Market Trends of Latin America Aircraft MRO Industry
Commercial Aircraft Segment to Occupy the Largest Market Share during the Forecast Period
The region's aircraft MRO market is poised for heightened demand, propelled by a surging commercial aviation sector. This growth is underpinned by rising air passenger traffic, expanding airline aircraft procurement, and bolstered economic conditions in many regional countries. Notably, in 2023, the region witnessed a robust 16.3% year-on-year growth in revenue passengers compared to 2022.
The demand for aircraft MRO services within the region is primarily fueled by airlines making significant aircraft and engine orders. This trend is poised to bolster the MRO segment's demand in the coming years. For example, Aeromexico, Mexico's longstanding airline, unveiled plans in December 2023 to introduce 25 new B737 MAX aircraft and five B787 Dreamliners in 2024. These additions will enable Aeromexico to inaugurate 15 fresh routes connecting Mexico and the US. Notably, in 2023, the airline had already received six B737 MAX 9s and a B787-9 Dreamliner.
Conversely, the region's airlines' focus on maintaining their fleets' airworthiness is poised to bolster this segment's growth. A case in point is Azul Linhas Aéreas, a Brazilian carrier, which, in April 2024, expanded its Airbus Flight Hour Services (FHS) agreements. These agreements, now encompassing over 100 of its A320 and A330 family aircraft, are multi-year contracts with a spectrum of integrated component services. These services range from on-site stock and pool access to repair and engineering services for various rotable parts. By partnering with Airbus, Azul gains access to its engineering prowess and benefits from having local FHS representatives in Brazil. Such agreements are anticipated to fuel the demand for commercial aircraft MRO in the region throughout the forecast period.
Brazil to Occupy the Largest Market Share during the Forecast Period
Brazil stands out as a thriving hub in the global commercial aviation industry. The nation boasts major players like LATAM Airlines Group, which are rapidly expanding and upgrading their passenger and cargo aircraft fleets to align with modernization trends.
Consequently, the demand for aircraft MRO services is surging, fueled by the influx of new aircraft to the region's airlines. A notable example is Joramco, which, in April 2024, secured a contract to conduct heavy maintenance for LATAM Airlines, the largest carrier in Latin America. This milestone was unveiled at MRO Americas 2024. According to the agreement, Joramco is set to begin C-checks on three of LATAM's B787 aircraft, with operations scheduled to start in July 2024. The general aviation sector's demand is primarily fueled by High Net Worth Individuals (HNWIs) preference for business and private jets. In 2023, Brazil boasted around 0.38 million HNWIs. Moreover, by December 2023, the region had 871 business jets actively operating in the general aviation space, all necessitating regular maintenance, a key driver of market growth.
Moreover, Brazil's military aviation MRO market is on a steady growth trajectory, fueled by a rising appetite for MRO services. This demand surge is primarily a response to Brazil's aging fleet of military aircraft and helicopters, necessitating heightened maintenance and repair efforts to maintain operational reliability. As of December 2023, Brazil's military aviation fleet comprised 111 transport aircraft, 121 combat aircraft, 24 special mission aircraft, two tanker aircraft, 121 combat helicopters, and 206 training aircraft/helicopters.
Notably, bolstered defense budgets and a strategic push for modernization are further propelling this market. A case in point is Embraer's collaboration with the Brazilian Air Force in June 2023, where they undertook a midlife upgrade program for the A-29 Super Tucano aircraft. This initiative aims to enhance the aircraft's operational capabilities and extend its service life, underscoring the broader trend driving MRO demand in Brazil. Such developments are anticipated to drive the MRO market demand in Brazil throughout the forecast period.
