The end of 2019 saw a commercial aviation aftermarket buoyed by record MRO spending but one still skeptical that its well-documented capacity constraints will be alleviated in the near- to mid-term. The engines segment, which accounts for 42% of the market according to Aviation Week’s Fleet & MRO Forcast 2020 data, is evidence of this. While overall commercial MRO spending reached $24.3 billion for last year and is expected to jump to $34.7 billion in 2020, the surge in shop visits has left many providers running close to capacity for 12 months a year at shops worldwide.
The narrowbody engine segment, mainly the CFM56 and V2500, which account for more than half of the market combined, is particularly lucrative at present. Demand for these engine types is strong, with shop visits for their newer engine variants – the V2500-A5, CFM56-5B and CFM56-7 – are all expected to peak by the mid-2020s. However, their successor engines, the CFM Leap and Pratt & Whitney’s PW1000G, have seen technical issues over the past few years, meaning the expected influx leading to the phase-out of older engines hasn’t materialized very quickly. As it stands, many in the industry believe the CRM56 and V2500 will be operating well into the 2030s.
Other mature engine programs have also shown longevity, which has had some detrimental effects on capacity. “Demand for services for older legacy engines, such as the CF6-80C2, has continued longer than expected – thanks to low fuel prices and air transport demand, where demand for aircraft engines is faster than delivery rates,” says Martin Friis-Petersen, senior vice president for MRO programs at MTU Aero Engines. “Also, new-generation engines are entering the shops earlier than originally anticipated and will ramp up in the next decades. All this has let to our shops and many others being fully loaded worldwide.”
On top of these issues, a more recent development has been the technical woes that dogged the Boeing 737 MAX program last year. With the aircraft yet to return to service, the expectation is that this situation will continue well into the year, likely increasing demand for older aircraft and their engines. While retirements could provide relief for the used serviceable material shortages that are prevalent, any potential return to service of the 737 MAX could be key to driving that trend, says Mike Stengel, senior associate at consultancy AeroDynamic Advisory.
“Fleet demographics certainly suggest that a wave of retirements is coming. However, if the teething problems on the new-engine models continue, then older aircraft may remain in service longer than expected. The return to service of the MAX will also influence retirement rates in the coming years to replace the last generation of narrowbodies,” he says.