Aerospace & Defense Maintenance, Repair, & Overhaul Market Size, Share & Trends Analysis Report By Product (Engine, Airframe), By Application, By End Use (Commercial, Military), And Segment Forecasts, 2019 - 2025

Industry Insights

The global aerospace and defense maintenance, repair, and overhaul (MRO) market size was estimated at USD 111.68 billion in 2018 and is expected to expand at a CAGR of 5.4% from 2019 to 2025. The industry is expected to be driven by burgeoning demand for air travel, coupled with delays in fleet renewal due to low fuel prices.

Emerging economies in the Asia Pacific and the Middle East are expected to witness huge growth. This growth is expected to be on account of a substantial hike in MRO spending by airlines due to a hike in regional passenger traffic. Whereas developed regions such as Europe and North America are expected to observe steady growth on account of modest rate of fleet expansion

In 2018, the U.S. accounted for the largest share of 22.9% of the global market for aerospace and defense MRO. However, the country is expected to witness sluggish growth over the forecast period, owing to the shift toward Asian economies due to cheaper labor costs and availability of skilled laborers. However, a rise in defense spending by the government for the acquisition of advanced aircraft is projected to benefit growth.

Aircraft OEMs are focusing on adopting a new business model that allows their key suppliers to function as system integrators for parts manufacturing as well as aftermarket. Emerging economies are witnessing a rise in the number of MRO suppliers, due to low labor costs and joint ventures between system suppliers and aircraft manufacturers.

The aerospace and defense MRO market is predicted to face a few challenges including, geopolitical tensions, economic volatility, as well as a labor shortage. The market is facing an increasing threat of supply chain disruptions, which is expected to encourage the players to adopt digital management. Moreover, the rising threat of aircraft fuel contamination is predicted to boost the demand for MRO activities.

The shift toward advanced materials such as composites for aircraft parts manufacturing is anticipated to change the maintenance techniques. Furthermore, the adoption of data analytics and predictive maintenance is predicted to introduce new sets of maintenance requirements, thereby encouraging industry participants to adopt novel strategies and skills.

Product Insights

Demand for engine MRO services dominated the market, accounting for 38.1% of the revenue share in 2018, owing to the rapid expansion of the fleet, coupled with maturing engines including CFM56 and V2500 in narrow-body aircraft. The segment is expected to witness escalating integration from the OEMs, leading to intense competition.

Airframe maintenance is expected to observe significant growth over the forecast period, owing to the augmenting number of aging aircraft. However, the burgeoning use of advanced materials including high-performance alloys and composites in the production of the airframe is expected to provide superior impact resistance, thereby reducing the necessity for frequent maintenance.

Line maintenance is predicted to witness the fastest growth in demand and is estimated to reach USD 31.15 billion by 2025. The growth can be attributed to the mandatory requirement of aircraft line maintenance at regular intervals, coupled with growing air traffic. Cost intensive nature of line maintenance is anticipated to encourage the airlines to outsource the service.

The growth of component maintenance is expected to be fueled by rising demand from military aircraft. However, strong competition due to higher costs of tooling and lack of better reliability of parts may hamper the growth. Also, increasing price pressure on aftermarket components is expected to pose a challenge for the market participants.

Application Insights

MRO services for narrow-body aircraft dominated the market in 2018 and are estimated to reach USD 86.50 million by 2025. The growth can be attributed to the burgeoning preference for narrow-body aircraft as low-cost carriers, owing to their fuel efficiency, extended range, and higher maximum takeoff weight.

Demand for wide-body aircraft MRO is expected to be driven by an increase in the average age of the wide-body fleet. Besides, a rise in transatlantic air traffic is anticipated to propel the segment growth. The introduction of fuel-efficient wide-body aircraft by the major players such as Airbus, with improved operational efficiency is expected to fuel the growth.

Regional aircraft is estimated to witness sluggish growth in demand for MRO services, owing to a rise in the replacement of these aircraft with narrow-body aircraft. The demand for regional jets is forecasted to decline over the projected period, with an annual decline of 0.5%, which is expected to adversely affect the market growth over the forecast period.

Turboprops are expected to observe an annual decline of 2.4% in fleet size over the forecast period, thereby negatively affecting the market. However, rising demand for advanced military aircraft, including bombers, fighters, rotary fixed-winged aircraft, and military transport aircraft is projected to drive the demand for MRO services.

End-Use Insights

Commercial MRO services led the market in 2018, and are expected to continue the trend over the forecast period. The segment is expected to witness the growth of 5.8%, on account of changing composition global fleet, coupled with rapidly expanding airline fleet to accommodate rising passenger and cargo traffic. Moreover, technological innovations and a rise in the cost of aircraft maintenance is anticipated to aid the growth.

Rising military spending for the acquisition of advanced aircraft, including assault helicopters, attack helicopters, thereby enabling aerial warfare is predicted to drive the demand for military MRO. Also, an increase in the number of military operations across the globe is expected to drive the use of military cargo aircraft for transportation of troops, weapons, and other military equipment, thus propelling the market.

High personnel net worth, coupled with a rise in business travel is expected to be the primary demand driver for business aircraft. Moreover, increasing operational efficiency and improved performance, are projected to drive the market for MRO services for business jets. Declining fleet replacement age for business jets is expected to benefit the MRO industry over the forecast period.

Regional Insights

North America led the market for aerospace and defense MRO market in 2018 and is expected to grow on account of the rapid increase in passenger traffic, coupled with rising military spending. However, the region is projected to observe modest growth due to the maturing aerospace industry in the U.S. Besides, it may face challenges due to lack of skilled laborers.

Despite several challenges such as geopolitical tensions, high airport fees, unreliable safety records, and taxes of fuel, Africa is projected to witness modest expansion in fleet growth, leading to a rise in demand for maintenance, repair, and overhaul services. However, the region exhibits a high level of outsourcing, owing to a lack of investments by airlines in capital intensive MRO activities.

Asia Pacific is estimated to experience the fastest CAGR of 8.8% over the forecast period. The region is expected to witness growth on account of shift of MRO activities from mature economies in North America and Europe to emerging Asian economies including China and India, owing to cheap labor cost and availability of skilled labor force, as well as supply chain advantages.

Europe is expected to witness sluggish growth over the forecast period, owing to the single-digit growth in the expansion of fleet size. Also, political uncertainty regarding Brexit and rising fuel prices are expected to adversely affect growth. However, the rise in military spending by NATO countries may have a positive impact on overall market growth.

Aerospace and Defense MRO Market Share Insights

Increasing the integration of OEMs across the value chain is expected to change the landscape of competition in the market. OEMs are offering long-term purchase packages to the buyers to increase their aftermarket participation. The market has been observing a trend of partial or complete outsourcing of services by airlines to reduce costs.

The market exhibits intense competition, with the presence of established players, market experience, a strong financial base, and a wide geographical presence. The market is highly consolidated in nature, owing to rising mergers and acquisitions, leading to a small number of industry participants controlling the majority of the market share.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2014 to 2025. For this study, Grand View Research has segmented the global aerospace and defense MRO market report based on product, application, end-use, and region:

• Product Outlook (Revenue, USD Million, 2014 - 2025)

  • Engine

  • Airframe

  • Line

  • Component

• Application Outlook (Revenue, USD Million, 2014 - 2025)

  • Narrow Body Aircraft

  • Wide-Body Aircraft

  • Regional Aircraft

  • Others

• End-Use Outlook (Revenue, USD Million, 2014 - 2025)

  • Commercial Aviation

  • Business & General Aviation

  • Military Aviation

  • Other

• Regional Outlook (Revenue, USD Million, 2014 - 2025)

  • North America

    • The U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • Indonesia

    • Malaysia

    • Singapore

  • Central & South America

    • Brazil

    • Argentina

  • Middle East

    • UAE

    • Saudi Arabia

  • Africa