The COVID-19 pandemic sure put a big dent in the expected surge of the MRO markets across the world. Pre-COVID19 MRO market was valued at USD 616.01 billion in 2020 as per the Mordor Intelligence Report. It is expected to be worth USD 701.30 billion by 2026. It is no secret that North America and Europe rule the roost when it comes to the highest penetration of global distributors. Currently, North America is the largest MRO market in the world accounting for nearly 40 per cent of the global business while most the MRO market concentration in Asia is confined to China, Singapore, Malaysia and Dubai.
Asia-Pacific – Fastest Growing MRO Market
Asia- Pacific is predicted to be the fastest growing MRO market hubs in the world with Singapore enjoying the stage for the world’s leading MRO hub with 3 per cent of the global market share and 25 percent of Asian market share. More than 100 leading international MRO companies operate from Singapore. Favourable policies, strong network of original equipment manufacturers and availability of skilled manpower are some of the factors that have contributed to the development of the MRO industry in Singapore.
Just last year Airbus opened its new integrated campus of 51,000 square meters in Singapore’s Seletar Aerospace Park as an expansion of its existing site, housing the Airbus Asia Training Centre (AATC). Besides SIA Engineering Company Limited (SIAEC) is all set to develop a new Engine Services Division to grow its engine service business. This division will focus on increasing value to its OEM partners and airline customers to enhance integration in the engine MRO value chain and to strengthen their engine eco-system.
China, with around 300 MRO companies, is another strong contender. As per a forecast by Airbus, China will have around 3,238 aircraft by 2026, which reflects the large and rapidly growing size of the market in China. As per the global Industry Analysts report Japan and Canada are forecasted to grow at 2.2 percent and 2.3 percent respectively. Within Europe, Germany is forecast to grow at approximately 2.8 per cent CAGR. Low labour, service costs, easy access to skilled labour and enhanced service levels, have made Asia-Pacific a highly attractive outsourcing and MRO destination. Asian operators are driving MRO growth with low-cost labour markets such as Vietnam and Thailand. Airline operators worldwide are currently outsourcing nearly 30 per cent of wide-body heavy airframe maintenance needs to China and Asia-Pacific region.
A burgeoning middle class in Asia, especially in China and India, is generating more demand for air travel, which over time will shift the distribution of the global fleet. Besides buying aircraft, China and other Asian nations are also investing in new airport infrastructure and in aircraft manufacturing and aftermarket MRO services to accommodate the rising demand, much of which will be for domestic travel. As a result, Asia is likely to be responsible for a bulk of the growth in the global fleet and MRO expenditures. By the end of the decade, China will become the biggest global market for air travel, and as a region, Asia is expected to increase its share of the global fleet by almost nine percent.
While the aviation industry has started recovering, it is expected to take time to reach to pre-pandemic levels. The outbreak has coerced various regulators and aviation organizations to explore options for ensuring remote working and social distancing. The new policy announced by the Federal Aviation Administration (FAA) is expected to allow the use of remote technology and video links for conducting inspections and validating regulatory compliance amid COVID-19.
Global players mainly focus on the technological development, aftermarket services and enhancing their capabilities to cope up with the ever-rising demand. The post pandemic surge in partnerships, agreements and MoUs are some of the key initiatives taken by the industry stalwarts to boost the MRO sector.
Some of the key manufacturers include Airbus, Boeing Company, AAR Corporation, Bombardier Inc., Embraer S.A., Delta TechOps, General Dynamics Corp., Hong Kong Aircraft Engineering Company (HAECO) Ltd., GE Aviation, Honeywell Aerospace, Lufthansa Technik AG, Rolls-Royce plc, MTU Aero Engines AG, FL Technics, SIA Engineering and Safran SA.
Significant contribution of Engine MRO market
As per the Global Market insight report, the engine MRO services segment will account for 35per cent of the commercial aircraft MRO market share by 2027. Engine MRO includes field maintenance and depot maintenance. Depot-level maintenance of engines includes major repair, material maintenance, complete or partial rebuilding of engines, and parts assemblies. It also contains technical assistance, manufacturing of parts, and testing. Field-level maintenance involves on-equipment maintenance activities and shop-type work. Shop-type work includes software maintenance, repair of subassemblies, commodity-oriented assemblies, and fabrication or the manufacturing of repair components. Engines will dominate the business over the forecast period. Furthermore, the market is becoming more competitive and its dynamics are more complex.
