The global aerospace and defense MRO market size is projected to reach USD 161.60 billion by 2025, according to a new report published by Grand View Research, Inc. It is expected to expand at a CAGR of 5.4% over the forecast period. Expanding aircraft fleet coupled with increasing fleet replacement age is anticipated to propel the growth.
Intensified demand for air travel, driven by a rising disposable income of consumers from the emerging markets is likely to have a positive impact on the growth of the market for aerospace and defense Maintenance, Repair, and Overhaul (MRO). Burgeoning adoption of advanced aircraft by various government agencies to increase their defense capabilities is projected to propel the market growth. Also, a longer in-service period of aircraft is expected to benefit the market growth.
The aerospace and defense MRO market has been witnessing an increasing integration by the OEMs, which is expected to intensify the market rivalry. The market participants are trying to focus on creating additional value by adopting business models that span across the product life cycle. This has led to exponential growth in several strategic alliances, including mergers and acquisitions, leading to intense competition.
Despite a large number of potential opportunities, the new entrants are expected to face operational hurdles due to infrastructure, regulatory, and geopolitical challenges. Furthermore, the presence of established players, controlling a large market share and a strong foothold of the market players coupled with the capital intensive nature of the business is expected to restrict entry to the new players.
Further key findings from the report suggest:
- Line maintenance is expected to be the fastest-growing product segment with a CAGR of 6.3% over the forecast period owing to mandatory schedule periodic line maintenance of aircraft, coupled with growth in passenger and freight traffic
- Narrow-body aircraft accounted for the largest market share of 53% in 2018, owing to rise in replacement of regional jets and turboprops with single-aisle aircraft
- Military MRO is projected to witness significant growth over the forecast period, on account of rising initiatives by the governments to strengthen its defense with the procurement of advanced aircraft
- Asia Pacific is projected to witness the fastest CAGR and surpass North America over the forecast period, due to a rise in passenger traffic in developing economies in Asia, especially in China and India
- The aerospace and defense MRO market participants compete based on proximity to the customers, geographical presence, skilled labor force, and service cost to gain greater market share