Market Trends of Aircraft Engine MRO Industry
This section covers the major market trends shaping the Aircraft Engine MRO Market according to our research experts:
The Commercial Aviation Segment Dominates the Market in Terms of Market Share
The commercial aviation segment currently has the highest market share, and it is expected to continue its dominance during the forecast period. This is majorly due to the large fleet of commercial aviation compared to military aviation and the high cost of engine maintenance cost compared to general aviation. In recent years, several new contracts have been signed for the maintenance of aircraft engines between airlines and MRO service providers. For instance, in November 2021, SR Technics signed a Memorandum of Understanding (MoU) with Vietjet Air to provide MRO services for CFM56-5B engines onboard Vietjet's Airbus A320 and Airbus A321 aircraft fleet. The agreement was signed worth USD 150 million. Under the contract, the company is expected to provide engine maintenance, component requirements, repair, technical, and training services. It will set up a new Aviation training center as a joint venture between Vietjet and SR Technics.
Similarly, MRO service providers are expanding their presence in various countries to cater to the growing demand for commercial engine MRO services. In this regard, in September 2021, S7 Technics announced its plan to open a new engine maintenance facility at Sheremetyevo airport (Moscow) to overhaul CFM56-5B and -7B engines and Honeywell 131-9A/9B auxiliary power units (APU). The maintenance capacity of the new shop is expected to reach up to 100 APUs and up to 42 engines per year.
Multiple such service provider partnerships with commercial carriers are extending long into the forecast period for continued service of aircraft engines to be airworthy and safe for flight. Due to these partnerships, the commercial segment of the market is expected to lead the market with the highest market share during the forecast period.
Asia-Pacific is Expected to Generate the Highest Demand During the Forecast Period
Asia-Pacific has experienced significant growth in the total aircraft fleet over the past decade, which has increased the demand for engine MRO services and is expected to lead the market during the forecast period. This has resulted in several MRO service providers from the United States and Europe establishing their maintenance facilities in this region. Furthermore, several airlines have partnered with engine MRO service providers to reduce overseas maintenance costs to develop in-house capabilities. For instance,
Air China, in September 2022, announced that they are entering a Joint Venture (JV) maintenance, repair, and overhaul (MRO) facility in China. The new facility, Beijing Aero Engine Services Company Limited, will provide MRO support on the Rolls-Royce Trent 700, Trent XWB-84, and Trent 1000 aero engines. Air China and Rolls-Royce each hold 50% of the shares in the joint venture with a contract, accounting for about 2.61 billion yuan (about USD 378.2 million).
Manufacturer investments in the region are also driving high revenues and, consequently, market growth in the region. Safran - a large international aircraft engine manufacturer, in February 2022 announced the opening of a new MRO facility in Suzhou, China. The facility is being set up and is expected to be operational by the end of 2022. The company-owned 5,200 sq meter repair station helps it in strategic commitments, linking it to the company's MRO facilities across the Middle-Eastern and Indian facilities, making the company an optimal choice for MRO services for major airlines globally.
In July 2022, Safran also announced that it would invest up to USD 200 Million to set up its biggest MRO facility in Hyderabad, India. The facility would be capable of handling up to 300 engine shop visits annually, especially catering to the CFM56, Leap 1A, and Leap 1B engines that dominate the Indian market. This large facility is also expected to be used as an MRO facility for Safran's Asian engine customers. Due to several such investments, government incentivization, and the potential increase in passenger influx, the market is expected to witness significant growth rates in the Asian-Pacific region during the forecast period.
