Aircraft MRO Market to Reach USD 120.77 Billion by 2031 Driven by Surge in Air Travel and Growing Economies

Aircraft MRO Market Overview:

The SNS Insider report estimates the Aircraft MRO Market size at USD 81.25 billion in 2023, with a projected CAGR of 5.10% to reach USD 120.77 billion by 2031.

This growth is expected to be fueled by rising investments in MRO software solutions, encompassing functionalities like maintenance tracking, logbook management, flight time monitoring, service bulletin handling, maintenance scheduling, and work order management. Furthermore, significant foreign direct investments in aircraft MRO industries, particularly in regions like India (May 2021), are creating lucrative opportunities. Stringent regulatory compliance mandated by organizations like the Federal Aviation Administration (FAA) and the International Civil Aviation Organization (ICAO) further necessitates regular maintenance, propelling the market growth.

The increasing demand for older aircraft coupled with growing environmental concerns necessitates continuous monitoring and maintenance, creating further traction for the market. However, the MRO industry faces challenges like workforce shortage, rising labor costs, a lack of experienced personnel, and declining interest in technical maintenance jobs among recent graduates. This talent gap is anticipated to impact the industry in the coming years.

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Major Key Players Included are:

• General Electric Company
• Rolls-Royce Motor Cars Limited
• Honeywell International Inc
• United Technologies Corporation-Pratt
• Whitney Division
• Snecma S.A
• Hindustan Aeronautics Limited
• JSC “Klimov”-United engine corporation
• Safran
• Boeing, and other players.

Segment Analysis

By Service Type: The engine overhaul segment is expected to retain the leading market share at over 40% in 2023 due to the significant role of OEMs in engine maintenance activities.

By Organization Type: Independent MRO service providers are projected to hold the largest share at over 45% in 2023, driven by the increasing trend of OEMs outsourcing ancillary activities.

By Aircraft Type: Narrow-body aircraft used for short-distance domestic and regional flights are anticipated to generate the highest revenue in 2031 due to their extensive operation within the commercial aviation sector.

By Aircraft Generation: The new-generation aircraft segment is expected to witness rapid revenue growth. These aircraft offer improved fuel efficiency and compatibility with sustainable fuels, aligning with the industry’s focus on environmental sustainability.

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Right-Sourcing and Strategic Alliances

Rising material prices are a critical factor affecting the MRO sector’s expansion.  To counter this, MRO service providers are forging strategic partnerships with Original Equipment Manufacturers (OEMs) to secure better deals on aircraft parts and components. For instance, in November 2021, Singapore-based SIA Engineering Company (SIAEC) established joint ventures and subsidiaries with leading OEMs like Pratt & Whitney, Collins, Rolls-Royce, and Safran, aiming to develop a comprehensive suite of MRO capabilities.

Recent Developments Showcase Technological Advancements and Strategic Partnerships

December 2021: Lufthansa Technik secured a contract with Frontier Airlines to repair and overhaul CFM56-5B engines, demonstrating expertise in engine maintenance.

December 2021: Korean Air successfully tested drone swarm technology for enhanced aircraft fuselage inspections, highlighting advancements in inspection methods.

November 2021: Safran Landing Systems signed a five-year agreement with China Eastern to perform maintenance on landing gear, showcasing the growing focus on component-specific MRO services.

October 2021: AAR renewed its power-by-the-hour (PBH) component pool and repair support agreement with Flydubai, underlining the importance of long-term partnerships in the MRO sector.

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MRO Providers in Central and Eastern Europe See Minimal Customer Impact of Russia-Ukraine War, But Inflation Concerns Remain

MRO providers in Central and Eastern Europe haven’t witnessed a significant direct impact on customers due to the Russia-Ukraine war. However, concerns regarding the steep rise in inflation rates are impacting gas prices and labor costs across the continent. This could potentially affect operational costs for MRO service providers in the region.

An economic slowdown potentially leads to reduced air travel demand and consequently, lower MRO service needs. Airlines might prioritize maintenance activities for core operational fleets and delay non-critical MRO projects. However, the long-term growth prospects of the MRO market remain positive due to the underlying fundamentals of increasing air traffic and fleet size.

Asia Pacific Dominated with Revenue Share More Than 35% in 2023 Driven by Rapid Aviation Growth

Asia Pacific operates a 3rd of the global aircraft fleet, and this is projected to increase further during the forecast period. Airlines in this region are adept at extending the lifespan of their fleets due to the wide availability of advanced MRO options. The region offers MRO providers a large customer base, attractive investment opportunities, and comparatively lower labor costs compared to other regions. The commercial aviation industry in Asia Pacific is poised for rapid growth over the next decade, driven by the high demand for new narrow-body aircraft, which will necessitate a corresponding increase in MRO services.

Example: Expanding MRO Presence in Asia Pacific

In 2020, Pratt & Whitney strategically expanded its global Pratt & Whitney GTF engine maintenance network by incorporating two new MRO providers in China – Aircraft Maintenance and Engineering Corporation (Ameco) and MTU Maintenance Zhuhai Co. Ltd.

Low-cost labor markets like Vietnam and Thailand are increasingly attractive for OEMs and MROs seeking to set up new facilities and capitalize on regional growth. These developments are expected to propel the growth of the Aircraft MRO Market in the Asia Pacific region.

Key Takeaways:

• The global Aircraft MRO Market is poised for significant growth fueled by rising air travel demand, particularly in emerging economies.
• Strategic partnerships between MRO providers and OEMs are crucial for securing parts, components, and expertise.
• The rise of new-generation, fuel-efficient aircraft will drive growth in the respective segment of the market.
• The Asia Pacific region will likely maintain its dominance due to its large and growing fleet size, favorable investment conditions, and booming commercial aviation industry.

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Table of Contents – Major Key Points

1. Introduction
2. Research Methodology
3. Market Dynamics
4. Impact Analysis
   • COVID-19 Impact Analysis
   • Impact of Ukraine- Russia war
   • Impact of ongoing Recession
5. Value Chain Analysis
6. Porter’s 5 Forces Model
7. PEST Analysis
8. Global Aircraft MRO Market, Organization Type
9. Global Aircraft MRO Market, Service Type
10. Global Aircraft MRO Market, Aircraft Generation
11. Global Aircraft MRO Market, Aircraft Type
12. Regional Analysis
13. Company Profiles
14. Competitive Landscape
15. Conclusion

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