Aircraft aftermarket parts market size is to reach USD 43.33 billion by 2030 at a CAGR – 7.63% according to a report by Market Research Future. Forecast period 2021-2023. North America remains the leading market.
Leading Parts Company – Boeing/GE Aerospace/Honeywell/Raytheon Technologies/Textron Systems
There are myriads of components – mechanical, hydraulic, and electronic, housed inside any modern aircraft. Spare parts manufacturing and inventory management and servicing is a burgeoning business consisting of manufacturing fabricating, certifying, maintaining, supplying, and holding as stock, spares, and aftermarket parts. This includes all devices, parts, equipment, accessories, fixtures that are attached, or held as inventory. Massive operations are and will continue to see scale-up for several reasons like robust demand for commercial flights, fleet augmentation, MRO services for aging fleet, new technology for maintaining next-gen aircraft, and fleet coming back into services.
KEY DRIVERS ENABLING GROWTH OF SPARES & INVENTORY
Narrow-Body Segment to Hold Major Market Share
The narrow-body aircraft segment is estimated to hold the major market share of the market, due to the growing demand for domestic flights from low-cost carriers in the Asia Pacific and European regions. The rise in the volume of domestic travel increases the need for aircraft engine maintenance services, landing gears, and other small components related to passenger safety.
The wide-body segment is expected to grow at a significant rate during the forecast period due to the rise in the number of retired aircraft and the subsequent demand for repair or replacement of aircraft components services.
The regional jet segment is anticipated to grow at a steady rate due to the rise in business jets and private jets maintenance service requirements.
Applying Big Data and Digitisation
Induction of Big Data and Digitization in the operational processes are expected to drive the growth of spares and aftermarket parts markets. To ensure accessibility and availability of parts – spares and parts companies have been quick to leverage advanced technology like Big Data that helps streamline operational processes, and assists with predictive maintenance strategies.
Digitisation of the entire MRO process improves the visibility of the spare aftermarket and systems. Visibility thus created, helps with the management of the supply-chain, especially in vastly spread-out locations. Moreover, Next-Gen aircraft are equipped with advanced sensors that generate real-time data which is then analysed for optimising predictive maintenance algorithms and modelling processes.
This ease of processes has given a further boost to the spares and aftermarkets business.
Demand for MRO Services to Propel Market Growth
According to Airbus SAS, the demand for commercial aircraft is estimated to be over 7,200 in the next 20 years. This will facilitate the demand for commercial aircraft PMO parts in Asian countries.
| Globally, the total MRO spend is expected to rise to USD 115.9 billion by 2029, up from USD 81.8 billion in 2019. The major MRO spend is observed in the engine and airframe domain. |
Growth of Used Serviceable Materials (USM)
To overcome the slump in revenue earnings due to the pandemic, airlines are paring losses by resizing their fleet size. This also includes the early retirement of aircraft and the accelerated growth of the commercial aircraft disassembly, dismantling, and recycling industry. This market has witnessed a significant growth rate since 2020, and that has increased the demand for used serviceable materials (USM). Demand for green-time engine offerings will also grow substantially, as will the markets for other expensive-to-overhaul assets such as landing gears and auxiliary power units. MRO activity will reduce with certain aircraft types retiring like the A380, MD80, 737 Classic, and DC-9.
Used aircraft parts will represent 11% of total aftermarket materials spending versus 9% in 2019.
For engine OEMs specifically, they face challenges from green-time engines being used as an alternative for engine shop visits.
Oliver Wyman recently estimated competition coming from these engines could result in a $1.75 billion reduction in engine MRO spending.
Demand for fuel-efficient aircraft and 3D printing in aircraft production is driving the expansion of the commercial aircraft aftermarket parts sector as well!
USM growth to the impact Materials market
USM growth impacts each main participant in the MRO materials market. For OEMs of airframe, engine, or component increased USM usage is likely to eat into new parts sales.
Several aircraft aftermarket parts providers such as General Electric Company, the Boeing Company, and other such entities prefer using USM parts from the retired aircraft to cut costs other than purchasing and using aircraft aftermarket parts.
SEGMENTATION of SPARES and AFTERMARKET PARTS BY PARTS TYPE
According to fortunebusinessinsights.com, Rotable Replacement Parts segment is expected to Grow at the Highest CAGR. The market is classified into MRO parts and rotable replacement parts.
The MRO parts segment growth is due to the rising next-generation aircraft and the growing need of the customers’ maintenance demand for such advanced aircraft worldwide.
The rotatable replacement parts segment is anticipated to grow at the highest CAGR during the forecast period. The growth of the segment can be attributed to the increasing demand for scheduled checks such as class A checks, class B checks, and class D checks. The airlines are focusing more on the scheduled checks. However, every aircraft undergoes a complete check and components and systems replacement every six years. This will boost the growth of the market.
Interior Systems is set to witness the Fastest-Growing Segment
The global aviation PMO parts market is segmented into the engine, airframe, interior, cockpit systems, and others based on the component.
The engine segment is estimated to hold the largest aircraft aftermarket parts market share as the cost incurred in the maintenance and parts is high compared to other components.
In February 2021, Uganda Airlines signed a total care agreement with Rolls-Royce, where the latter charged Uganda Airlines on a dollar-per-flying-hour payment basis for maintenance related to Trent 7000 engines.
The airframe segment is expected to grow significantly during the forecast period due to the rise in aircraft modernization programs.
The aircraft interior segment is expected to exhibit a high growth rate during the forecast period given the demand for passenger safety and comfort. Aircraft interior refurbishment and modernizing the older aircraft with technologically advanced interior systems will continue to see an uptick.
The cockpit segment is anticipated to experience considerable growth Due to the emergence of artificial intelligence (AI) and Internet of Things (IoT) based systems and components, the cockpit segment will grow rapidly. Another segment comprises landing gear, wheels, and other components in the aircraft.
REGIONAL INSIGHTS
The global Aircraft Aftermarket Parts market is segmented into regions such as North America, Europe, Asia-Pacific, and the Rest of the World.
The North American market stood at USD 11.45 billion in 2020, and is expected to dominate the global market during the forecast period. This is attributed to maintenance repair and overhaul (MRO) service providers focusing on the rising investment in aftermarket facilities in the U.S. and Canada. Moreover, key players in the aviation PMO parts domain such as the Boeing Company, Collins Aerospace, and other dominant players, are in the US.
The U.S.-based firms have a strong supply chain network for MRO services and aircraft parts. Furthermore, the rise in the demand for standardization of parts manufacturer approval (PMA) processes in the U.S., will boost the market.
Europe is estimated to showcase exponential growth in the forthcoming years. The restructuring of the government norms related to the import and export of the aftermarket parts propel the growth of the market. However, the risk associated with the high fuel prices, the impact of Brexit on trades, labour shortage, and the global trade war may hamper the growth of the European countries.
The market in Asia-Pacific is projected to grow at the highest CAGR during the forecast period. Aftermarket parts providers are investing in establishing aftermarket hubs in countries such as Japan, Singapore, and Australia. This is set to augment spares and aftermarket parts market growth. Adding to this, several local carriers are replacing their fleet of maturing aircraft with next-gen planes.
Big players in the market like Boeing and HAECO have increased their consumables and disposable parts support agreement.
The China aviation PMO parts sector is expected to grow with a healthy narrow-body aircraft and related fleet services facilities in China.
The market in the Rest of the World is expected to grow at an exponential rate during the forecast period. The increasing number of next-generation fleet sizes in countries such as the UAE, Saudi Arabia, and Israel is expected to boost the Middle Eastern region, whereas, the growing aircraft aftermarket storage infrastructure spending by countries such as Brazil and Argentina will favour the market growth.
KEY INDUSTRY PLAYERS
| MAJOR PLAYERS: |
| The Boeing Company |
| Collins Aerospace |
| Honeywell International Inc. |
| General Electric Company |
| Eaton Technologies |
| Meggitt PLC |
| UTC Aerospace Systems |
| AJW Group |
KEY INDUSTRY DEVELOPMENTS SINCE 2020:
US based Barfield Inc., a subsidiary of AFI KLM E & M HAS entered a 3 -year repair agreement with AerCap Materials
Honeywell International Inc. secured an agreement of 10 years with ST Engineering to provide component MRO and warranty repair services to all Asia-Pacific operators. This agreement is for the components installed on CFM International Leap engines.
Barnes Aerospace, a business unit of Barnes Group Inc., announced its long-term agreement of 10 years with GE Aviation, a subsidiary of General Electric Corporation. In this agreement, both companies will collaborate to manufacture the LEAP engine components.
GAL, an EDGE Group company, has created the first regional aviation logistics distribution hub in Abu Dhabi, in collaboration with China National Aero-Technology Import & Export Corporation (CATIC).
Reference Credit:
- Fortunebusinessinsights.com
- Mordor intelligence
- Coherent Research
