AMSTERDAM—Consultancy firm ICF International has forecast that modifications work will be Europe’s fastest-growing maintenance, repair and overhaul (MRO) segment over the next 10 years.
The overall value of the continent’s maintenance industry is expected to rise from $17 billion to $21.3 billion by 2025.
Speaking at Aviation Week’s MRO Europe, Jonathan Berger, ICF’s vice president, said modification work in Europe will increase by 1%, accounting for 8% of Europe’s MRO market, until 2025. MRO spending on engines is set to experience the largest absolute growth, retaining its 39% share of the segment. The growth predictions also see a 2.3% growth rate for Europe, which has seen its MRO segment’s growth stagnate in recent years compared to other regions, such as Asia-Pacific and North America.
Heralding what he deemed “a new golden age of aircraft cabin interiors,” Berger detailed how modifications demand is being driven by airlines “seeking differentiation in the cabin and customer experience,” leading them to alter the seating configuration of their fleet, adding premium economy options and equipping a growing number of jets with Wi-Fi.
According to Berger, Europe will also be a sizable contributor to overall MRO spending on new-generation aircraft (such as Boeing’s 787 and the Airbus A350), which is projected to rise 2,000% from $1 billion this year globally to $11.1 billion in 2025.
Tom Cooper, vice president of the consultancy Cavok, delivered its 2016–26 Global Fleet and MRO Market Forecast at the event. He identified the spate of anticipated aircraft retirements as a key commercial-aviation trend which will affect the maintenance sector.
As it stands, the majority (47%) of operators questioned by Cavok stated they begin planning retirements 3–5 years in advance.
With nearly half of the overall global fleet expected to be retired by 2026, the majority of which entered into service in the 1990s, Cooper predicted a boom in used serviceable materials (USM) over the next decade, with an increase in their availability and use. He stated that greater utilization of USM material, particularly in 1990s-vintage aircraft, will directly impact material pricing, and could potentially reduce the cost of an engine shop visit by 10–20%.
However, there will be challenges. Cooper identified the dominance of OEMs on the USM market; Cavok predicts manufacturers will control around 80% of the segment in five years’ time. In contrast, airlines will only hold a 10% share, while MROs account for just 5%.