Aircraft engines MRO providers are forecasted to lose $1.5 billion in revenue as airlines turn to green time engines from parked aircraft amid the pandemic to preserve cash.
Speaking at Aviation Week Network’s MRO Asia-Pacific on Sept. 22, Oliver Wyman partner David Stewart said airlines will defer engine shop visits and utilize more green time engines from parked or early retired aircraft. The average age of aircraft retired early is almost 22 yrs. for the Airbus A320 and 18 yrs. for the Boeing 737NG.
The consultancy has already revised its 2020-2024 engine shop visit estimate from 50,000 to 40,000, of which another 5,000 will be displaced by green time engines.
Global engine MRO revenue is expected to fall 38%, from $37 billion in 2019 to $23 billion this year, and is not expected to recover to 2019 levels until 2022. Oliver Wyman expects Asia-Pacific to drive the recovery, estimating a 4.2% annual growth rate after 2025, and doubling 2019 levels to and reach $21 billion by 2030. Together with China and India, the three markets will make up 39% of global MRO market.
Narrowbody engines will take the lion’s share over the next decade, with the CFM56 and LEAP family contributing to 23% and 14% of total shop visit respectively.
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