Market Overview
The global aircraft maintenance, repair, and overhaul market size are expected to grow at a CAGR of 46.6% during the forecast period, 2019–2029.
Aircraft maintenance, repair, and overhaul (MRO) is a primary service that deals with rectifying several aviation issues related to navigational devices, engine components, and various other parts. This service is crucial as several airline carriers aim to keep the fleet active for a more extended period, be fuel-efficient, and also increase airworthiness to a higher notch. The overall market is highly organized as the players are regulated by several local and international governing bodies such as the International Civil Aviation Organization (ICAO) resulting in the quality and efficiency of MRO services.
Market Dynamics
Aviation sector’s staggering growth to prompt the market demand
According to the International Civil Aviation Organization (ICAO), the aviation sector has grown remarkably with cargo and passengers being carried to no less than approximately 49 million kilometers annually. With over 26,000 aircraft services, 1,400 scheduled airlines, 3900 airports, and 173 air navigation service providers, the global aviation sector has established an unprecedented worldwide network, thereby offering an array of opportunities for the aircraft maintenance, repair, and overhaul market.
The increasing migration activities across the globe due to regional & political instability, health reasons, education & employment, and other reasons in several countries resulted in increased air travel, thereby providing an array of opportunities for the aircraft MRO market. According to the United Nations Department of Economic and Social Affairs (UN DESA), the global international migrant's rate reached 244 million in 2015. The spanning population diversity in developed countries is one of the primary reasons for international migration, whereas, in the case of developing countries, it is mostly internal migration.
Regional Analysis
Government’s focus toward modernization of airspace industry in north america
North America has witnessed a remarkable growth in the commercial fleet aircraft. Government associations primarily focusing on modernization of the U.S. airspace industry has been effective in fostering the market for aircraft maintenance, repair, and overhaul. The Next Generation Air transportation System or NextGen is a transportation system led by the Federal Aviation Administration (FAA), intending to make air transport safer, predictable, and more efficient. NextGen is setting standards with regards to planning, implementation, and innovation of new airspace technologies and procedures. Moreover, according to the Federal Aviation Administration, the number of aircraft in the commercial fleet is estimated to leap from 7,039 in the year 2016 to approximately 8,270 by 2037, which is an average of 0.8 % growth rate per year. Thus, this growth is expected to provide abundant opportunities for aircraft maintenance, repair, and overhaul market in the region.
“future flight challenge” to spur the europe market growth
Europe has the presence of countries with a strong aviation base such as the U.K., which broadens the area of application for the aircraft maintenance, repair, and overhaul market. According to the Government of the United Kingdom, the region is a leader in the manufacturing, design, and support of wings, engines, and other advanced systems. Besides, the increasing investments to facilitate innovation by government and key players of the market jointly have led to potential market growth. For instance, the Future Flight Challenge initiative undertaken by the Government of the United Kingdom to engender innovation in the aviation sector has an investment of USD 141.65 million. This investment is aimed at developing demonstrators of new aircrafts such as electric aircraft and drones, new airspace management models, and new approaches to ground support infrastructure.
Presence of industrially developed regions in asia-pacific
Asia-Pacific is projected to offer several untapped markets on account of the enormous presence of industrially developing regions such as India, China, South Korea, Indonesia, and others. A great deal of investment by the government and associated institutions have directed the aviation sector in these countries toward the path of innovation and development. According to the Department of Industrial Policy and Promotion (DIPP), the Foreign Direct Investment (FDI) inflows in India’s aviation sector reached approximately USD 2.23 billion between the period 2000–2018.
Growing focus toward infrastructure development in latin america
Latin America offers several growth prospects for the market on account of the proliferation of infrastructure and smart regulations pertaining to the aviation industry. According to the International Air Transport Association (IATA), the passenger growth in Latin America is estimated to twofold by 2034, where the aviation sector’s contribution to regional GDP to observe growth from USD 140 billion to USD 322 billion. Latin America has all the capacity to become a massive market for the aviation sector and associated services because of the emergence of competitive and efficient airlines, favorable demographics, and geography that initiates air travel. According to the International Air Transport Association (IATA), the region’s unremitting focus on infrastructure development to result in USD 42 billion of unrealized economic benefits by the year 2034. This is expected to offer lucrative opportunities for the aircraft maintenance, repair, and overhaul market in the region.
Spin-off technology to bring forth market progress in the middle east
The Middle East has the presence of highly active regions in the aviation sector, such as the United Arab Emirates (UAE). The aviation sector in Dubai is known for its spinoff technology, which means the products are directly developed as a result of the aviation activities that influence the economy across several fields, which includes high precision technology. 3D printing in Dubai can be termed as a spinoff technology in the aviation sector.
Segmental Analysis
Passenger load to trigger cabin interior segment’s growth
The increasing load of passengers demands a broader load space, thereby fostering the cabin interior segment. According to the Federal Aviation Administration, in the year 2016, the domestic load factor increased to approximately 84.7% for commercial air carriers, thereby increasing the scope for the cabin interiors segment. The pressing demand from customers for efficient and quality services from the airlines is accelerating the maintenance segment’s growth. Variants in the onboard facilities such as Wi-Fi connectivity, onboard shopping, and others by different airlines for passenger hospitality have widened the scope of the maintenance segment. The narrow-body aircraft is an airliner with the capacity to board approximately 290-300 passengers, thereby offering several growth opportunities for the market. However, the need for maintenance is high in this type of airline as it boards a large number of passengers.
