The popularity of narrowbody aircraft to increase the demand for modernization

During the last few years the global aviation industry has demonstrated an impressive growth thus naturally prompting the development of the aircraft maintenance market. TeamSAI forecasts that this year the global MRO market will be worth approximately $60 billion and should reach almost $90 billion by 2024. The airframe MRO segment is expected to account for about $18 billion whilst around $9 billion are to be spent on maintaining narrowbody aircraft alone. However, according to industry experts, considering the latest trends most of the upcoming growth is expected to be fuelled by the demand for various modernization services.

Along the steady recovery of the aviation industry worldwide, the MRO business is naturally expected to hold fairly steady in 2014. This also applies to the airframe MRO segment. The statistics from various sources suggest that the largest amount of works in the segment are to be conducted on the Airbus A320, closely followed by the Boeing 737 family. In the meantime, the scope of services to be delivered on these aircraft should reach $7 billion, divided almost equally between Airbus’ products (about $3.5 billion) and Boeing’s machines (about $3.4 billion). For instance, Timco Aviation Services reports that currently the narrowbody MRO accounts for about 70% of their workload and is mostly divided between A320s and B737s. AAR Corp. have also stated that in 2013 approximately a fifth of almost 5 million man-hours spent in their facilities were dedicated to services for B737s with a similar amount of hours spent on servicing the most popular Airbus models.

Such statistics should raise no eyebrows, since the fleet of these aircraft is one of the largest around the globe. Low cost carriers are particularly fond of these models, and their orders just keep getting larger: this year alone almost 1100 new aircraft are to be delivered globally (with almost 60% of them being narrowbodies). However, while the works conducted on these two families are expected to account for almost 75% of the entire airframe MRO segment, the value of C-to-D check-related services planned to be conducted on the aircraft is expected to sum up to only $1 million. According to industry experts, this is so because a large share of the forecasted segment growth should be attributed to the rising demand for various refurbishment services.

Some experts forecast that in 2014 the size of the aircraft modernization-related MRO will grow by around 10%. Their beliefs are largely based on the increasing necessity to grow competitiveness through fleet unification (especially among the merged airlines), the development of on-board entertainment services and the growing need for on-board Wi-Fi systems. Moreover, carriers worldwide are still struggling to cut down on operating expenses. This forces them to consider such options as weight reduction, which can be achieved through cabin modifications and the implementation of lighter materials. Therefore, there is no surprise that such work currently accounts for about 7% of the entire MRO market.

‘Since most carriers are fully satisfied with the performance of the B737 and A320 families, one should expect the share of these aircraft to grow globally. However, as the competition rises, airlines typically try to make the most of their aircraft by investing into interior refurbishment works in order to raise the comfort standards to modern levels,’ says Andrius Norkevicius, the COO of FL Technics Engineering. ‘This naturally raises the demand for the implementation of on-board entertainment systems and Wi-Fi systems. Moreover, as the fuel prices are still very high, various fuel-saving solutions are becoming increasingly popular. For instance, wingtips can offer 1-2% additional fuel-efficiency. Such trends have naturally changed the workload of the MRO providers accordingly.’

Some of the providers report that the same can be said about the regional aircraft operators as well. Timco, for instance, has recently opened a whole new maintenance facility in order to provide services for such aircraft as Embraer ERJ145 and E170/E190 as well as Bombardier CRJ200/700/900 with an added focus on refurbishment and modernization. In addition, while in the past carriers tended to order short-term one type-oriented modernization programs, today more and more airlines opt for programs tailored for the entire fleet. ‘The preferences of the airline customers have a considerable effect on the demand as well. For instance, many passengers who used to fly first or business class are gradually switching to the economy one, thus forcing the providers to raise their comfort standards. Considering this trend accompanied by the demand for weight-reduction and the introduction of such new services as mixed class seats, the pressure on the segment will only increase,’ concludes Andrius Norkevicius, the COO of FL Technics Engineering.