What to watch for in the civil aviation aftermarket in 2020

1 | M&A: Hot, Hot, Hot

Mergers and acquisitions will continue to be hot from all sides, including OEMs and other non-MROs buying, as well as private equity buying and selling. However, expect few large acquisitions because the easy pickings are gone, and valuations of any remaining sizable acquisition targets are high.

2 |  Robotics

Robotics are going to start truly taking off within MRO for improving safety and accuracy with tasks such as aircraft inspections, paint removal
and nondestructive testing.

3 |  Drone Inspections

Drone trials will continue to proliferate for aircraft inspections. Could 2020 be the year regulators approve drone inspections as a stand-alone procedure?

4 |  MAX Impact

With a prolonged 737 MAX grounding and growing pressure on capacity, there will be an impact on the aftermarket for the CFM56-3/7B on Boeing 737 Classics/NGs—and possibly even the V2500/CFM56-5 on Airbus A320s—as operators continue to defer maintenance in the short-to-mid-term.

5 |  Parts Shortages

Next-gen engines such as the PW1000G-JM will need maintenance on top of scheduled upgrades, and older aircraft are staying online due to delivery delays, so the shortage of used serviceable material for popular engine types—especially CFM56s, V2500s and CF6s—will be even worse in 2020. This will drive prices higher and also lead to more repair development.

6 |  Southeast Asia

MRO facility growth in Southeast Asia will continue, with new or expanded facilities in places like Batam, Indonesia; U-Tapao, Thailand; and Kuala Lumpur.

7 |  Latin Expansion

Investment is underway as airlines gain partners and expand in-house maintenance services. For example, Brazil’s GOL launched a new business unit in late November, GOL Aerotech. Azul Airlines will open a hangar in 2020 to bring maintenance in-house. Delta plans to invest in LATAM, while United is doing the same with Avianca. Pratt & Whitney opened an engine overhaul center in Belo Horizonte on Dec. 11.

8 |  Big Data

To really accelerate big data analytics, companies need to start sharing more positive outcomes to demonstrate the value of the field and show why companies should consider sharing data.

9 |  Slow Dance

Expect longer approval times for anything a regulator touches and a potential logjam for FAA certification projects if ODA is scaled back.

10 |  'Let’s Just Get Along'

Strife over foreign repair station approvals could erupt if the FAA carries out the U.S. Congress’ mandate for revamped oversight.