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Southeast Asia Aircraft MRO Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

The Southeast Asia Aircraft MRO Market is segmented by Application (Commercial Aviation, Military Aviation, General Aviation), and Country (Malaysia, Indonesia, Singapore, Thailand, Rest of Southeast Asia). The report offers market size and forecast for all the above segments in value (USD billion).

Market Snapshot

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Study Period: 2018 - 2026
Base Year: 2020
CAGR: 8.98 %

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Market Overview

The Southeast Asia aircraft MRO market is valued at USD 4.2 billion in 2020 and is expected to reach a value of USD 6.5 billion by 2026 while registering a CAGR of 8.98% during the forecast period.

Prior to 2020, the air passenger traffic and new aircraft orders were increasing rapidly in the region, which attracted global MRO players to enter the market and expand. However, the outbreak of COVID-19 caused a severe downturn in the airline and associated industries. Major airlines have now restructured their growth strategies, which include early retirement of few aircraft, postponement of new aircraft deliveries, cutting down the workforce, scaling down operations, and optimizing operational costs, among others. As a majority of the fleet remained grounded for a significant period in 2020, some airlines opted for major maintenance work during this period.

Over the last two decades, Southeast Asia has been making the most of its favorable geographic location by complementing it with state-of-the-art aviation infrastructure. The strategic position of the region and the strong local supply chain have contributed to its position as a preferred location for many MRO companies. Maintenance constitutes a major portion of the financial business model of aircraft operators in the region.

Players from Singapore have established themselves as dominant players in the industry over the years. Following the success of Singapore in the industry, players from countries, like Indonesia, Malaysia, and Thailand are trying to replicate the success of Singaporean players and are also developing their MRO capabilities, which is positioning Southeast Asia as an important hub for Aircraft MRO, globally.

Technological advancement in additive manufacturing, predictive maintenance, aircraft health monitoring systems, composite repair capabilities, artificial intelligence, and big data will play a major role in the coming years, as most of the MRO players in the region will opt to streamline their operations through automation to generate higher revenue during the latter half of the forecast period.

Scope of the Report

Aircraft Maintenance, Repair, and Overhaul (commonly abbreviated as MRO) refer to overhaul, inspection, repair, or modification of an aircraft or any of its parts and components. The study includes the revenues sourced from the MRO activities of military, commercial, and general aviation aircraft fleet opting to undergo MRO operations in Southeast Asia. The report also covers the market sizes and forecasts for the market in major countries across the region. For each segment, the market sizes and forecasts are represented in value (USD billion).

Application
Commercial Aviation
Military Aviation
General Aviation
Country
Malaysia
Indonesia
Singapore
Thailand
Rest of Southeast Asia

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Key Market Trends

Commercial Aviation Segment Projected to Exhibit the Highest Growth Rate During the Forecast Period

The growth in air traffic in the region over the years has put pressure on airline operators to maintain their fleet in operational condition. Since Asia-Pacific overshadows the other regions, in terms of new aircraft deliveries, and Southeast Asia, in specific, has become a focal point in terms of the commercial aviation industry growth, the operators in the region are ramping up their capabilities to cater to a growing aircraft fleet that is propelling the demand for aircraft maintenance. For decades, the commercial aircraft Maintenance, Repair, and Overhaul (MRO) market in Southeast Asia have been dominated by established players in Singapore, providing maintenance services for airlines both in and outside the region. However, over the years, several players have entered the market in countries like Indonesia, Thailand, and Malaysia and have challenged the dominance of established Singaporean players. The low labor costs in countries like Indonesia are attracting foreign players to set up their own MRO facilities in these countries. Despite the considerable growth in competition in the market, several major airlines in the region have only minimal in-house maintenance capabilities and outsource most of the work to companies affiliated with rivals or independent service providers. In this regard, the airlines in the region are enhancing their maintenance capabilities to cut out cash outflow to third parties and rivals by developing their in-house maintenance businesses. For instance, the Garuda Maintenance Facility (GMF) by AeroAsia is taking aggressive steps to expand its MRO business overseas, while improving its in-house maintenance capacity in the country to cater to more airlines. In February 2020, the PT Garuda Maintenance Facility AeroAsia Tbk. (GMF) held the inauguration of its latest facilities in the aircraft engine maintenance business line, the single jackscrew gantry system. Likewise, Thai Airways International, Thailand's national flag carrier is also embarking on expanding its MRO business. However, in the wake of the COVID-19 pandemic, the commercial aviation sector has suffered massive losses, and due to the depleting economic reserves of the players as well as prospective future customers, uncertainty now looms over the envisioned MRO projects in the region.

Southeast Asia Aircraft MRO Market_application

Singapore Accounted for a Major Market Share in 2020

Singapore is leading the aircraft MRO market in Southeast Asia. The aviation sector is the major contributor to the development of the Singaporean economy. Despite its relatively small size, Singapore has been one of the fastest-growing aviation markets in the region over the years, driven by the huge tourist inflow and growing business travel into the country. Singapore caters to about 1/4 of Asia’s maintenance, repair, and overhaul (MRO) requirements and 1/10 of the global MRO output, and it possesses comprehensive nose-to-tail MRO capabilities. Singapore’s home-grown aviation companies, ST Aerospace, and SIA Engineering are among the top MRO companies in the world, both in terms of revenues and capabilities. ST Engineering, one of the major players in the country, is looking for expansion of its aerospace MRO business, both locally and internationally. While the company is pursuing capacity expansion in countries like the US, it has also recently set up a Joint Venture with Vietnam Airlines Engineering Company (VAECO), a subsidiary of Vietnam Airlines Co Ltd, called Vietnam Singapore Technologies Engineering Aerospace Co. Ltd. In February 2021, the government of Singapore announced a defence budget of about USD 11.56 billion for the year 2021, which is a 12.7% increase over the 2020 defence budget. As majority of Singapore’s fleet is ageing or are due for mid-life upgrade, the demand for military MRO is also expected to grow during the forecast period. At the same time, driven by the positive outlook for general aviation demand in the country, several foreign players are entering the market in Singapore. In October 2020, Jetex, an executive aviation provider, has announced the expansion of its global FBO network in the Asia-Pacific region with the addition of a fixed-base operator in Singapore. The new FBO , in collaboration with Bombardier expands the Singapore Service Centre at Seletar Aerospace Park beyond aircraft service and maintenance and now offers a full range of services to the business jet operators. Such developments are expected to drive the growth of the market in Singapore during the forecast period.

Southeast Asia Aircraft MRO Market_geography

Competitive Landscape

The market for aircraft MRO services in the Southeast Asia region is moderately consolidated. Singapore Technologies Engineering Ltd, GMF AeroAsia, Safran SA, StandardAero, and Sepang Aircraft Engineering Sdn Bhd are some of the prominent players in the market. For a very long time, the market was dominated by players based in Singapore but the dynamics are now changing and the market is witnessing investments from players into the countries such as Thailand, Indonesia, etc. owing to the growing aircraft fleet and lower labor costs as compared to Singapore. The market is witnessing a huge investment from key players in facility development, technological innovations, joint ventures, and partnerships. Players are focusing on developing their MRO capabilities in the region, making the market more competitive with the entry of new players. In February 2020, Satys, an aircraft paint services provider, announced its partnership with Bombardier for developing its MRO capabilities in Southeast Asia. Satys announced the start of its operations at the Bombardier Singapore Service Center, one of the largest private aircraft maintenance centers (MRO) in Southeast Asia. Such developments are expected to make the market more competitive during the forecast period.

Recent Developments

  • In January 2021, ST Engineering entered into a 10-year agreement with Honeywell Aerospace to provide component MRO and warranty repair services to operators in the Asia-Pacific region for Honeywell components installed on LEAP engines used in the Airbus A320neo family, Boeing 737 MAX, and COMAC C919.
  • In January 2021, Revima Group, which has set up a new landing gear maintenance facility for the A320 and the B737NG narrowbody aircraft in Thailand, announced that it has obtained Part-145 certification from three key agencies, namely CAAT (Civil Aviation Authority of Thailand), EASA, and FAA, and is ready to start its activities.
  • In February 2020, SIAEC announced that it was acquiring a 49% stake in Pos Aviation Engineering Services (PAES) for USD 2.5 million, from Pos Aviation Malaysia. With the addition of PAES's operations in Kuala Lumpur International Airport and nine other stations in Malaysia, SIAEC's network has expanded to 46 airports in nine countries.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size by Revenue - USD billion)

    1. 5.1 Application

      1. 5.1.1 Commercial Aviation

      2. 5.1.2 Military Aviation

      3. 5.1.3 General Aviation

    2. 5.2 Country

      1. 5.2.1 Malaysia

      2. 5.2.2 Indonesia

      3. 5.2.3 Singapore

      4. 5.2.4 Thailand

      5. 5.2.5 Rest of Southeast Asia

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Singapore Technologies Engineering Ltd

      2. 6.1.2 AAR Corp

      3. 6.1.3 MTU Maintenance (MTU Aero Engines AG)

      4. 6.1.4 StandardAero

      5. 6.1.5 Garuda Indonesia (GMF AeroAsia)

      6. 6.1.6 Guangzhou Aircraft Maintenance Engineering Co. Ltd. (GAMECO)

      7. 6.1.7 General Dynamics Corporation (Jet Aviation)

      8. 6.1.8 Safran SA

      9. 6.1.9 Rolls Royce PLC

      10. 6.1.10 ExecuJet MRO Services

      11. 6.1.11 AVIA SOLUTIONS GROUP PLC

      12. 6.1.12 Textron Inc.

      13. 6.1.13 Lufthansa Technik AG

      14. 6.1.14 Sepang Aircraft Engineering Sdn Bhd

  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

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Frequently Asked Questions

The Southeast Asia Aircraft MRO Market market is studied from 2018 - 2026.

The Southeast Asia Aircraft MRO Market is growing at a CAGR of 8.98% over the next 5 years.

The Southeast Asia Aircraft MRO Market is valued at 4.2 Billion USD in 2018.

The Southeast Asia Aircraft MRO Market is valued at 6.5 Billion USD in 2026.

Safran SA, GMF AeroAsia, Singapore Technologies Engineering Ltd, StandardAero, Sepang Aircraft Engineering Sdn Bhd are the major companies operating in Southeast Asia Aircraft MRO Market.

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