Higher energy costs are impacting production and MRO . Inflation and rising interest rates affect wages , pricing , company profitability , and the disposable income people have to travel ( and spend on goods and services ). High fuel prices impact airline profitability and fleet types in-service should fuel remain high . Environmental considerations remain crucial and will return to the spotlight .
Rebounding MRO Demand
So far in 2022 , compared to 2019 ( the last “ good year ” before COVID ), European ASKs hit 79 % in May 2022 , compared to May 2019 . This year , recovery has been heading in the right direction and is much better than in 2021 .
This bodes well for European MRO . As we look ahead to MRO Europe in London , the MRO industry is already busy supporting the return to service of parked aircraft and allowing the European airlines to operate a busy summer schedule .
Europe is home to many prominent MRO players supporting airlines worldwide . Many offer multiple products such as broad component support , engine , airframe , and modifications services . Leading MRO players in Europe include a mix of independent players , airline-backed integrators , and focused regional players such as Air France KLM E & M , Lufthansa Technik , Iberia , AJ Walter , SR Technics , Sabena Technics , IAI Bedek , FL Technics , and Magnetic MRO .
2022 air transport MRO spend is forecasted to be $ 84B , according to Aviation Week .
This is driven by engine maintenance , the most significant spend category , at $ 37B ( 45 %), followed by line maintenance at $ 17B ( 21 %). Next is component MRO at $ 17B , 20 % of spending , followed by heavy airframe maintenance ($ 6B ) and modifications ( painting , avionics upgrades , interior retrofits , and cargo conversions ) at $ 6B . North American operators generate the most MRO at $ 22B ( 26 %). Europe is next at 26 % ( Western Europe $ 17B and 20 %, and Eastern Europe $ 5B and 6 %).
Global MRO spending should return to pre-pandemic levels by 2023 . 2022-2031 CAGR growth ( constant 2022 dollars ) is forecasted to be 3.2 %. Airframe maintenance is forecasted to grow slowest ( 1.1 %) due to the retirement of maintenance-intensive aircraft and their replacement by less maintenance-intensive aircraft . Line maintenance is forecasted to grow at 2.3 %, modifications at 2.3 %, and engine MRO at 3.2 %. The fastest-growing segment is components which are forecasted to grow at 4.2 %.
Source : Aviation Week Air Transport MRO Forecast . Naveo Analysis
As for Europe , Europe ( Western & Eastern combined ) is forecasted to grow from $ 22B in 2022 to $ 27B by 2031 , a CAGR of 2.3 %.
Cargo aircraft continue to provide strong demand ( particularly for older aircraft / engine MRO ), driving solid demand for passenger to freighter conversions and providing solid bookings for European suppliers . Given the strong recovery in narrowbody aircraft , we expect to see engine MROs driving the recovery , which is the number one MRO spend .
Aircraft retirements will increase in the coming years ( many older aircraft are due for retirement ), but this depends upon the pace of the recovery , fuel price , and new aircraft production issues being addressed , etc .
MRO growth generates increased demand for aircraft and engine parts . Increased flight activity leads to more AOG events . As MRO recovers from COVID-19 , so will demand for new and alternative materials such as USM , part repairs , and cost-conscious workscopes .
48 NORTHWEST AEROSPACE NEWS