Strong Year of Commercial MRO Demand Forecasted
The commercial maintenance, repair and overhaul (MRO) industry skyrocketing post-pandemic growth rates will cool in 2025, but forecasters are optimistic that the market is on a flight pattern for another strong year.
“Yes, commercial maintenance, repair and overhaul (MRO) growth rates will slow dramatically compared with the last few years. However, demand is not going anywhere but up—and at a better clip than historical averages,”reported Sean Broderick in the Dec. 20, 2024, Aviation Week.
Aviation Week predicts that MRO industry growth will approach 14 to 15 percent this year based on:
- Operators tackling deferred work while keeping pace with strong demand.
- Older aircraft creating gap-filling as airframers and engine OEMs struggle to meet delivery performance targets.
“But achieving that will not be easy,” warns Broderick. “Adding shop floor capacity and skilled labor is necessary, but expansion alone will not meet projected demand. Even if it could, companies are better off examining a combination of efficiency gains and expansion to meet anticipated upticks.”
Let's take a closer look at seven things that Aviation Weeks says will be trending in 2025.
These MRO 7 Trends are Gaining Steam in 2025
In the same Aviation Week issue as Broderick’s prediction of double digit MRO industry growth in 2025, Lindsay Bjerregaard tagged these seven MRO trends as gaining popularity this year:
- Adding Hangar Capacity: The increasing global aircraft fleet and growing demand for MRO services are driving the need for expanded hangar capacity. James Pozzi in Aviation Week said that as businesses look for space to build new structures, they will “explore alternative options such as erecting temporary hangars and maximizing existing capacity.”
- AI-Enabled MRO: Like the rest of the world, artificial intelligence (AI) is helping revolutionize the sector, enhancing efficiency and predictive capabilities. Deloitte’s 2025 Aerospace and Defense Industry Outlook found that 81 percent of respondents are already using or plan to use artificial intelligence and machine learning (AI/ML) technology. Pozzi says that “as maintenance providers and airlines look to develop more accurate forecasting models, expect developments in the use of artificial intelligence and machine learning to optimize inventory levels. In the near term, this also could play a role in predictive maintenance and capacity management.”
- Mergers and Acquisitions: 2024 saw a flurry of mergers and acquisitions (M&A) activity including an increased interest from private equity (PE) firms who invested heavily in the MRO segment last year. Pozzi predicts “similar deals are expected in 2025, with specific market segments – such as parts repair specialists – ripe for consolidation.” Aviation Week reported in the fall that “Pitchbook predicts that “an influx of PE capital” will flow into the aftermarket, which aligns with the bullish view of the sector among other analysts.”
- Engine Shop Automation: Automation is becoming crucial for MRO facilities to meet increasing demand and improve efficiency. Expect the use of robotics and automation in maintenance processes to grow in 2025, helping to streamline repetitive tasks. Computer vision technology (a type of AI that allows computers to understand and analyze visual data via machine learning and deep learning) is improving accuracy and speed of inspection, which in turn will boost productivity.
- Boosting Aircraft Recycling Capabilities: As sustainability becomes a priority, the MRO industry is focusing on improving aircraft recycling. KPMG says that “despite the often-seen images of plane “boneyards” in the desert, the end of an aircraft’s service life does not equate to the end of its usefulness.” KPMG added that nearly 80 percent of aircraft components can now be recycled, and over 90 percent of an aircraft’s weight can be recycled. Among those aircraft parts most suitable for reuse include: power plants (engines) which can be more valuable than the rest of the aircraft combined, landing gears (worth up to $500,000), auxiliary power units (electrical power, flight controls, avionics, navigation systems), and interior fixtures such as cabin seating which can be reupholstered.
- Vertical Integration: MRO providers and OEMs are increasingly adopting vertical integration strategies. OEMs are moving into the aftermarket services such as providing lifetime maintenance contracts, and MRO providers are expanding capabilities by acquiring specialized repair facilities, developing PMA (Parts Manufacturer Approval) capabilities, creating digital platforms for predictive maintenance, and establishing partnerships with OEMs for data access. Aviation Week reported last summer that the pendulum was swinging from outsourcing to insourcing and expect that to continue in 2025. “The opinion that aerospace outsourcing went too far in the first quarter of this century is certainly popular in some circles,” reported Aviation Week. “Having witnessed the shortfalls of outsourcing, many marquee players in new space and advanced air mobility have pursued business and operational plans with vertical integration as their proverbial North Stars. Many want to own the intellectual property chain of their offerings, from design to the product and adjacent revenue streams to the vehicle’s maintenance, repair and overhaul.
- MRO AAM Partnerships: Advanced Air Mobility (AAM) is creating new opportunities for MRO partnerships. AAM refers to emerging aviation technologies including electric vertical takeoff and landing (eVTOL) aircraft, urban air mobility (UAM) vehicles (such as delivery drones), and autonomous aircraft systems. AAM can create MRO opportunities in 2025 by:
- New maintenance requirements for electric propulsion systems.
- Battery maintenance and replacement services.
- Software and avionics updates for autonomous systems.
- Specialized training for technicians.
- Infrastructure development for charging/maintenance facilities.
“The consensus is that maintenance, repair and overhaul (MRO) market growth will be in the mid-teens in 2025. Engine MRO providers, responsible for about half the global commercial MRO business, will continue to be growth drivers, servicing both current-generation and legacy engines,” wrote Broderick. “Many shops will still be full, turnaround times will remain stubbornly elevated and barring a major change in the pace of aircraft retirements, the surplus parts market will continue to long for material for the most sought-after aircraft and engine platforms.”
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