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The global MRO spending for commercial air transport in 2018 is expected to reach $77.4 billion, up from $75.6 billion a year before.
Consultancy Oliver Wyman is projecting a compound annual growth rate of 3.5% over the next five years to $91.9 billion by 2023, according to a report from the company.
However, over a 10-year period till 2028, the global air transport MRO market will grow at 4% CAGR, rising to $115 billion.
This is a higher than its earlier forecast that the industry will grow 3.8% annually for ten years, reaching $109 billion by 2027.
Oliver Wyman still expects Asia to be the driver of MRO growth, led by China, whose MRO’s sector is expected to jump 10.6% annually and eventually occupy 16% of global MRO demand. However, they could be hindered by rising labour costs and temporary infrastructure and capacity constraints.
India is forecasted to grow at 5.6% annually, but will represent less than 3% of the market.
The Asia-Pacific region will grow an annual rate of 4%, with MRO demand “rising to equal those of Western Europe and North America”.
Oliver Wyman states that carriers are currently sending nearly 24% of widebody heavy airframe maintenance to Asia-Pacific and China. This would result in “an inflection point where capacity growth within Asia cannot keep pace with the MRO demand of its own countries plus that of foreign operators particularly those in the mature North America and Western Europe regions”.
This could create MRO opportunities in North America, Western Europe, and Latin America.
Meanwhile, North America MRO spending is forecasted to shrink from $19.9 billion in 2018 to $19.4 billion by 2023, then rebound to $23.8 billion by 2028 – presenting an overall growth rate of 1.8% CAGR. Latin America MRO spending, which represents 5% of the total market, is expected to grow 4.7% annually from $3.9 billion to $6.2 billion, but market share will be flat.
In addition, Western Europe MRO will grow at 3% annually from $16.2 billion to $21.7 billion. However, it will lose four percentage points of market share. Eastern Europe is forecast to grow 2% annually thanks to the effects ofeconomic sanctions placed on Russia.
The Middle East could grow at 4.3% CAGR and add over $4.6 billion in MRO spend, and will make up nearly 12% of the global MRO market.
Africa, highly subject to terrorism and political unrest, is still expected to grow three% annually and will retain its current 3% market share.