Market Trends of Europe Aircraft Engine MRO Industry
Commercial Aviation Segment is Projected to Dominate the Market During the Forecast Period.
The commercial aircraft segment currently dominates the market and is expected to continue its dominance during the forecast period. This was primarily due to increased worldwide airline purchases for newer aircraft to replace aging fleets and extend their service offering. The growing demand for commercial aviation results from increased global air passenger traffic, which has driven carriers to purchase new-generation aircraft to assure profitability.
Airlines like Austrian Airlines, TAP Air Portugal, British Airways, Air France, Alitalia, Lufthansa, and KLM Royal Dutch Airlines are some airlines in the region with an average aircraft fleet age of more than 11 years, demanding higher aircraft engine MRO. Several airlines in Europe are adding newer aircraft to their fleets, which may further generate demand for the engine MRO over the next decade. For instance, in March 2023, The Lufthansa group ordered 22 more wide-body aircraft from Boeing and Airbus to replace older aircraft. In total, the order of 15 A350s from both variants and seven additional Boeing B787-9s is placed by Germany's Airlines Group. 108 long-haul orders, including the Airbus A350, the Boeing B787, and the Boeing B777X, are outstanding for this group. Such developments are expected to fuel the growth of the commercial segment in the market.
United Kingdom to Experience Significant Growth During the Forecast Period
The UK market is anticipated to register the highest CAGR during the forecast period owing to the robust procurement of commercial aircraft from the airlines due to the region's recovering passenger traffic. The UK military has more than 30 aircraft models in service for decades. Though the country is modernizing its aircraft fleet, several aircraft with the armed forces are over 30 years old. Rolls-Royce, one of the prominent players in the European aircraft engine MRO market, is based in the UK and is also a dominant player in the global aircraft engine MRO market.
On the other hand, British Airways, the flag carrier of the UK, has an aircraft fleet with an average age of more than 17 years as of 2023. The airline is adding new aircraft to its fleet, which is expected to increase the demand for engine MRO in the country. For instance, In July 2022, IAG, the holding company of British Airways, ordered 37 A320neo family aircraft, including 12, by converting existing options to commercial orders for A321neos. IAG has planned to order 25 aircraft of the A320neo family, with the option of purchasing 50 additional aircraft. The orders will be delivered between 2025 and 2028 to replace A320ceo family aircraft in its short-haul fleet. Such contracts are expected to help the country's revenue growth during the forecast period.
In addition, the UK recorded the highest general aviation activity in the region, with business jet aviation and helicopter flying being the top activities in 2022. The region's higher general aviation flight activity is anticipated to generate a higher demand for engine MRO. All these factors are expected to bolster the market prospects of the UK in the years to come.
