In the past decade, the commercial aircraft MRO industry has steadily gained altitude. Improving economic conditions has fueled the growth in air travel and therefore aircraft usage. In order to cater to the growing demand, new aircraft are being procured along with the introduction of new routes. Several airlines instead of procuring new aircraft are opting to upgrade their existing aircraft fleet which requires overhauling and thus propelling the growth of the MRO industry.
Airlines, in order to maintain their competitiveness, are investing towards the modernization of their existing fleet. Majority of the refurbishment contracts signed are for aircraft interiors. Aircraft refurbishment includes interior and exterior painting, replacing worn upholstery and materials or even complete redesigning of the interior. Refurbishment can also include modifications designed to improve aircraft’s overall performance. Refurbished aircraft can function economically as a new aircraft. In 2013, Alaska Airline decided to upgrade the cabins on all of its Boeing 737-800, -900, and -900ER aircraft. The airlines also announced its plan to introduce new RECARO seats for its 737NG aircraft fleet with an improved in-flight entertainment system. Likewise, in April 2018, Alaska Airlines announced its plan to upgrade its Airbus and Boeing fleet with saf-Tglo SSUL photoluminescent emergency floor-path marking system developed by STG Aerospace for its 116 aircraft. The upgrade work will begin by the end of 2018.
Low-cost carriers are expanding at a fast pace in the airline's industry. Many profitable airlines in the world like that of Southwest Airlines, Ryan Air, and Indigo are low-cost carriers. Low-cost carriers occupy more than 1/4th of the Middle East and Africa airline market, and they are well poised on their way to occupy 1/3rd of the market share in a few years. Thereby, passengers who are willing to pay a substantial amount of money per ticket to travel via full-cost airlines are expecting more facilities, and even regular passengers of full-cost airlines sometimes shift towards low-cost airlines because of reduced fares and little difference in amenities offered. This has been evident in the Indian aviation sector, where even high-income passengers were observed to shift to Indigo from full-service carriers like Jet Airways and Air India. These carriers, which used to have infotainment systems on their aircraft up until four-five years ago, now have removed these systems from their domestic services. As a result, the only major difference that remains between them and low-cost airlines now is the meal that is provided. Thus, full-cost airlines are experiencing the crunch, in the form of lower load factors, than low-cost carriers. In 2015, three out of four most profitable airlines in the United States (barring Alaska Airlines), were low-cost airlines. This trend gives an indication towards the general state of full-service airlines. With such tough competition from low-cost players, full-fare carriers are trying to add value to the services they provided to customers. In order to maintain the growing LCC flights in operating conditions, necessary MRO services should be available thereby driving the aircraft MRO market.
The global market for commercial aircraft MRO will experience the highest growth in the Asia Pacific and the Middle East region. This is mainly due to the growing demand for aircraft fleet modernization in these regions. In January 2017, a Memorandum of Understanding (MOU) was signed between Airbus and China Airlines. Under the MoU, Airbus will provide China Airlines with support in the development of the airline’s maintenance, engineering and technical training capabilities in Taiwan. Airbus will support the carrier’s maintenance capabilities for all Airbus aircraft types operated by China Airlines which includes A320, A350 XWB, and A330/A340 families.
Commercial Aircraft Maintenance, Repair and Overhaul (MRO) Market Major Players: AAR Corporation, AFI KLM, Delta TechOps, GE Aviation, GMF, HAECO, Iberia Maintenance, and Lufthansa Technik among others.
Nov 2017: Global Aviation Services leader AAR has announced that they have been selected by Republic Air Inc. for performing heavy maintenance checks on the company’s fleet of 188 Embraer 170/175 aircraft under a four-year agreement.
Sep 2017: AAR, a global aviation services company has announced that they have signed a 10-year agreement to provide for airframe maintenance for Air Canada and also has agreed to acquire two premier aviation facilities.
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