BOSTON – July 18, 2024 – Aircraft engine maintenance, repair and overhaul (MRO) has become a choke point for commercial aviation and the capacity shortage is likely to get worse, according to a new study by Bain & Company.

Airlines are now facing historically high engine shop turnaround times (TATs), up by 35% or more for legacy engines and more than 150% for new generation engines, compared to pre-pandemic levels.  These uncommonly long delays to maintain and repair engines are reducing the availability of airline fleets.

“Our analysis shows that aircraft engine MRO demand is likely to experience a near-term peak in 2026 and remain constrained through the end of the decade. The next large surge in demand from new generation engines will begin towards the end of 2030. Unless MRO companies act quickly to close this capacity gap, airlines will face higher costs to operate constrained fleets. The financial burden, on top of growing costs to decarbonize air travel, is likely to slow passenger travel growth,” said Jim Harris, co-leader of Bain’s global Aerospace and Defense practice.

A combination of factors led the industry to this supply crunch. Firstly, MRO engine shop visits deferred during the pandemic led to significant pent-up demand. Then, newer generation CFM International LEAP engines and especially Pratt & Whitney GTF engines are requiring repairs in much greater numbers than anticipated due to an array of issues, including powder metal contamination. In addition, there is insufficient delivery of new generation aircraft due to supply chain constraints and quality setbacks. Deferred deliveries mean airlines continue to rely on aging fleets which also require servicing involving greater complexity and longer turnaround times. And adding to the list of challenges is a lack of spare parts which contributes to longer shop visits.

As airlines delay retiring legacy aircraft (in particular, Boeing 737NG aircraft and Airbus A320ceo models), the supply of used parts is also being impacted. USM (used serviceable materials) plays a critical role in a cost-effective, low-risk option to access life-limited parts. For some MRO shops, USM parts cover as much as 30% of total part demand.

If MRO capacity continues to grow on its current trajectory, Bain & Company’s analysis indicates the demand for shop visits at the end of the decade will exceed supply by more than 17%. That shortfall, in turn, would impede air traffic growth by forcing operators to limit flights and routes.

To improve the situation, the report suggests the following:

 (1) Improve engine shop efficiency and productivity ahead of the next demand surge. MRO providers need to work with airlines on forecasts for MRO demand to help mitigate maintenance delays. The use of artificial intelligence (AI) and automation could also boost further productivity gains. For instance, computer vision is improving the accuracy and speed of inspections and boosting the productivity of smaller workforces. AI also can be used to improve knowledge management and employee decision-making and productivity.

(2) Expand piece-part repair capacity and access to USM. And by boosting the supply of used and repaired parts, MRO providers help relieve the overall demand for new OEM parts, further reducing repair queues.

(3) Build capabilities and scale the business. New generation fleets will be far larger in size to accommodate growing travel demand. MRO providers that plan for that will be able to capture a greater share of shop visits.

In addition to organic growth, M&A provides opportunities to build market share and improve return on sales.

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Editor's Note: For more information or interview requests please contact:

Gary Duncan (London) — Email: gary.duncan@bain.com

Katie Ware (New York) — Email: katie.ware@bain.com

Ann Lee (Singapore) — Email: ann.lee@bain.com

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