A shrinking commercial aircraft fleet will slow the growth of the global maintenance, repair and overhaul (MRO) industry over the next 10 years, but the near-term outlook depends heavily on how American Airlines emerges from bankruptcy, according to an industry forecast by Team SAI.
Airline spending on MRO is expected to grow by 5.7% this year to $49.5 billion, Chris Doan, chairman and chief executive officer of Team SAI, told the MRO Americas conference on 3 April.
"It's being driven by the fleet mix and the fact that there's more efficiency due to these newer airplanes," Doan says.
After being stagnant for several years, the average age of airline fleets across the world has grown younger since 2009. Aircraft age has declined from 12.2 to 11.9 years over that span, and the trend is expected to continue over the next decade, Doan says.
As a result, spending on MRO services will grow to $68.4 billion, says Doan. Although the trend shows growth, the 2022 number is less than anticipated in a similar forecast from a year ago, he says.
Other forecasters, however, are more optimistic. Kevin Michaels, vice president of ICF SH&E, predicts that MRO spending will increase from $50.9 billion in 2012 to $76 billion in 2021, with the major increases in spending coming from China, the Asia-Pacific region and the Middle East.
Meanwhile, in the short-term, the industry is closely watching American Airlines' emergence from bankruptcy protection. Between American Airlines and American Eagle, the two carriers spend about $2 billion annually on MRO. It is not clear if parent AMR will decide or be forced to either keep that work in-house, or out-source.
"That $2 billion at stake is driving interest," Doan says. "How American emerges could be a real game changer in the business."
Source: Air Transport Intelligence news
