An Industry in Evolution
Fleet growth is not the only reason why Asia Pacific and the Middle East are seeing a lot of maintenance repair and operations (“MRO”) activity. North American operators continue to move maintenance to the region and Europe is following suit as MRO’s in these areas make money, particularly due to cheap labor. Furthermore, sustained growth in passenger volumes and low fuel-prices will benefit MRO providers with continued work.
In this article, FTI Consulting’s Dirk de Waart and Brian Kushner offer their expertise and insight on the evolution of the MRO industry. The article not only examines the industry’s short-term growth, but the challenges that lie ahead for MRO companies. These challenges include an influx of next generation aircraft, competition from original equipment manufacturers (“OEM”) in the aftermarket, the introduction of new technologies and the shift from reactive to predictive maintenance.
- According to a 2016 Frost & Sullivan analysis, Asia Pacific is set to become the second largest region for MRO services by 2024.
- According to 10-year MRO market forecast by Oliver Wyman in 2016, the MRO industry is expected to grow at an annual rate of 3.9% until the end of the 10-year time frame.
- Maintenance of new aircraft will be very difficult for MRO companies that have infrastructure and background systems, the majority of which are decades old.
- The biggest challenge that MROs face is the increasing prominence of original equipment manufacturers; many predict that more companies will begin partnering with these OEMs in order to continue to exist.
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Senior Managing Director, Leader of Private Capital Advisory Services