall turnaround time, and improve safety by the engine MRO players is anticipated to boost the growth of the market in the coming years.
The commercial aviation segment will hold onto its dominant position in the market, mostly due to commercial aviation having a larger fleet than military aviation, and commercial aviation having a higher cost of engine maintenance versus general aviation.
“In recent years, several new contracts have been signed for the maintenance of aircraft engines between airlines and MRO service providers,” says the report.
Recent deals include:
o Engine maintenance
o Component requirements
o Repair
o Technical and training services
o Will set up a new aviation training center as a joint venture
“Multiple such service provider partnerships with commercial carriers are extending long into the forecast period for continued service of aircraft engines to be airworthy and safe for flight,” said the report.
Asia Pacific is expected to see high demand during the forecast period with several MRO service providers from the United States and Europe establishing maintenance facilities in the region, and several airlines have partnered with engine MRO service providers to develop in-house capabilities in Asia Pacific to trim costs.
Among recent activity in the area:
“Due to several such investments, government incentivization, and a potential increase in passenger influx, the market is expected to witness significant growth rates in the Asia Pacific region during the forecast period,” said the report.
The report expects the aircraft engine MRO market to remain competitive with the major players including:
“The major engine MRO providers are entering into long-term partnerships or forming joint ventures to grow their engine MRO customers,” said the report.
One such deal is ST Engineering commercial aerospace business signing a 5-year deal with Safran to provide engine maintenance (shop visits) offload for the CFM56-5B and 7B engines.
“This multi-year agreement will allow ST Engineering and Safran Aircraft Engines to meet the forecasted rise of engine MRO activities as air travel gradually recovers from the pandemic,” concluded the report.
The report did caution that the trend toward long-term contracts in the industry may act as a barrier for new companies to enter the market during the forecast period.