The ever-expanding commercial aftermarket will increase at a compound annual growth rate (CAGR) of 3% over the next decade and produce a record demand of $862.3 billion in MRO services during that period, according to Aviation Week’s 2019 Fleet & MRO Forecast. Helping to drive this is the expansion of the global commercial fleet, which will continue to grow at healthy rates of 2.8% CAGR over 10 years. In 2019, Aviation Week estimates 33,312 commercial aircraft will be in service worldwide, a figure that will increase by nearly one-third by 2028, when 42,679 aircraft are forecast to be operating.
Given the anticipated growth of the commercial fleet worldwide, demand for shop visits—particularly for maturing engine types—will be plentiful and will help drive the engine segment, which Aviation Week expects to account for the biggest proportion of MRO industry spending. Demand in the engine sector is valued at $298.5 billion over the next 10 years and will account for 33% of all commercial MRO expenditures.
Unsurprisingly, the majority of engine work will focus on the maturing powerplants in the narrowbody fleet such as the CFM56 and V2500 families. The CFM56, projected to have nearly 24,000 engines in service in 2019, will see its fleet numbers decline annually over 10 years by a CAGR of 3.3%. By 2028, 17,654 CFM-family engines are forecast to be in service. The rival V2500, made by the multipartner entity International Aero Engines, will see a similar level of decline in its fleet numbers (-3.5% CAGR in 2019-28), with less than 5,000 of the engine type expected to be flying in 10 years’ time.
CFM International will be the dominant player in the engine segment, with forecast data projecting it to hold around 50% of the market by 2028. In a decade, more than 40,000 engines manufactured by the GE Aviation-Safran joint venture are expected to be flying in the global fleet, which is expected to stand just short of 79,000 engines. The rest of the market likely will be divided between GE (17%), Pratt & Whitney (13%), Rolls-Royce (11%) and Pratt & Whitney Canada (9%).
For the widebody engine market, which has seen a string of new models enter service over the past decade, much of the future growth will emanate from the Middle East region, where carriers such as Emirates, Etihad Airways and Qatar Airways have large widebody aircraft orders in place. The Middle East will see an influx of GE9X engines found on the Boeing 777X (1,048), as well as Trent XWB (550) powering the Airbus A350 and the GEnx-1 (484) for the Boeing 787 and 747-8.
Newer engine options, particularly those for narrowbody aircraft, are also anticipated to start making their mark on the global fleet. By 2028, nearly 24,000 Leap-family engines are expected to be in service. The most omnipresent will be the Leap 1B variant for the Boeing 737 MAX. Aviation Week data projects 13,714 deliveries over 10 years. The 1A engine powering the 737 MAX’s A320neo rival will follow but is expected to number far less than the 1B’s projected deliveries (8,222).
Pratt & Whitney’s PW1100G, part of the geared turbofan (GTF) family beset by delays over the past few years, has also started to grow in recent years, and as of November 2018, there were five GTF repair locations worldwide including Delta TechOps in Atlanta and Engine Maintenance Europe Aero in Jasionka, Poland. Pratt & Whitney’s Singapore facility, Eagles Services Asia (ESA), a joint venture between Pratt & Whitney and SIAEngineering, is expected to join the network by the end of 2018.
The influx of new engines will inevitably show up in retirements. This will be the case in Latin America, where older A320s and 737s will leave the fleets of airlines to be replaced by the Leap and GTF over the next decade. This is expected to reach its peak in the region by 2023, when an estimated 285 engines are predicted to be retired by operators. For the industry, the peak is anticipated a year later in 2024, when 2,939 units are expected be leaving the market.
The smaller turboprop engine segment, which will decline in overall fleet size in the next 10 years, will continue to be dominated by Pratt & Whitney Canada and its PW100 engine. Manufacturing the powerplant for dominant turboprop aircraft players ATR and Bombardier while operating in a market with no new entrants, the PW100’s 5,000-strong in-service engines will gradually increase to reach 5,700 units by 2028. Having first entered service in 1984, the engine’s longevity derives primarily from the Asia-Pacific region, with strong markets in North America and Africa, the latter seeing a steady demand for Bombardier Q400 turboprops.
A regional breakdown over the decade will see a deviation from the traditional order. North America, the world’s largest MRO market, valued at $18.4 billion in 2019 and home to its largest fleet (9,371 aircraft), will nevertheless be usurped by Western Europe for maintenance demand over the period. In 2019-28, Western Europe will generate an estimated MRO demand of $189.1 billion, the most of any global region, despite a relatively moderate growth rate over the 10-year period of 1.7%. Second-place North America will produce slightly smaller spending of $187.6 billion and see its MRO growth rate decline over the decade to the tune of -0.3%.
Despite the world’s top two mature regions being home to the most MRO spending, the emerging growth regions will continue to expand at impressive rates. The Asia-Pacific region, which has become a hotbed for Western companies forming engine repair joint ventures in locations such as Singapore, will see a surge of $164.5 billion over the next 10 years, making it the world’s third-largest MRO market. China, with ambitions to grow many of its industry segments, including plans to become the world’s largest aviation lessor over the next 20 years, will experience a sharp upturn in MRO demand. Aviation Week forecasts China’s annual spending of $6.9 billion to nearly double to $11.4 billion by 2028.
Another emerging player, India, with the highest aircraft fleet growth rate of any region in the world, at a projected 10.38% CAGR from now until 2028, will see aftermarket demand of $23.8 billion over the next decade. According to Aviation Week data, approximately 37% of MRO spending in India will be centered on engine maintenance, with a 90-10% split across turbofans and turboprops, respectively.