Justina Chinita de Paz – Sales Director Services
December 7th, 2022
Aernnova has participated in the MRO Europe 2022 exhibition held in London from October 18th to 20th, where we have attended conferences and maintained contacts with exhibitors, customers and suppliers.
MRO Europe is an international fair of reference in the field of Maintenance, Repair and Overhaul (MRO) in the aerospace industry.
It is the main annual meeting in Europe related to aircraft and helicopter maintenance. It is attended by airlines, MRO service providers, OEMs, government agencies, leasing companies and industry experts from all over the world. MRO Europe is a point of reference and support for business growth, knowledge transfer and technological progress in the MRO world.
For Aernnova it is an opportunity to have face-to-face contacts and meetings with customers, competitors and suppliers, as well as to obtain first-hand information of the present situation and future expectations in the maintenance (in its broadest sense of MRO) of airplanes and helicopters.
It is important to stress that in order for an aircraft to continue to operate, its owner or operator must guarantee that the aircraft is airworthy. And this guarantee is achieved, among other activities, through proper maintenance of the aircraft. On the other hand, such maintenance – in addition to being a regular and constant activity over time – is (i) mandatory as long as the aircraft continues to operate and is (ii) independent of whether the aircraft continues to be manufactured or not. The above means that for Aernnova Group there is a work and business opportunity not only during the development and serial production phases of an aircraft, but also throughout the life of our products as long as they are usable in aircraft that are in operation. As a reference of the existing potential:
*Commercial aircraft: over the next 10 years, more than 21,700 new aircraft are estimated to be delivered, with an annual value of more than 2,000 from 2025.
*Single-aisle narrowbody aircraft – A320 and B737 – are estimated to account for 78% of the total number, 13% for widebody – B777, B787, A330, A350 -, 5% for regional jets – Embraer EJets, Superjet -, and 4% for turboprops – ATR, new Embraer turboprop -.
*The freighter market is also expected to grow. Over the next decade, it is estimated that more than 1,900 aircraft dedicated exclusively to cargo transport will be delivered.
Of that number, 74% of the aircraft will be obtained through passenger-to-freighter conversions (P2F conversion).
*There is a steady increase in the return to commercial aircraft service.
For reference: the total number of parked aircraft, but in airworthy condition, was 4,600 in September 2022 (down from a peak of 12,000 in May 2020) and the trend is still downward: it is expected to approach the typical value of 2,500 parked aircraft soon.
*In 2023, the total in-service aircraft fleet is estimated to exceed the 2019 value.
*Over the next 10 years, a compound annual growth rate (CAGR) of 2.8% is estimated in the MRO field when all categories are considered.
Within this growth, a 3.9% CAGR is estimated for component-related MRO activities and a 3.1% CAGR for engine-related MRO activities.
*It is estimated that globally and over the next decade there will be a total MRO expenditure of $1027B. Of that value, $224B is estimated in MRO activities linked to components.
Aernnova must continue to be, invest and bet in the Services and MRO area to take advantage of these future opportunities. I sincerely believe that there is growth potential for the Group if we know how to take advantage of (i) the experience in Services activities developed since ERJ145, (ii) the approvals and certificates we already hold, (iii) as well as the experience of all the people, companies, areas and cores of the group.
It is important to be aware of new opportunities (e.g. the development of the freighter aircraft market), trends with reasonable or almost confirmed reliability of implementation (sustainability and digitalization), new players in the near future (e.g. UAMs), the areas of the world with the highest growth potential and the proposals of the different companies offering and covering MRO services. With the latter we must keep in mind that they can be partners or potential customers and not just competitors.
We must continue with clear actions aimed at obtaining that Aernnova has a visibility and brand, in Services associated to the MRO market, similar to those it has earned and already has as Tier#1 in the industry. It is clearly a challenge, but I believe the rewards for the Group are worth it. The all-important wickets are available. What we have to do is to see how to weave them together in another way to adapt them to offer added value in MRO Services.
From a practical point of view, the fair has been successful for Aernnova in terms of the contacts made, the meetings held and the data on the sector presented at the conferences. It is now time to analyze the opportunities detected and the shared interests with the aim of translating them into reality.
We look forward to participating again next October at MRO Europe 2023 to support the objective of increasing the visibility and business volume of the Aernnova Group in Services.
