Aviation and aircraft maintenance, repair and overhaul (MRO) is a critical market. Its purpose is to ensures the safety and airworthiness of aircraft or aircraft components in line with stringent regulations.
MRO market trends: what’s the latest? – Over the last decade, the commercial MRO market has experienced steady growth owing to the global economic rise, an increase in demand for air travel and expanding global fleet. However, the COVID-19 pandemic provided a setback during the last 12 months or so. According to the International Air Transport Association (IATA), the global aviation industry lost over $118 billion in 2020 and dozens of airlines seek bankruptcy protection or stop flying entirely as a result. During the crisis, cash preservation and cost control remained a priority for airlines, which also resulted in bad news for aerospace manufacturers and maintenance, repair, and overhaul (MRO) service providers.
Many people consider the term MRO a buzzword in the aviation industry. It has been used in a general way to refer to different companies within the aviation market.
But what does MRO stand for? What is the role of MRO aviation companies? Keep reading as we disclose all the details for you.
What does MRO stand for in aviation?
MRO represents maintenance, repair, and overhaul. This term is commonly used in aviation to label any major maintenance facility, whether as part of an airline, an aircraft maintenance unit, an aircraft maintenance facility, or a military facility.
While it is true that the term has been generalized to refer to many different companies in the industry, it is also true that all of them revolve around the maintenance of aircraft. This is the real reason to use MRO aviation to categorize those organizations.
MRO facilities
An MRO facility is a building, like a workshop or a hangar, which engages professional maintenance of aircraft. Moreover, some MRO facilities provide other engineering services and the inspection of engines, landing gear components, and other aircraft components to guarantee safety.
Therefore, MRO technicians and equipment help ensure flying aircraft runs safely and reliably by using their ground support equipment.
MRO services are not limited to the maintenance, repair, and overhaul of commercial airplanes. The most comprehensive aircraft MRO services can cover all of the following: (a) Commercial aircraft (b) Corporate jets (c)
Helicopters (d) Other special aircraft.
It is essential to notice that, although the term MRO facilities involve a significant industry area, the business models can be very different from one MRO facility to the other.
How does Aircraft MRO work?
As it was mentioned above, MRO involves a series of activities that go from component repair through maintenance activities to overhaul service. It was also mentioned that there are different business models, so we will do our best to describe how aircraft MRO works.
Before we speak about the business models, let’s take a closer look at the activities performed by aircraft MRO services.
Leading players in aviation MRO market
GE Aviation – GE Aviation was founded in 1917 and counts 104 years of operation in the global MRO market. The American MRO giant is headquartered in Evandale, Ohio, the United States. GE Aviation, an operating unit of General Electric, is a global provider of jet and turboprop engines, as well as avionics and engine maintenance for commercial, military, business and general aircraft. The company’s products, services and activities are subject to a number of regulators such as the U.S. Federal Aviation Administration (FAA), the European Aviation Safety Agency (EASA), and other regulatory bodies.
Lufthansa Technik – Lufthansa Technik can be traced back to 1951, predating its parent company, the German national carrier, Lufthansa (LHAB) (LHA). However, the company currently operating under the name Lufthansa Technik was established in 1995. Lufthansa Technik is the world’s leading provider of aircraft maintenance, repair, overhaul and modification services from commercial civil aircraft to VIP and special mission aircraft. Lufthansa Technik is based in Hamburg Airport (HAM), Germany, with other important sites situated at Frankfurt Airport (FRA) and Munich Airport (MUC).
ST Aerospace – ST Aerospace, a subsidiary of ST Engineering, was established in 1967 to provide maintenance and support services to the Republic of Singapore Air Force (RSAF). Since then, it has diversified into various MRO capabilities for commercial and military aircraft. Headquartered in Singapore, ST Aerospace has international offices and facilities located at aviation hubs in Asia-Pacific, Middle East, Europe, and the United States. The Singapore-based MRO company has customers in more than 100 countries and employs approximately 8,000 staff across the globe.
Rolls-Royce – Today, Rolls-Royce Holdings, which is owned by Rolls-Royce (established in 1904), designs, manufactures and maintains engines for the aerospace industry. The British engineering giant primarily focuses on aircraft engine MRO and its development. Rolls-Royce powers more than 35 types of commercial aircraft and has over 13,000 engines in service around the world. Key Rolls-Royce customers include aircraft manufacturers and commercial air carriers such as Boeing, Airbus, Air China, Qatar Airways or Emirates. Additionally, Rolls-Royce has a wide network of engine repair and overhaul service centered across the globe, most of which are in Europe and the United States.
HAECO – Hong Kong Aircraft Engineering Company (HAECO) is an independent aircraft engineering and maintenance, repair and overhaul group. Its head office is on the grounds of Hong Kong International Airport (HKG).
Pratt & Whitney – Pratt & Whitney is an American engine manufacturer also known for its wide network in engine MRO services. Pratt & Whitney, a subsidiary of Raytheon Technologies, was established in 1925. As one of the biggest aircraft engine manufacturers and aircraft engine MRO providers, it competes with GE Aviation and Rolls-Royce, although it has also formed joint ventures with both companies. P&W is headquartered in East Hartford, Connecticut, United States.
Air France Industries and KLM Engineering & Maintenance – Air France Industries and KLM Engineering & Maintenance (AF KLM E&M), a subsidiary of Air France-KLM Group, was founded in 2004. Their headquarters are in Tremblay, France. The business operates in three major maintenance segments: airframe maintenance, engine maintenance and component support (electronic, mechanical, pneumatic, hydraulic). However, AF KLM E&M is also responsible for a range of services, including line, predictive maintenance, and technical training services. The European MRO service provider employs approximately 14,000 people and provides services to around 200 airlines. AF KLM E&M supports 2,800 commercial aircrafts.
Aircraft maintenance is the performance of tasks required to ensure the continuing airworthiness of an aircraft or aircraft part, including overhaul, inspection, replacement, defect rectification, and the embodiment of modifications, compliance with airworthiness directives and repair.
The maintenance of aircraft is highly regulated, in order to ensure safe and correct functioning during flight. In civil aviation national regulations are coordinated under international standards, established by the International Civil Aviation Organization (ICAO). The ICAO standards have to be implemented by local airworthiness authorities to regulate the maintenance tasks, personnel and inspection system. Maintenance staff must be licensed for the tasks they carry out.
Major airworthiness regulatory authorities include the US Federal Aviation Administration (FAA), European Union Aviation Safety Agency (EASA), Australian Transport Safety Bureau(ATSB), Transport Canada (TC) and Indian Directorate General of Civil Aviation.
Accordintg to Wikipedia.org, The Maintenance, Repair, Overhaul (MRO) Market was US$135.1 billion in 2015, three quarters of the $180.3 B aircraft production market. Of this, 60% is for civil aviation: air transport 48%, business and general aviation 9%, rotorcraft 3%; and military aviation is 40%: fixed wing 27% and rotary 13%. Of the $64.3 billion air transport MRO market, 40% is for engines, 22% for components, 17% for line, 14% for airframe and 7% for modifications. It is projected to grow at 4.1% per annum until 2025 to $96B.
Airliner MRO should reach $74.3 billion in 2017 : 51% ($37.9B) single-aisles, 21% ($15.6B) long-range twin-aisles, 8% ($5.9B) medium-range twin-aisles, 7% ($5.2B) large aircraft, 6% ($4.5B) regional jets as turboprop regional airliners and 1% ($0.7B) short range twin-aisles.[19] Over the 2017–2026 decade, the worldwide market should reach over $900 billion, led by 23% in North America, 22% in Western Europe, and 19% in Asia Pacific.
In 2017, of the $70 billion spent by airlines on maintenance, repair and overhaul (MRO), 31% were for engines, 27% for components, 24% for line maintenance, 10% for modifications and 8% for the airframe; 70% were for mature airliners (Airbus A320 and A330, Boeing 777 and 737NG), 23% were for “sunset” aircraft (McDonnell Douglas MD-80, Boeing 737 Classic, 747 or 757) and 7% was spent on modern models (Boeing 787, Embraer E-Jet, Airbus A350XWB and A380).
In 2018, the commercial aviation industry expended $88 billion for MRO, while military aircraft required $79.6 billion, including field maintenance. Airliner MRO is forecast to reach $115 billion by 2028, a 4% compound annual growth rate from $77.4 billion in 2018. Major airframe manufacturers Airbus, Boeing and Embraer entered the market, increasing concerns about intellectual property sharing. Shared data-supported predictive maintenance can reduce operational disruptions. Among other factors, prognostics helped Delta Air Lines reduce maintenance cancellations by 98% from 5,600 in 2010 to 78 in 2017.
Insourced maintenance can be inefficient for small airlines with a fleet below 50–60 aircraft. They have to either outsource it or sell its MRO services to other carriers for better resource utilization. For example, Spain’s Air Nostrum operates 45 Bombardier CRJs and ATR 72s and its 300-person maintenance department provides line, base maintenance and limited component repair for other airlines 20% of the time.
Airframe heavy maintenance is worth $6 billion in 2019: $2.9 billion for C checks and $3.1 billion for D checks, Aviation Week & Space Technology forecasts a growth to $7.5 billion in 2028 – $3.1 billion C and $4.2 billion D – for $70 billion over 10 years, 10% of the overall market compared to 40% for the engines.
Useful links
What is an aviation MRO?
Leading players in aviation MRO market
Airworthiness Groundcrew Line-replaceable unit Maintenance Resource Management Maintenance (technical) Professional Aviation Maintenance Association RAMS Shop-replaceable unit