PUBLISHER: Mordor Intelligence | PRODUCT CODE: 946210
PUBLISHER: Mordor Intelligence | PRODUCT CODE: 946210
The Asia-Pacific aircraft engine MRO market is anticipated to witness a CAGR of over 5% during the forecast period.
The emissions produced by aircraft engines have an impact on the environment and affect the local air quality and finally cause several problems like the greenhouse effect. Over the past few years, an increasing number of aircraft in the sky led to increasing emissions caused by them. In 2018 alone, aircraft produced 747 million metric tons of carbon dioxide (CO2), which is approximately 11% of the total CO2 emissions from all transport sources. About 80% of the aviation CO2 emissions are from flights traveling over 1,500 km. To tackle the increasing emissions, regulatory bodies, like ICAO and IATA, have adopted a set of targets to address the global challenge of climate change. IATA has targeted to improve the fuel efficiency of aircraft by 1.5% per year, between 2009-2020, and to cap the net aviation CO2 emissions from 2020. It aims to reduce the emissions by 50% by 2050, relative to the 2005 levels. The growth of emission regulations for the airspace by various regulatory bodies, like FAA, EASA, IATA, and ICAO, among others, is generating the demand for better engine maintenance for older aircraft, as their emissions are higher compared to the new-generation aircraft engine. The COVID-19 pandemic has enhanced the demand for engine MRO in Asia-Pacific, as the airlines need to maintain the airworthiness of their aircraft and engine assets.
The favorable government policies and the availability of cheap manual resources have made Singapore a global hub for MRO activities. Singapore hosts a large and diverse ecosystem that caters to engines, components, and avionics for comprehensive nose-to-tail services. Major aerospace leaders such as Rolls Royce plc and Airbus SE have a long-term and significant footprint in Singapore. The high concentration of aerospace industry players means that the domestic market is extensively layered with key support sectors to absorb subcontracting works. Local heavyweights such as SIA Engineering Company and Singapore Technologies Engineering Limited (ST Engineering) continue to expand their operations in the country. ST Engineering has a longstanding relationship with CFM International (CFM) as a licensed service center for its CFM56-5B and -7B engines. On this note, in February 2020, ST Engineering agreed with CFM to provide MRO support for its LEAP-1B engine. Such developments are envisioned to foster the growth prospects of the market in focus in Singapore during the upcoming period.
The Asia-Pacific aircraft engine MRO market is characterized by the presence of many global players such as Asia Pacific Aerospace, Singapore Aero Engine Services Private Limited, Singapore Technologies Engineering Limited, SIA Engineering Company, and Hong Kong Aircraft Engineering Company Limited (HAECO). The major engine MRO providers are entering into long-term partnerships or forming joint ventures (JVs) to grow their engine MRO customers. For instance, Singapore Aero Engine Services Private Limited (SAESL) was established in 2001 as a JV between Rolls-Royce plc and Singapore Airlines Engineering Company. Its engine MRO business services the Trent 500, Trent 700, Trent 800, Trent 900, Trent 1000, and Trent XWB engines. Also, the use of advanced technology for providing maintenance services is expected to help these companies attract new customers by reducing their maintenance costs. However, the long-term contracts of the established players with armed forces and airlines are expected to act as a barrier for the new players to enter the market.