OEMs can compound growth opportunities through long-term aftermarket support, finds Frost & Sullivan’s Aerospace & Defense team
Growth in the global military aircraft engine maintenance, repair, and overhaul (MRO) market remains steady, driven by more complex components that demand higher parts cost per MRO activity. Regional tensions in Asia-Pacific due to territorial issues, primarily with China, and interest in new aircraft to counter a Chinese aircraft expansion strategy are further factors augmenting growth. While North America is the biggest source of military aircraft engine MRO revenues, fixed-wing engine repair and overhaul remains the largest spending segment. To sustain growth in a mature and highly consolidated ecosystem, aircraft original equipment manufacturers (OEMs) are focusing on selling new aircraft with long-term aftermarket support.
“The most consistent revenue growth will be in trainer aircraft as their replacement is not tied to unit conversions,” said Frost & Sullivan Aerospace & Defense Research Director Michael Blades. “Other revenue strategies include ‘Power by the Hour’ formulas in the military engine market, especially for transport and training aircraft.”
Global Military Aircraft Engine Maintenance, Repair, and Overhaul Market, Forecast to 2025, is the new analysis from Frost & Sullivan’s DefenseGrowth Partnership Service program. It includes current and expected market developments; drivers and restraints; revenue forecasts across segments such as fixed-wing types, including fighter, transport, special mission, trainer, and unmanned aerial vehicles; and rotary-wing types, comprising attack and utility aircraft. The competitive landscape for major players such as ST Aero, Enaer, Raytheon, Rolls Royce, General Electric, Pratt & Whitney, Northrop Grumman, SABCA, and Ruagare provided.
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Despite aircraft retirements, fewer purchases, more reliable components, and on-conditional repairs lowering the demand, frequency, and cost of engine MRO, moderate growth is expected in the next eight years due to declining labor costs and an increase in engine parts costs.
Regional trends driving growth in the military aircraft engine MRO market include:
· Boost in part prices in North America;
· Delivery of new aircraft and slower retirement of older aircraft in Europe, resulting in higher engine MRO cost per aircraft; Older equipment in Africa;
· Tensions in Asia-Pacific fuelling the need for readiness;
· Fairly new equipment in the Middle Eastern countries; and
· Asianoperators looking for local MRO support.
“In order to simplify military manning fluctuations and location infrastructure, engine maintenance is migrating toward OEM partnerships with local companies, contractors, or military depots,” noted Blades. “New aircraft may have local suppliers that form an aftermarket relationship that includes engine MRO.”
Source: Frost & Sullivan.