MIAMI — The massive re-fleeting underway in North America will keep the aftermarket growth rate nearly flat for the next decade, and the resulting higher-technology fleet will prompt more data-driven services that will change the maintenance landscape, analysts at Aviation Week's MRO Americas conference project.
By any measure, the North American airline market is mature, meaning that while the region's fleet is getting newer, it is not getting much bigger. Forecasts presented by analysts from Aviation Week, Cavok and ICF International show a range of between 400 and 1,300 net aircraft being added to the North American fleet in the next 10 years, with the majority of new deliveries replacing existing aircraft. Aviation Week’s forecast shows a current fleet of about 9,100, growing to just 9,500 in 2024 on the strength of 4,450 deliveries and 4,080 retirements—an anemic 0.5% compounded annual growth rate (CAGR).
The result is a very different fleet mix in 2025, with current- and next-generation aircraft flying many routes currently operated by decades-old technology. These aircraft will produce more data for operators and MRO providers to use for real-time health monitoring and, soon, sophisticated predictive maintenance.
An Oliver Wyman survey released April 13 showed that MRO executives from more than 100 airlines, manufacturers and service providers foresee airplane health monitoring (AHM) and predictive maintenance (PM) as the segment’s most promising new technologies in 2020. In each case, two-thirds of the more than 100 respondents picked AHM and PM, ahead of choices like mobile technology, additive manufacturing, and composite repair developments.
Most of the benefits will accrue to airlines, said Dave Marcontell, a VP with Oliver Wyman-owned Cavok. “By using predictive maintenance, operators can rely on data to limit part failures before they cause system breakdowns, reducing the frequency and length of unscheduled repairs and out-of-service events, and ultimately resulting in less labor and lower piece-part repair costs,” he told the MRO Americas audience April 14.
The Oliver Wyman survey projects that the technology shifts will lead to significant disruption. “We believe these advances could cut or redistribute 15-20% of the total MRO spend,” Marcontell said. “That’s $10 billion-$15 billion."
Manufacturers offering AHM and similar services will surely benefit, while carriers should see reduced maintenance costs. But Marcontell says independent MROs can use the data they collect to cash in as well.
"MROs out there that don’t even own an airplane can start leveraging the computing power and algorithms being developed to better mine the data they are already collecting and own,” he said. "What MRO out there wouldn’t want to know what non-routine or corrective action is going to be required on a part or an airplane before it ever gets to the facility?"
Figures revealed in the forecasts underscore how critical it will be for providers with large stakes in the North American aftermarket to embrace data-driven approaches. Aviation Week projects the North American MRO market of $15.8 billion to average just 1.4% CAGR through 2024, Aviation Week Director, Forecasts and Analysis Brian Kough said. ICF Principal Richard Brown called the market, which ICF put at $18.2 billion in 2014, “basically flat,” projecting a 1.2% CAGR through 2024.
Cavok’s year-by-year breakdown shows the current North American market of $20 billion in 2015 rising to $21.3 billion in 2025, but the timing of retirements and the maintenance honeymoons of new jets replacing them means that the nine years in between will each have annual market sizes of $19.2 billion or lower.
Underscoring the ramifications of re-fleeting, Marcontell pointed out that the decade will see $4.6B in MRO from 1970s-and 1980s-vintage aircraft disappear, while work on aircraft delivered from 1990 to today will add $5.9 billion in MRO demand.