MRO providers have been urged to invest in more capacity after analysis showed that demand is likely to outstrip supply by 17% by the end of the decade.

A report published by aviation sector consultancy Bain & Company ahead of this year’s Farnborough International Airshow highlighted several factors the sector will continue to face.

It says the “choke point” for commercial is being caused by historically high engine shop turnaround times, up at least 35% for legacy engines and 150% for new generation.

To complicate matters further, the industry is also facing having to keep old aircraft in the air longer due to problems with new deliveries and a lack of qualified engineers.

Jim Harris, co-leader of Bain’s global aerospace and defence practice, said: “Our analysis shows that aircraft engine MRO demand is likely to experience a near-term peak in 2026 and remain constrained through the end of the decade.

“The next large surge in demand from new generation engines will begin towards the end of 2030.

“Unless MRO companies act quickly to close this capacity gap, airlines will face higher costs to operate constrained fleets.

“The financial burden, on top of growing costs to decarbonise air travel, is likely to slow passenger travel growth.”

Bain & Company says MRO engine shop visits deferred during the Covid pandemic have led to significant pent-up demand.

Meanwhile, CFM International LEAP engines and Pratt & Whitney GTF engines are “requiring repairs in much greater numbers than anticipated due to an array of issues, including powder metal contamination”.

The report says that deferred deliveries of new aircraft are seeing airlines continue to rely on aging fleets which also require servicing involving greater complexity and longer turnaround times.

The current challenges for engine MRO is also being exacerbated by a lack of spare parts.

“As airlines delay retiring legacy aircraft (in particular, Boeing 737NG aircraft and Airbus A320ceo models), the supply of used parts is also being impacted.

“USM (used serviceable materials) plays a critical role in a cost-effective, low-risk option to access life-limited parts. For some MRO shops, USM parts cover as much as 30% of total part demand,” says the Bain & Company report.

If MRO capacity continues to grow on its current trajectory, Bain & Company concludes demand for shop visits at the end of the decade will exceed supply by more than 17%.

The consultancy suggested three ways the industry can offset the choke point:

1. Improve engine shop efficiency and productivity ahead of the next demand surge. MRO providers need to work with airlines on forecasts for MRO demand to help mitigate maintenance delays. The use of artificial intelligence (AI) and automation could also boost further productivity gains. For instance, computer vision is improving the accuracy and speed of inspections and boosting the productivity of smaller workforces. AI also can be used to improve knowledge management and employee decision-making and productivity.
2. Expand piece-part repair capacity and access to USM. And by boosting the supply of used and repaired parts, MRO providers help relieve the overall demand for new OEM parts, further reducing repair queues.
3. Build capabilities and scale the business. New generation fleets will be far larger in size to accommodate growing travel demand. MRO providers that plan for that will be able to capture a greater share of shop visits.