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Engines and upgrades to drive MRO growth

Growth in the global MRO market is set to outstrip the increase in fleet numbers over next 10 years, according to ICF International, with extra demand predicted for engine services and modifications.

Speaking at MRO Network’s Airline Engineering & Maintenance: North America event, Richard Brown, principal at ICF International, gave an overview of what the consultancy believes the market in maintenance for commercial aircraft will look like in 2023.

ICF predicts that the MRO market will grow by 3.9 per cent each year over the next 10 years, compared with a fleet that is growing 3.1 per cent annually, and will be worth $89bn.

The greatest growth in demand will be seen, of course, in the Asia Pacific region – which is set to spend $7.1bn more on MRO services in 2022 than it did in 2013 – followed by the Middle East and China.

Eastern Europe and the CIS, meanwhile, are expected to spend an additional $2.9bn on MRO, equalling the growth in expenditure predicted in North America.

Despite a growth in spending that is less than half that of Asia Pacific, ICF predicts that expensive fuel and narrowing labour costs will see North American MROs benefit from operators “right-shoring” their heavy maintenance checks.

In terms of what MRO activities will be driving growth the segment predicted to see the fastest growth is aircraft modifications, with ICF predicting revenue increases of 6.4 per cent per year as operators extend the life of aircraft installing winglets, upgrading interiors and investing in inflight connectivity technology.

The biggest driver of revenue overall will remain engine services, however, with the segment predicted to generate more than $35bn-worth of work in 2023, up from $24bn in 2013.

ICF International also predicts that the MRO market will be able to enjoy significant cost savings as a result in the dramatic increase in e-enabled aircraft.

As the fleet of next generation IP-enabled passenger jets increases from 400 to 11,300 over the next 10 years, MROs will be able to use advances in IT technology to: improve prognostics and predictive maintenance; better coordinate maintenance planning and boost productivity; better manage supply chains and parts inventory; and streamline technical record keeping.

The result, it says will be savings totaling hundreds of millions of dollars.

While we are set for a period of significant fleet renewal over the next 10 years, which is likely to see maintenance cycles lengthen, it seems that the increasing number of aircraft in the air and the need to ensure older aircraft are as efficient as possible will generate plenty of MRO work. At the same time advances in IT will enable this work to be carried out more efficiently.

The question is who will benefit most from these developments? The OEMs, the airline MROs or the independents? And will business models need to adapt to fit the evolving environment?

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