GROWTH MARKETS & ANALYSIS

Markets in the Asia Pacific aerospace and defence MRO sector have recorded maximum growth, securing the lion’s share of 30.8% in 2024. This is on account of countries like China and India rapidly establishing themselves as economic powerhouses, whose demand for both civil and defence aerospace budgets are ever increasing. Japan, too, is investing substantially in advanced MRO services to support the country’s growing fleets. With a massive aviation infrastructure boost in the APAC region, the entire aviation ecosystem stands out as a dominant growth market, assuring no less than top-of-the-line, cost-effective maintenance services. Global and regional investors are players who see the benefits of investing in the Asia Pacific aerospace and defence MRO market.

China stands second in the global aerospace and defence market, and the growth is burgeoning with fast-paced development in the commercial aviation space. This will naturally fuel a similar growth story for its MRO services sector. China’s military leadership position in the world order will grow with the country’s and region’s defence ambitions.  So will be for their own defence MRO industry. The Chinese government initiatives will bring many investments in aerospace infrastructure, a huge growth area.  Moreover, the country is blessed with a population of technological innovators, and domestic aircraft manufacturing is poised to move northward. Boost then in their indigenous MRO services. China is the fastest-growing regional market in Asia Pacific and is projected to reach USD 32,225.2 million by 2030.

Other countries in the region with developed aerospace and MRO ecosystems is Singapore, Japan, Malaysia, amongst others, and now holding pride of place is India. Malaysia is expected to reach a projected revenue of US$2,629.6 million by 2030. A compound annual growth rate of 7.4% is predicted for Malaysia’s aerospace and defence MRO market up to 2030, according to studies conducted by Grand View Research. This is impressive and a healthy contributor to the APAC aviation growth story.

UAE aerospace and defence MRO market in West Asia

The UAE aerospace and defence MRO market is expected to reach USD 3,389.5 million by 2030. The UAE market is expected to grow at a CAGR of 2.2% from 2022 to 2030, with its Engine segment proving to be not only lucrative but the fastest growing during the forecast period.

Singapore Aerospace and Defence MRO Market

Singapore aerospace and defence MRO is an established and mature market that is reputed for providing premium services, an advanced economy, whose aerospace MRO is expected to reach USD 15,252.2 million by 2030, growing at a CAGR of 7.9% (for period 2022 to 2030). Easily taking the lead for reliable, and stringent services, the below image will indicate the country’s earning capacity in the MRO business.

While the country’s diverse clusters of aerospace companies find Line Maintenance the most profitable segment, the engine segment picked up the largest share of revenue. The Economic Development Board (EDB) of the country has done much to boost Singapore’s high-ranking image in the region, where aerospace is one of the 8 industries in focus. The Board further endeavours to promote Singapore as a highly competitive and innovative provider of aircraft MRO services, as also aircraft parts production. Investments in its MRO sector will help the market retain its hub position in the APAC region. Approximately 150 aerospace companies have acquired nearly 25% of APAC’s MRO industry in the region.

U.S. Aerospace and Defence MRO Market

The aerospace & defence MRO industry in the U.S. is fragmented, but has a dominating position in the global market on account of established aircraft OEMs, aircraft component manufacturers, and MRO services providers, for a long period. Leading US companies in the industry will give an idea of its significance in the global scheme of things – Boeing, Cessna, Raytheon Technologies, General Dynamics Corporation, Lockheed Martin, GE Aviation, Northrop Grumman, MTU Aero Engines AG, and BAE Systems. These companies have spread their representative offices across the globe, and often with solid collaborations. The revenues of this gigantic MRO industry in the US are expected to reach USD 31,494.9 million by 2030, with a growth at a rate of CAGR of 3.9%, from 2022 to 2030.

Again, in this market too, the Line Maintenance segment is tipped to be the fastest growing during the forecast period. This is on account of the large and aging military fleet, which need to be kept in operational readiness and maintained accordingly. Fleet modernisation in this vast commercial market too offers great MRO scope.

Europe for Compliance and Safety Standards

Europe Aerospace and Defence MRO Market is well established, being centre of some of the major global aviation manufacturers with both commercial and military fleets. Hence, the demand for MRO services is continuous. Importantly, the European regulators’ stringent mandates mean more of compliance and pristine maintenance. The manufacturers of global standing dominate the market – Airbus (big commercial and military aircraft), Dassault Aviation (high-end business jets), ATR (Airbus joint venture with Leonardo), and Daher (TBM and Kodiak light aircraft). Moreover, France’s GIFAS, an industry body provides an ideal platform to bring together nearly 400 aerospace companies, to share and communicate, and cooperate to achieve technological, design, development, marketing, and maintenance excellence.

INDIA – The Fastest Growing Market

India’s geographic location in Asia, a cost-effective and skilled workforce in aerospace, government initiatives to promote self-reliance in defence manufacturing, and infrastructure push is creating a strong foundation for growth, which is being globally recognized. More recently, the Indian government has signed up with global OEMs such as Dassault for manufacturing fuselage for the Rafale military aircraft. Airbus has tied up with Tata Advanced Systems Limited (TASL), to indigenously build the C295 military transport aircraft in India. Such is the faith that global OEMs repose in India, for a workforce who can be expected to produce technical excellence and above all deliver same in a cost-effective manner.  All this is catapulting the country as a key player for a global audience in the aerospace and defence MRO market.

Positioned as the third-largest market worldwide in terms of air passengers, the role of the Maintenance, Repair, and Overhaul (MRO) industry is a critical one in ensuring a safe and sound aviation sector. Ensuring the airworthiness and availability of aircraft across commercial and defence aviation is a significant part played by MROs. The sector includes Original Equipment Manufacturers (OEMs), airline operators, service providers, vendors and manufacturers of parts and spare components. Therefore, the business opportunities are growing and in varied sectors such as airframes, engines, components, line maintenance, aftermarket parts, and latest technologies. The potential is huge with projections of a growth rate of 9.1% by 2031. Such numbers indicate that there is a tremendous scope for investors. The Indian MRO landscape is poised for transformation and change, impacting the entire APAC region, and beyond.

This growth has been due to factors such as industry-friendly policies rolled out by the government, which positively impact increasing the demand for MRO services. As per a NITI Aayog report, the Indian MRO market is expected to reach US$ 4 billion by 2031, reflecting a strong CAGR of 8.9%, significantly outstripping the global average of 5.6%. With orders from Indian carriers abuzz, with over 1400 plus aircraft orders, imagine the maintenance checks required. According to NITI Aayog, the Indian passenger traffic is seeing a robust annual growth which is reflected in the aircraft movements and a corresponding demand MRO service for the increasing aircraft movements jumping from 11,73,875 during the period April to August 2024 from 10,91,569 during the same period last year, marking a 7.5% growth. Under the guidelines of the National Civil Aviation Policy (NCAP) 2016, the MRO industry in India has been given infrastructure status, thus opening the sector for financing and tax incentives. Furthermore, reduction in customs duties on MRO services, makes India’s domestic MRO sector competitive.

Opportunities in India

Currently with over 90% of MRO supplies in India imported, there is a huge opportunity for domestic manufacturing under the government’s ‘Atmanirbharta’ appeal. Jobs, skilling, parts manufacturing, technological advancements are all opportunities that are being considered as business growth areas. Encouraging aircraft maintenance within India and incentives thereof, ease of doing business for such units, all bode well for sustained growth of the aerospace and defence MRO industry. Estimates suggest that figures could reach US$ 3 billion by 2031. Enhancing and modernising defence capabilities announced by the Government of India are all positive signals for MRO service providers and the investor community.