Global MRO market to see $100b in spending by 2026

Dubai: The global maintenance, repair, and overhaul (MRO) market in commercial aviation is expected to grow by 4 per cent annually, reaching a value of $100 billion (Dh367 billion) by 2026, according to a report by US-based consultancy ICF.

In the Middle East specifically, the MRO market is expected to exceed the global growth average, growing at a 7 per cent rate, and doubling in size by 2026 to a value of $11 billion — up from $5.4 billion in 2016.

According to Richard Brown, principal at ICF, the growth in spending in the market will come as airlines globally add more aircraft to their fleet. The Gulf’s big three carriers — Emirates, Etihad Airways and Qatar Airways — are alone expected to take delivery of 400 aircraft over the next five years.

As of late 2016, there were 28,000 commercial aircraft in transport fleet around the world — 1,400 of which belong to Middle Eastern airlines. This figure is expected to jump to 38,000 aircraft in service globally the next decade, Brown said.

He pointed out that such an increase in fleet will provide airlines with a great opportunity to leverage big data, with almost half of commercial aircraft globally set to have connectivity and big data built in in the next 10 years.

“If we look at MRO, $67 billion are spent on MRO (globally). Because of the mixed fleets in this region where there’s a large number of wide-bodies … MRO share is relatively higher, so the Middle Eastern share is about 8 per cent of the market. That’s about $5 billion spent by operators,” Brown said in a speech in Dubai at Airline E&M Middle East.

But that growth won’t be without its challenges. Factors such as lower oil prices, competition and politics will impact the profitability of airlines. Brown cited political issues such as the laptop ban last year on direct flights to the US from some Middle Eastern airports, visa restrictions on citizens from certain Muslim-majority countries entering the US, and the GCC blockade, which alone has reduced Qatar Airways’ revenues by 20 per cent and its network by 11 per cent.