While new aircraft deliveries and used aircraft sales are seeing unusually high demand and price increases lately, we feel the delivery market will stabilize on the high side of recent “normal” activity seen over the previous decade. The new and used price pressures and demand has experienced tremendous growth as the use of business aircraft was the relief valve for underserving commercial operations and a “safe” venue to meet travel needs. However, new headwinds are on the horizon.
Business jets will see the biggest gains, while business turboprops will see more of the same numbers, but with single-engine turbos replacing multi-engines at a quicker pace.
On the MRO equation, growth sees more than a 3% compound annual growth rate (CAGR) overall with $125 billion in demand, 30% of which is engine requirements, growing at 4.5% CAGR. Engine maintenance is becoming an ever-increasing share of MRO spend despite huge improvements in overhaul intervals.
Concerning factors increase this year. Low interest rates seem to be a thing of the past and fuel prices have been vulnerable to shocks as the world’s supply chain sorts itself out.
Labor pressures are manifesting at OEMs, suppliers, and with MROs making servicing of aircraft an issue. Recent aggressive GDP recovery predictions around the world seem unachievable at the time of this report.
However, the needs and wants of business owners and operators cannot be mistaken, especially given the most recent rise of business aviation activities; therefore, our predictions are favorable for continued fleet and MRO growth.
