By Helen Massy-Beresford in London
European maintenance, repair and overhaul (MRO) providers must form joint ventures and expand their product portfolios if they are to take advantage market growth of 50% in the next six years, consultancy Frost & Sullivan (F&S) has warned.
The aerospace division of the consultancy estimates the value of the MRO market could grow from $10.6 billion in Europe last year to around $15.2 billion per year by 2012. F&S says engine and commercial aircraft MRO providers will lose out unless they form alliances or otherwise expand their product offering.
“Persistent growth in intra-European air traffic between eastern and western Europe as operators capitalise on growing world trade activities and air transport liberalisation, coupled with the outsourcing trend led by the low-cost operator business model, will underpin steady growth in the European commercial airframe and engine MRO market,” F&S says.
The company predicts that the MRO outsourcing trend will increase “as legacy carriers continue to streamline their business models with the objective of slashing costs and focusing on core activities in response to the proliferation of low-cost carriers.”
In addition, a significant number of relatively new Airbus A320 and Boeing 737 aircraft will need their first heavy maintenance checks and engine removals by 2012, creating a short-term spike in demand for maintenance.
But maintenance providers face a fiercely competitive climate because of the increasing trend towards vertical integration of original equipment manufacturers (OEM) as well as the growing number of lower-cost MRO facilities in eastern Europe and the Far East. And “intensifying demands for flexible commercial/technical solutions in line with operators' re-aligned business models suggest that price is no longer the sole criterion for success, rather perceived value for money is becoming as important,” F&S says.
“MRO providers must be proactive in identifying the life cycles of their service offerings and continuously exploring opportunities to better fulfil customer requirements in what is largely perceived as a commodity market,” the consultancy adds.
External link:
Read extracts from Frost & Sullivan's report into how increasing aircraft utilisation and expanding fleets look set to drive MRO demand in Europe
Source: Flight International
