(MENAFN- America News Hour)
The military aviation maintenance, repair, and overhaul market registered a value of USD 37.6 billion in 2022, and it is expected to reach USD 49.31 billion in 2031, witnessing a CAGR of 2.79% during the forecast period, 2021-2030. Since the demand for MRO services is a direct proponent of the sanctioned annual defense budget of the nations, COVID-19 had a moderate impact on the market in focus. The ongoing global economic slowdown is anticipated to result in a subsequent decline in defense spending on a short-term basis. However, due to existing regulations and controls, major US-based military MRO service providers are less likely to bear the impact of the wider supply chain disruption caused by the pandemic. However, suppliers and MRO service providers located in Asia-Pacific and South America are more vulnerable to supply chain disruptions and are envisioned to face operational constraints and high financial risk exposure due to supply chain bottlenecks.
The market in focus is anticipated to be driven by a consistent increase in the global military fleet, internal and external security threats, technological innovations, aging global military fleet, joint ventures, and strategic alliances formed to address the specific requirements of the modernization initiatives undertaken by the global armed forces.
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Starting with aircraft maintenance facility management and managing MRO throughout the supply chain, the use of advanced digital technologies is imperative to establish high-efficiency operations. With the advancement in AI and analytics, MRO companies are progressing from centralized maintenance diagnostic operations, through real-time condition monitoring services, to prescriptive maintenance operations.
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Key Market Trends
The Engine MRO Segment is Expected to Dominate the Market During the Forecast Period
The engine is one of the vital components of any aircraft and is required to be maintained airworthy irrespective of the operational status of the aircraft. The increasing complexity of the engine parts and the increased number of military aircraft crashes due to engine failures have resulted in the global armed forces divesting enhanced focus on frequent engine maintenance and periodic checks. The active fleets of several countries are aging at a much faster pace than others due to extreme operating conditions that the aircraft are exposed to regularly. The older aircraft need MRO services much frequently than their newer counterparts to prevent the systems from malfunctioning or becoming obsolete. On this note, several contracts are being awarded for availing MRO services for the active fleets. For instance, Rolls-Royce was selected by the UK Ministry of Defence (MoD) in August 2019 to provide maintenance and repair support for the EJ200 engines of Typhoon fighter aircraft fleet in service of the Royal Air Force (RAF) until 2024. The engine support contract (EJISS) was worth USD 431.06 million, a follow-on to the ten-year Partnered Support Operational Phase arrangement. Similarly, in October 2020, Honeywell announced that it won a five-year IDIQ (Indefinite Delivery, Indefinite Quantity) contract to repair and overhaul its T55-GA-714A engines that operate on the US Army's CH-47 Chinook helicopters. Such developments are envisioned to foster the growth of the engine MRO segment of the market in focus during the forecast period.
North America is Expected to Maintain its Dominance in Terms of Revenue During the Forecast Period
Though Asia-Pacific is expected to be one of the fastest-growing markets during the forecast period, the global market is anticipated to be dominated by North America, sheerly due to its diverse and superior fleet size. Currently, North America has the second-highest military aircraft fleet in the world, and the demand for MRO services is driven by the initiatives to upgrade the existing fleet with the latest technologies and systems. The majority of MRO expenditure is on the region's large fleet of multi-role aircraft, transport aircraft, and surveillance aircraft that require high maintenance for engines and airframes, along with field and component maintenance services. The US Air Force is slowly addressing its aging aircraft problem, as it takes the delivery of newer generation jets. However, the total active fleet of military aircraft has declined since 2000 despite the increasing budget. As inventories decreased, the average aircraft age has increased over the past decade. The average age of the US Air Force fleet is over 25 years, and the bombers have an average age of over 50 years. This necessitates upgrade and regular maintenance to keep the aircraft at par with the newer generation aircraft and extend their service life. The United States envisions achieving an 80% readiness rate for all military aircraft in the future. Such initiatives are expected to propel the growth of MRO activities in North America. However, the market is expected to witness the highest growth in the Asia-Pacific region, with most of the demand being generated from countries like China, India, Japan, and South Korea.
Lockheed Martin Corporation, The Boeing Company, Raytheon Technologies Corporation, BAE Systems PLC, and Safran SA are some of the largest players in the market studied. The market is fragmented, with numerous local and international players providing various MRO services to the existing military aircraft fleets. Strategic partnerships between the players may help them gain more contracts while expanding their reach to untapped markets in the long run. As most MRO contracts are in the long term, it could be a time-consuming process for new players to establish themselves in the market by competing with the existing ones. The COVID-19 lockdown situation across the world is expected to delay some of the existing maintenance programs and planned projects at least by half a year, as players face issues with the supply chain, mainly due to the temporary shutdown of the aftermarket parts manufacturing industry.
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The impact of the same may be visible directly on the aftermarket parts logistics as well. In situations like these, players should adopt novel strategies to keep the business running with the existing inventory, which can help them reduce losses. Besides, the adoption of artificial intelligence (AI)-based predictive maintenance technologies is also envisioned to witness mass adoption during the forecast period. MRO operators use AI tools for planning, predicting non-routine check-ups, triggering part orders, and assigning bays, labor, supplies, and other resources for MRO activities. Potential investments would be required to enhance the IT capabilities of MRO operators for maintenance execution, supply chain management, to enhance mobility, and to adopt e-signatures. Advanced data analytics are also being used by MROs for inventory optimization to plan, stock, and optimize spares as and when required at minimal procurement costs. Such tools enable operators to function efficiently, derive maximum profits, and support the digitization of global aircraft MRO operations.
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Industry Attractiveness – Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION (Market Size by Revenue – USD billion)
5.1 MRO Type
5.1.1 Engine MRO
5.1.2 Components MRO
5.1.3 Interior MRO
5.1.4 Airframe MRO
5.1.5 Modifications MRO
5.1.6 Field Maintenance
5.2 Aircraft Type
5.2.1 Fixed-wing Aircraft
5.3.1 North America
188.8.131.52 United States
184.108.40.206 United Kingdom
220.127.116.11 Rest of Europe
18.104.22.168 South Korea
22.214.171.124 Rest of Asia-Pacific
5.3.4 Latin America
126.96.36.199 Rest of Latin America
5.3.5 Middle-East and Africa
188.8.131.52 United Arab Emirates
184.108.40.206 Saudi Arabia
220.127.116.11 Rest of Middle-East and Africa
6 COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 The Boeing Company
6.2.2 BAE Systems PLC
6.2.3 Elbit Systems Ltd
6.2.4 Saab AB
6.2.5 Lockheed Martin Corporation
6.2.6 General Atomics
6.2.7 Northrop Grumman Corporation
6.2.8 Amentum Services Inc.
6.2.9 Raytheon Technologies Corporation
6.2.10 Rolls-Royce Holding PLC
6.2.11 Safran SA
6.2.12 MTU Aero Engines
7 MARKET OPPORTUNITIES AND FUTURE TRENDS
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