MRO market to grow 4% annually to $115 billion by 2028

19 March 2018 Authored by Consultancy.uk

The global aviation fleet is set to see solid growth, up 4.2% annually to 2028, when a total of more than 32,000 plans will be operational. A new study shows that the MRO market will see comparable growth in the same period, up by 4% on average to around $115 billion. The Chinese market is set to see the most growth, while engines are increasingly the focus of maintenance.

Commercial aviation is set to see solid growth over the coming decade, buoyed by increasing demand from Asia, as well as replacement and repair of current and future fleets. To better understand the impact of the changes on the MRO segment, Oliver Wyman has released its latest industry focused report, titled ‘Global Fleet and MRO market Forecast Commentary’. The report is based on the firm’s analysis of data from the IMF among other sources.

Global fleet by aircraft class

The global fleet is set to see significant growth over the coming decades, as total aircraft numbers hit almost 38,000 by 2028. Growth is set to be the most significant between 2018 and 2023, with the fleet size up by 4.2% annually on average to 32,300 planes. The years to 2028 will see growth of 3.3% meanwhile. The fleet is set to become younger overall, with older planes being retired – fleet age will fall from an average 11.2 years in 2018 to 10.5 years by 2028.

In terms of plane type, the narrow-body type is set to see the most significant increase – on the back of growing domestic and regional demand. The category is set to increase by 5.2% overall to 2028, totalling almost 25,000 units. Wide-body jets will see growth of 3.4% over the period, while regional jet and turboprops are projected to see slight declines, of -0.9% and -0.5% annually respectively.

Growth rates by region

India and China are marked as the most solid movers until 2023, at 11.7% and 10.4% annually, respectively. The Asia Pacific as a whole sees growth of around 5% for the period, while Western Europe and North America clock 3.5% and 1.5% respectively.

Demand in China and India are both set to tail off slightly between 2023 and 2028, to 5.8% and 7.2% respectively, while Europe falls to 2.1% and North America drops a small 0.1% to 1.4%. Overall China will see growth of around 8.8%, India 8.7% and the Middle East will see growth of 4.7%.

MRO market forecast

The growth in fleets is set to be a boon for the MRO segment, even while the practicalities are set to change. Overall, the industry will grow to around $115 billion by 2028, up from close to $80 billion this year – at CAGR 4%. The engines segment is set to see the strongest growth, at 4.9% CAGR to 2028, on the back of higher temperature and pressure designs, while airframes – the quality of which has improved significantly – will see slower 2.2% growth. Components are projected to see a modest rise, up by 4.5% per annum over the coming decade.

Growth in demand for MRO service is likely to create various pressures, with employment in the segment already cited as an issue in some regions.

Total MRO spend by region

Regional MRO spending increases which reflecting regional fleet growth will be the most significant in China, where the projected spend is set to increase from around $6 billion to around $18 billion over the next decade. The Asia Pacific region will see more modest increase from a little under $15 billion to around $21 billion, while Western Europe and North America climbed around $5 billion and $4 billion respectively.

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