Asia-Pacific Region To Have Biggest Fleet Size, MRO Value

SINGAPORE—Within a decade, the Asia-Pacific region will surpass others in fleet size and maintenance, repair and overhaul (MRO) market value.

Chris Doan, a Cavok vice president, forecasts the Asia-Pacific fleet to reach 11,687 commercial aircraft in 2025—compared to 8,142 in North America, and 8,096 in Europe. The region’s commercial MRO market will be valued at $34.8 billion in 2025, compared to $21.3 billion in North America, and $24.9 billion in Europe, Doan said while at Aviation Week Network’s MRO Asia-Pacific Conference.

To put these regions in perspective, Cavok’s forecast pegs the global MRO market value at $67.1 billion in 2015, and $100.4 billion in 2025.

The Asia-Pacific fleet includes 6,452 aircraft, and has an MRO market value of $18.3 billion. Doan noted that only a small percentage of the aircraft in this fleet will retire over the forecast period, compared to the global average of 43% in the next decade.

“The mature North America and Western European markets will continue to undergo significant re-fleeting efforts during the next 10 years,” he said.

Compared to only 1,300 aircraft retirements in the Asia-Pacific region and 6,500 deliveries.
Of the 44 countries defined in Cavok’s Asia-Pacific region, the top 10 represent 85% of the fleet—with China having 40%, or 2,467 aircraft. Although China will be a key growth driver for the region, Doan thinks the country’s infrastructure will have a hard time keeping pace with growth. When coupled with its rising labor costs, potential MRO work could spill over to other countries.

Read also:  US and Russia World's Largest Exporters of Weapons in 2012-2016

In contrast, continued investments in capabilities and skilled labor in Indonesia, Malaysia and Singapore should help these countries remain competitive in MRO, which is valued at $2.4 billion in these countries, Doan said.

ICF International also values the current MRO market at $62.1 billion, but forecasts it to grow to $90 billion in 2024, in constant dollars. ICF Vice President David Stewart said the Asia-Pacific region represents 27% of that today.

Even though a lot of focus is placed on how the enormous amount of new aircraft deliveries over the next decade will affect the MRO market, one should not forget that there is a very big market for the existing aircraft, Stewart said. That is because the bulk of new-generation narrowbodies flying in Asia-Pacific today will still be flying in a decade.