(Reuters) – Maintenance firms and spare parts producers who keep airplanes running are bracing for a decline of up to 75% in sales this year – and more pain to follow – as airlines park or retire thousands of aircraft due to the coronavirus pandemic.
Worth about $80 billion in sales last year, the industry ranges from engine makers like General Electric Co and Rolls-Royce Holdings Plc to systems companies like Honeywell International Inc and Raytheon Technologies Corp and a host of smaller suppliers.
Jetliners on average cost $3 million a year to service and make up a significant portion of revenue for most of these firms. That is under threat as the crisis cripples air travel and reduces the number of hours planes spend in the air, pushing back overhauls.
“We foresee reduction in maintenance, repair and overhaul demand of 60% or more for commercial aero engines (in 2020). And production will fall 40-50%,” said Kevin Michaels, managing director at aerospace consulting firm AeroDynamic Advisory.