Southeast Asia Aircraft MRO Market - Growth, Trends, And Forecasts (2020 - 2025)

The Southeast Asia aircraft MRO market is expected to exhibit a growth rate of more than 4.5% during the forecast period.

- The rise in air passenger and subsequent growth in the passenger aircraft fleet is propelling the growth of aircraft MRO market in the South-East Asia region. The air travel in the region is witnessing a growth rate of nearly 9% with countries such as Philippines witnessing a growth rate of more than 10%. This is leading to procurement of more narrow body and wide body aircraft by regional airliners more investment in maintaining the airworthiness of existing fleet.
- The rising need to lower the aviation emission is significantly driving the growth of aircraft MRO market in the region. Countries such as Malaysia, Singapore, etc. are making significant investments in making their aviation industry cleaner and greener. Singapore airlines has collaborated with International Air Transport Association (IATA) to increase fuel efficiency of its existing fleet and achieving negative carbon growth from 2020.
- The use of advanced technologies in MRO operations is also fuelling the growth of market in the region. Technologies such as damage detection from drones, 3D Printing for parts and components production, etc. are expected to reduce the MRO lead time by huge margins for many regional airlines.

Key Market Trends

Commercial Aviation Segment to Exhibit the Highest Growth Rate

The growth in air traffic in the region is putting pressure on airline operators to maintain their fleet in operational condition. The market is witnessing an increased investment by existing players, joint ventures, and collaborations with major players of the global aviation industry and the entry of new players. Sapura Resource Berhad owned Sapura Technics announced its entry into the MRO market in April 2019. Sapura Technic will use two hangars of Senai International Airport to initiate its service with base and line maintenance of aircraft such as Airbus A320 and Boeing 737 aircraft. It is also planning to include facilities for hydraulics, wheels, and brakes, interiors, etc. in the future. In April 2020, Airbus pulled itself out from an MRO Joint Venture with Thai Airways that includes a USD 339 million facilities. However, Thai Airways is moving ahead with its initial objectives and is planning to search for new partners for the program. In November 2019, MTU Maintenance signed a contract with Malaysia Airlines Berhad for MRO service of more than 100 CFM56-7B aircraft engines. MTU will provide solutions such as PERFORMPlus and SAVEPlus for optimizing the performance and efficiency of newer and older engines.

Singapore Accounted for a Major Market Share in 2019

Singapore is leading the aircraft MRO market in Southeast Asia with huge investments in fleet expansion, joint ventures, facility development, and technological advancements. In April 2019, SIA Engineering Company (SIAEC) signed a USD 1 billion contract with its parent company Singapore Airlines (SIA) to provide MRO and fleet management services for up to two years with an option to extend the agreement by 2 more years. Under another agreement worth USD 2 million, SIAEC and low-cost carrier NokScoot formed a joint venture in March 2019 to support fleet expansion and line maintenance of Boeing 777-200 aircraft. The new joint venture will initially provide line maintenance at Mueang International Airport and will subsequently expand SAIECÕs maintenance network to 34 stations. Singapore is also investing significantly in technological advancements for its aircraft MRO market. Singapore Technologies Engineering is the largest airframe maintenance service provider in the world and it is currently investing in unmanned air vehicles for detecting scratches, cracks, dents and other damages in airframe. ST Engineering also collaborated with Air New Zealand to produce cup holders, seat tables, etc. using 3D printing technology. The aforementioned factors are significantly driving the market growth for aircraft MRO in the country.

Competitive Landscape

The market for aircraft MRO services in the Southeast Asia region is moderately consolidated. Some of the prominent players in the market are ST Engineering, GMF AeroAsia, GAMECO, and AAR Corp. among others. The market is witnessing a huge investment from key players in facility development, technological innovations and advancements, joint ventures and partnerships, etc. For a very long time the market was dominated by Singapore but now the dynamics are changing and investments are being made in MRO markets by countries such as Thailand, Indonesia, etc. owing to the fleet expansion and availability of cheap labour.

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