US airplane MRO market remains flat coming decade

13 May 2015 2 min. read
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The aviation MRO market in the US will stay relatively flat between 2015 and 2025 a recent report from Cavok finds. While the total fleet is expected to increase at an annual rate of 0.9%, the small addition of capacity is not enough to add further on MRO as more advanced monitoring and technology reduces demand.

Recent analysis from Cavok, an aviation consulting subsidiary of Oliver Wyman, explores the aviation market. The report, titled ‘Turbulence Ahead Disengage the Autopilot’, looks at the projected changes in the aviation market that will affect the multi-billion dollar Maintenance, Repair, and Operations (MRO) market in the US between now and 2025.

US skies
The coming ten years will not see a great deal of growth to the absolute number of US planes in the sky, with a growth rate of 0.9% the total number of planes will increase from 7,420 to 8124. However, while the number of planes in absolute terms is not set to increase drastically, the fleet makeup will continue to change as more than 3,100 planes are retired, replaced by the addition of more than 4,100.

Top 20 North American Airlines - by Fleet Size

Of the US fleet, the majority of planes is in the hands of the big four operators, with Southwest Airlines, United Airlines, Delta Airlines and US airways flying almost 50% of total passengers in the region.

The retirement and addition of new aircraft is set to change the makeup of the overall fleet in the US, with particularly older planes, those from ’70s and ’80s retired and newer models added. The change in the vintage of the fleet will see $4.6 billion of MRO leave the market, while the addition and continued maintenance of the fleet will see an increase to MRO of $5.9 billion in the next ten years.

Fleet airline makeup

Flat MRO
Over the whole period the MRO segment is projected to remain relatively flat. With different planes requiring different kinds and levels of MRO, and with the retirement of old plane and addition of new planes with newer technologies, particularly engines will see growth by 2025, while airframe and line will continue to be flat. Over the period as a whole the market will average $19 billion, $1 billion under the spend in 2015, although in 2025 spending is forecasted to increase to $21 billion, which at the time will amount to nearly a quarter of the global MRO market.

The change in fleet to include more planes that have advanced technology requiring less maintenance as well as more advanced self-monitoring technology, will mean decreased demand on MRO. As a result, Cavok advises MRO suppliers that they “will need aggressive and innovative plans for growth” if they want to remain competitive in the market.

North American MRO Market Forecast