by Joy Finnegan, Editor in Chief
Record low oil prices. Record high airline profits. Slow growth in the U. S. and slower than predicted in China. Workforce retirements. Big data. More electric aircraft. Unmanned aircraft systems (UAS). New technologies.
All of those factors and many more impact the MRO marketplace. Every year at this time, industry forecasts are released by the FAA and consulting groups. Let’s take a look at some of the forecast numbers and see what they are saying about our industry.
2015 was the fifth consecutive year of profitability for the industry. The FAA Annual Forecast says, “The 2016 FAA forecast calls for U.S. carrier passenger growth over the next 20 years to average 2.1 percent per year, slightly faster than last year’s forecast. The sharp decline in the price of oil in 2015 is a catalyst for a short-lived uptick in passenger growth in 2016.” The report goes on to say even though oil prices are projected to fall to around $43 per barrel in 2016, their forecast assumes that they will rise thereafter to exceed $100 by 2023 and $150 by 2036, the end of the forecast period.
“Although the U.S. and global economy continued to sputter in 2015, stable demand and lower energy prices resulted in record profits for U.S. airlines. U.S. carrier profitability should remain steady or increase as the recovery leads to strengthening demand,” the report goes on to say. The U.S. commercial fleet is forecast to increase from 6,871 in 2015 to 8.414 in 2036. That is an average annual growth rate of 1.0 percent a year. See the FAA Forecast here: https://www.faa.gov/data_research/aviation/aerospace_forecasts/media/FY2016-36_FAA_Aerospace_Forecast.pdf
Dave Marcontell, VP of Oliver Wyman’s Cavok Group, presented the Oliver Wyman 2016-2026 Global Fleet & MRO Market Forecast at the recent MRO Americas conference in April, agreed with the FAA saying, “Record net profits are due in large part to the glut in the oil market.” Interestingly, their report says that this will not impact the fleet plans of operators. They predict new aircraft deliveries and backlogs will continue to grow. But, Marcontell cautioned, economic growth, interest rates and oil prices could disrupt the equilibrium at any time. See their report at www.oliverwyman.com.
The Aeronautical Repair Station Association (ARSA) in conjunction with Oliver Wyman released a joint MRO market report with the following MRO specific figures. Airframe MRO will account for $16 billion in 2016 and grow to $19.2 billion in 2026. Engine MRO will be around $25.7 billion in 2016 and grow to $43 billion in 2026. Component MRO is on track for $13.1 billion this year and headed for $18.6 billion by 2026. And finally, line MRO is targeted at $12.8 billion in 2016 and aiming for $18.1 billion in 2026. The total forecast for the 2016 year is $67.7 billion growing to $98.9 billion by 2026.
[fullwidth background_color=”” background_image=”” background_parallax=”none” enable_mobile=”no” parallax_speed=”0.3″ background_repeat=”no-repeat” background_position=”left top” video_url=”” video_aspect_ratio=”16:9″ video_webm=”” video_mp4=”” video_ogv=”” video_preview_image=”” overlay_color=”” overlay_opacity=”0.5″ video_mute=”yes” video_loop=”yes” fade=”no” border_size=”0px” border_color=”” border_style=”” padding_top=”20px” padding_bottom=”20px” padding_left=”0px” padding_right=”0px” hundred_percent=”no” equal_height_columns=”no” hide_on_mobile=”no” menu_anchor=”” class=”” id=””][title size=”1″ content_align=”left” style_type=”double” sep_color=”” margin_top=”” margin_bottom=”” class=”” id=””]CURRENT ISSUE[/title][one_third last=”no” spacing=”yes” center_content=”no” hide_on_mobile=”no” background_color=”” background_image=”” background_repeat=”no-repeat” background_position=”left top” hover_type=”none” link=”” border_position=”all” border_size=”0px” border_color=”” border_style=”” padding=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”” animation_speed=”0.1″ animation_offset=”” class=”” id=””][imageframe lightbox=”no” gallery_id=”” lightbox_image=”” style_type=”bottomshadow” hover_type=”none” bordercolor=”” bordersize=”0px” borderradius=”0″ stylecolor=”” align=”center” link=”https://www.avm-mag.com/wp-content/mag/flipbooks/AVM-2016-06-DIGITAL/index.php#Aviation_Maintenance_Magazine/page2-page3″ linktarget=”_blank” animation_type=”0″ animation_direction=”down” animation_speed=”0.1″ animation_offset=”” hide_on_mobile=”no” class=”” id=””] 
[/imageframe][separator style_type=”none” top_margin=”” bottom_margin=”20″ sep_color=”” border_size=”” icon=”” icon_circle=”” icon_circle_color=”” width=”” alignment=”” class=”” id=””][/one_third][one_third last=”no” spacing=”yes” center_content=”no” hide_on_mobile=”no” background_color=”” background_image=”” background_repeat=”no-repeat” background_position=”left top” hover_type=”none” link=”” border_position=”all” border_size=”0px” border_color=”” border_style=”” padding=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”” animation_speed=”0.1″ animation_offset=”” class=”” id=””][title size=”2″ content_align=”left” style_type=”underline” sep_color=”” margin_top=”” margin_bottom=”” class=”” id=””]IssueHighlights:[/title][checklist icon=”” iconcolor=”#81d742″ circle=”no” circlecolor=”” size=”18px” class=”” id=””][li_item icon=””]Editor’s Notebook[/li_item][li_item icon=””]Intelligence: News[/li_item][li_item icon=””]Intelligence: About People[/li_item][li_item icon=””]Intelligence: Aviation Electronics News[/li_item][li_item icon=””]Setting the Standard[/li_item][li_item icon=””]Borescopes from Basic to Bodacious[/li_item][li_item icon=””]Parts, Parts, … Who has the Parts?[/li_item][li_item icon=””]Smart Assets[/li_item][/checklist][/one_third][one_third last=”yes” spacing=”yes” center_content=”no” hide_on_mobile=”no” background_color=”” background_image=”” background_repeat=”no-repeat” background_position=”left top” hover_type=”none” link=”” border_position=”all” border_size=”0px” border_color=”” border_style=”” padding=”” margin_top=”” margin_bottom=”” animation_type=”” animation_direction=”” animation_speed=”0.1″ animation_offset=”” class=”” id=””][imageframe lightbox=”no” gallery_id=”” lightbox_image=”” style_type=”bottomshadow” hover_type=”none” bordercolor=”” bordersize=”0px” borderradius=”0″ stylecolor=”” align=”center” link=”http://www.avm-mag.com/wp-content/uploads/2016/01/AVM_Calendar_2016_FINAL_v10_LORES.pdf” linktarget=”_blank” animation_type=”0″ animation_direction=”down” animation_speed=”0.1″ animation_offset=”” hide_on_mobile=”no” class=”” id=””] 
[/imageframe][separator style_type=”none” top_margin=”” bottom_margin=”20″ sep_color=”” border_size=”” icon=”” icon_circle=”” icon_circle_color=”” width=”” alignment=”” class=”” id=””][fusion_text]NEW – the large fold out 2016 Wall planner was inserted into the Dec/Jan issue but you can also click/view above.[/fusion_text][/one_third][/fullwidth]