Increasing Regional Air Travel Coupled with Growing International Demand for Cost-Effective Services to Power the Asia Pacific Engines MRO Market
SINGAPORE--(BUSINESS WIRE)--Rising air traffic, resulting in the procurement of aircraft, is driving growth in the Asia Pacific commercial aircraft engine maintenance, repair and overhaul (MRO) market. Competition is set to intensify as MROs upgrade their service capabilities in response to fleet expansion. At the same time, airlines are redefining their business models. They are envisaging operational cost cuts through more intense air traffic usage, which will also result in heightened demand for maintenance services.
New analysis from Frost & Sullivan, Asia Pacific Aircraft Engines MRO Market, finds that the market earned revenues of $3.77 billion in 2006 and estimates this to reach $6.68 billion in 2013.
“In comparison to North America and Europe, the Asian aviation industry lags considerably in terms of traffic, trade and unity, primarily due to the difference in governmental policies across various countries in the Asian sector,” comments Frost & Sullivan Research Analyst Donald Ivan. “However, when compared to growth in other continents, Asia reflects incredible growth of close to 20% on a yearly basis, creating a platform for the Asian airline industry to catch up with its counterparts across the world.”
Soaring demand for air travel in Asia is encouraging airlines to increase the number of services not only across regions, but also across continents. In order to leverage this demand, airlines are pushing their fleet to optimum usage. As the demand for air travel has to be met through increased services, engines are being put to maximum task.
“The output in returns will be immense as these engines are subject to maximum utilization,” notes Ivan. “The time period of service is minimized as the engines will come for repairs and services much in advance than the stipulated time, a factor that will evolve into a driver for the engine market.”
However, engine service centers require high financial investments and technically skilled labour resources. As new aircraft are being deployed to cater to the demand for air travel, it will take a minimum of one year for the first engine to come in for heavy maintenance. Until then, the returns through general service and maintenance will be at a bare minimum and so the break-even period will have to be extended further.
Another challenging aspect is the delay in the manufacturing process that forces companies to postpone their delivery schedules to clients. This factor is presently experienced by many airlines that have placed new orders. This can further delay the return on investment and increase the reluctance of service providers to proceed with their expansion plans.
“Total Support and OnSupport are major strategies being followed by market leaders like Rolls Royce and General Electric,” observes Ivan. “This is a way to keep customers within reach so that they realize the benefits of returning to the OEM for the services that have been promised by the engine manufacturers.”
This strategy will hinder independent MROs or engine service centers aiming to initially grab a share of this lucrative market. Independent MROs have to compete with OEMs who can leverage their brand name and competencies in order to capture any business outside the contractual business.
“The only solution is to strategically analyse the present scenario with regard to infrastructure and resources and work towards building up a brand name that does not focus solely on engine overhaul and services, but considers MRO as a complete product portfolio of services,” advises Ivan. “If brand positioning meets cost, quality and turnaround time parameters determined by customers, then India and China stand poised to emerge as global leaders of MRO services and activities.”
If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the investment analysis and growth opportunities in the Asia Pacific Aircraft Engines MRO Market, then send an e-mail to Donna Jeremiah, Corporate Communications, at djeremiah@frost.com, with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.
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