A look at some of the key aftermarket trends around the globe.
North America
- Technician supply will be challenging over the next five years, which could result in increased labor costs, according to Oliver Wyman
- Some airline MROs are bringing work in-house, including American Airlines and AeroMexico for CFM56-5B repair and Boeing 787 base maintenance, respectively, while Mexico’s Interjet is also looking for in-sourcing opportunities
- The supply chain feels squeezed, especially second- and third-tier suppliers
- Airlines and MROs are increasingly adopting digital tools, from mobile applications to predictive analytics
- Partnerships with Silicon Valley and startups are increasing as companies seek new technologies
Latin America
- MROs in Central America continue to expand facilities; overall, region seeing further investment
- But the Caribbean is still hurting from Hurricane Maria; recovery could take
another 18-24 months - Brazil’s economic rebound should benefit aftermarket businesses this year; Argentina’s economic reforms attract new airlines
- Lack of regional component maintenance is still a concern for carriers
- MRO demand will grow two percentage points faster than the world rate of 3.1%, the Aviation Week 2018 Commercial Aviation Fleet & MRO Forecast says
Europe
- OEMs turn to tech companies for data-driven projects, including Airbus, which developed its Skywise analytics platform with California-based Palantir Technologies, while Rolls-Royce is
working with Microsoft - European independent MROs—such as SR Technics and Magnetic MRO were acquired by Chinese investors; more aftermarket consolidation is predicted
- Labor costs will continue to rise in Central and Eastern Europe
- An influx of new aircraft such as the Airbus A320neo and Boeing 737 MAX into service has airlines looking for new MRO partners
- Modification work will flourish over the next decade
Middle East
- MROs are investing in new technologies such as 3D printing and voice-control systems
- Aftermarket providers are developing engine and airframe capabilities to meet demand for current and new-generation powerplant and aircraft types
- Difficult conditions are predicted for regional independents, but joint-venture routes with OEMs could be promising options
- Economic, political and business factors are affecting Qatar Airways, Etihad Airways and Emirates and related MRO work
Africa
- Existing MRO infrastructure is limited; both facilities and training are in need of upgrades
- Some airline consolidation is occurring
- The continent’s mature fleet will drive MRO demand on older engine types
India
- More overseas work is being targeted by regional MROs such as Air India’s maintenance division, which aims to grow its third-party work to 50% of revenue over the next five years
- Western OEMs and MROs look to domestic partnerships, such as AAR’s new airframe facility venture with Indamer
- Airlines in India gain some relief from high tax and duty fees imposed on spare parts and MRO services; some recently gained relief could help their cost
structure and expansion
China
- Domestic airline growth is beginning to strain MRO capacity
- The country may face a labor shortage, with surging demand outstripping technician supply
- Narrowbody aircraft work will drive MRO demand over the next decade
- Analysts predict steady growth in heavy maintenance rather than a bow wave of shop visits
Asia-Pacific
- Engine and component joint ventures are setting up in Singapore, as are innovation labs
- Low-cost labor markets such as Vietnam and Thailand are increasingly attractive to OEMs and MROs
- There are calls for a regional safety regulator similar to those in the U.S. and Europe
- The region’s carriers are looking at technology investments including RFID, paperless records, 3D printing, drones and data analytics