Bain study forecasts significant shortfall in future MRO capacity

"Unless MRO companies act quickly to close this capacity gap, airlines will face higher costs to operate constrained fleets," Harris added. "The financial burden, on top of growing costs to decarbonize air travel, is likely to slow passenger travel growth."

Several factors account for the looming lack of MRO capacity, according to the Boston, Massachusetts-based outfit. Engine shop visit deferrals during the pandemic led to pent-up demand. An array of problems, including powder metal contamination, have meant repairs in much greater numbers than anticipated to newer-generation CFM Leap and Pratt & Whitney GTF engines.

Supply chain constraints have led to insufficient delivery of new-generation aircraft. These deferred deliveries mean airlines rely on aging fleets, which also require servicing involving greater complexity and turnaround times. Meanwhile, a general lack of spare parts complicates shop visits.

Used serviceable materials (USM) play a critical role in providing access to life-limited parts. For some MRO shops, USM parts cover as much as 30 percent of total part demand. Delays to legacy aircraft retirements, especially the Boeing 737NG and Airbus A320ceo aircraft, further affect parts supply.

To prevent MRO from becoming a more complex "choke point" for operators, Bain suggests three key planks to a successful MRO service providers' strategy.

First, they should improve efficiency and productivity ahead of the next demand surge by accurately forecasting demand and increasing the use of AI and automation tools to boost productivity gains. Maintenance providers should make every effort to boost the supply of used and repaired parts, thereby relieving the overall demand for new OEM parts.

Finally, MROs should build capabilities and scale the business. “New generation fleets will be far larger in size to accommodate growing travel demand. MRO providers plan for that will be able to capture a greater share of shop visits,” Bain said. “In addition to organic growth, M&A provides opportunities to build market share and improve return on sales.”