Aircraft MRO is the overhaul, repair, inspection or modification of an aircraft or aircraft component to keep it operational and airworthy.
The MRO ecosystem, basically comprises of OEMs, airline operators, service providers, vendors, and manufacturers of parts/spares.
There is no scope of doubt that the growth in both civil and military aviation is accentuating the demand for MRO facilities which has become an indispensable activity of air assets in the aviation industry.
Also, it is worth mentioning that the expenditure incurred by airlines on MRO accounts for 12-15 per cent of the overall revenues, and with a 3-5 per cent increase per annum
Notably, this is the second-highest expense after fuel cost (45% of operating expenses).
GLOBAL AIRCRAFT MRO MARKET
MRO today is a multi-billion-dollar industry growing at a robust rate year-on-year.
The global aircraft MRO industry was valued at USD 78.60 billion in 2022 and is expected to reach USD 122.14 billion by 2030, growing at a Compound Annual Growth Rate (CAGR) of 5.02% during the mentioned period (2023-2030), as per a recent report by Grand View Research.
Some of the global key players and prominent vendors in the MRO market are BAE Systems, Boeing, Airbus, General Dynamics, Lockheed Martin, Huntington Ingalls Industries, Northrop Grumman, Raytheon, Rockwell Collins, Saab, URS Corporation, and Elbit Systems, etc.
To be noted that the MRO industry is highly regulated and comprises routine checks, repair and scheduled replacement of components, and maintenance during redelivery of an aircraft with the primary purpose of maintaining ‘airworthiness’ of the aircraft.
MRO Segmentation. According to a report by NITI Aayog, MRO services are categorized into four major segments: –
- Engines Maintenance and Auxiliary Power Units (APU)
- Line Maintenance
- Component Maintenance
- Base Maintenance
Figure below provides a brief overview of the four major segments of the MRO industry.
Of these four segments, Engine and APU maintenance constitute almost 60% of the total MRO cost, whereas component, line and base maintenance form around 22%, 8% and 10% respectively
Notably, Engine and APU maintenance is majorly done in the USA, as airlines find it more competitive there as compared to other destinations.
Further, it is to be noted that out of the above-mentioned segments, airframe maintenance is labor-intensive in nature, with labour cost occupying up to 80% of the total cost incurred during an aircraft’s maintenance.
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