Estimated at $49 billion, the global aircraft maintenance, repair and overhaul (MRO) market is highly fragmented with over a hundred participants. Inclusive of military aircraft MRO, the total amount spent on MRO exceeds the value of new aircraft production. The North American aircraft MRO market is outsourcing almost 55 percent of commercial aircraft MRO work. The figure is closer to 100 percent for business and regional jets.
With almost 41 percent of the global market, the North American aircraft MRO market holds considerable potential. Rising demand from airlines, as well as airports is helping provide momentum for future growth.
New analysis from Frost & Sullivan, "North American Aircraft MRO Market - Investment Analysis and Growth Opportunities," reveals that revenues totaled $20.09 billion in 2005 and can reach $ 26.08 billion in 2010.
At over 7 percent, the fastest growing sector is the engine MRO segment, followed by the heavy maintenance segment. Also slated for moderately high growth is the MRO market for helicopters, at 7 to 8 percent in 2006. The number of new fleet deliveries is helping drive this number.
“In terms of the cyclical turn, the fundamental trends in the North American aircraft MRO market point to a potentially prolonged cycle peak, and increasing fuel prices are also creating modifications to the replacement area in terms of the traditional cycle,” notes Frost & Sullivan research analyst Rani Cleetez. "Further, the Asia Pacific region is seeing the emergence of low-cost airlines, particularly in
Despite such positives, constant terror threats, supply consolidation and rising fuel prices could be a considerable challenge to participants in the North American aircraft MRO market. Each of these factors could impart severe restraints on the overall profitability levels of the North American aircraft MRO market.
In addition, the recent increase in the number of mergers and acquisitions are bringing in new implications on the North American aircraft MRO market. Also, overcapacity still exists and supply consolidation will continue, as supply remains in excess of demand and an increasing number of small start-ups are beginning to enter the market.
“Nevertheless, the increasing demand for low-cost travel and the continuing success of low-cost carriers is further proof of the strong fundamentals that make for a strong growth in the region’s outsourcing,” says Cleetez. “With low-fare carriers looking at innovative maintenance support concepts, in addition to outsourcing almost 100 percent of their MRO work, pure-play MRO companies can benefit from entering into cost-effective, long-term contracts with such airline operators.”
"North American Aircraft MRO Market - Investment Analysis and Growth Opportunities," part of the Financial Benchmarking & Analysis in the Aerospace and Defense Industry, provides a broad financial outline of the current North American aircraft MRO market by highlighting and forecasting the major market and financial trends in the key growth segments. In this research service, Frost & Sullivan's expert analysts thoroughly examine the following markets: business & regional jets, helicopters and commercial aircraft (sub-segments include: line maintenance, heavy maintenance, engine maintenance, and components).
Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1,000 companies, emerging companies and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics. For more information, visit www.frost.com.
