North American Military Aircraft and Engine MRO Market
Frost & Sullivan, June 2012, Pages: 73
U.S. and Canadian military services are experiencing a significant shift in MRO spending. The return of aircraft from combat areas will reduce general demand and may change the levels of organic support services. The replacement of legacy aircraft with smaller fleets of new aircraft will result in reduced need for contracted services. Frost & Sullivan's aerospace and defense group found that spending for North American military MRO exceeded $35.1 billion in 2011, and is expected to decline after 2013. Spending will become more selective and specialized at that point.
Key Questions Answered in this Study
This research service will address several key questions about the market, including the following:
Is the market growing or shrinking, and at what rate?
Are the existing competing contractors correctly structured to meet customer needs?
Is this a market that will change as the United States faces new budget constraints and potential job losses?
How will the structure of the market change over time? Is it ready for acquisitions?
Are the products/services offered today meeting customer needs, or is additional development needed?
Are the contractors ready to compete alone, or do they need partnerships to take their business to the next level?
Market Overview—Segmentation
The military looks at spending through five prime areas, namely, unit-level spending, depot-level airframe spending, depot-level engine spending, component repair spending, and procurement-based spending.
Unit-level spending mainly concerns manpower and consumable materials, which will not be addressed in this study. Depot-level spending on both airframes and engines will be addressed in this research service, and will be identified by organic versus contractor spending. Component repair for depot-level activities will be identified in this study, but the unit-level repair of components will not be detailed, as it mainly concerns manpower and consumables. Depot-level component repair will also be divided between organic and contractor repair spending. Procurement spending includes interim contractor support, modifications, and upgrades.
To differentiate among the aforementioned items for the different levels of maintenance and the potential spending and revenue streams, this study uses the following categories of spending: airframe depots, engine depots, component repair (depots only), and contractor support (including modifications).
Definition of Spending/Revenue
This study uses calendar year 2011 as the basis of the research. The choice was a compromise between the U. S. fiscal year, which starts in October, and the Canadian fiscal year, which starts in April. As a result, neither set of numbers will exactly match fiscal year-based budgets or spending data for either country. The U. S. Dollar was used as the reference monetary value. At the time of this writing, the two currencies were at a near parity.
C h a p t e r 1
Market Overview
Research Concept Information 1-1
Key Questions Answered in this Study 1-1
Market Overview—Segmentation 1-1
Definition of Spending/Revenue 1-2
Terms and Acronyms 1-2
Definition of Terms 1-2
Acronyms Used 1-3
North American Military Aircraft and Engine MRO Market 1-4
General Military and Engine MRO Market 1-4
Market Engineering Measurements 1-5
Overview of the U.S. MRO Market 1-6
Overview of the Canadian MRO Market 1-8
C h a p t e r 2
External Challenges: Drivers and Restraints–Total Market
Market Drivers 2-1
List of Market Drivers 2-1
Current Operations Sustain High MRO Opportunities 2-2
Aging Aircraft Increases Potential for MRO Revenue 2-2
Alliances Supporting Whole-life and Integrated Contracts
Market Restraints 2-3
List of Market Restraints 2-3
Shortage of Skilled Aircraft Maintenance Personnel 2-4
Demand Reduction Due to Reduced Operations 2-4
Federal Regulations Limit U.S. Military MRO Opportunities 2-4
Increased Privatization Affects Competition and Price 2-5
Funding Issues with the Current Budget 2-5
C h a p t e r 3
Forecasts and Trends–Total Market
Forecast Background 3-1
Forecasts and Trends—Forecast Assumptions 3-1
Forecast Specifics 3-2
Spending Forecast Discussion 3-2
Spending Forecast Discussion for Market Segments 3-5
C h a p t e r 4
Market Segment Analysis
Segmentation Background 4-1
Market Segment Analysis—General Discussion of Maintenance Segments 4-1
Field Maintenance 4-2
Segment Estimates
Primary Addressable Segments 4-4
Airframe MRO Segment 4-4
Engine MRO Segment 4-7
Component MRO Segment 4-10
Contracted Services' Segmentation 4-14
Overall Contractor Services 4-14
Contractor Services' Segmentation 4-16
Contractor Forecasts 4-17
C h a p t e r 5
Market Share and Competitive Analysis—Total Market
Competitive Details 5-1
Market Share and Competitive Analysis—Market Share Analysis 5-1
Competitive Environment 5-4
Competitive Factors and Assessment 5-5
Competitive Awards 5-6
Customer Value Enhancement Award: Military Aircraft MRO—L-3 Communications 5-6
Customer Value Enhancement Award: Military Engine MRO—Standard Aero 5-7
C h a p t e r 6
Country Analysis
General Discussion of Differences between the United States and Canada 6-1
Country Analysis—North American Differences
U.S. Market Discussion 6-1
U.S. Market 6-1
Canadian Market Discussion 6-9
Canadian Market 6-9
C h a p t e r 7
Conclusion and Recommendation
Concluding Material 7-1
Conclusions 7-1
List of Figures
C h a p t e r 2
External Challenges: Drivers and Restraints–Total Market
2-1 Military Aircraft and Engine MRO Market:
Market Drivers Ranked in Order of Impact (North America), 2012-2016 2-1
2-2 Military Aircraft and Engine MRO Market:
Market Restraints Ranked in Order of Impact (North America), 2012-2016 2-3
C h a p t e r 3
Forecasts and Trends–Total Market
3-1 Military Aircraft and Engine MRO Market:
Spending Forecast (North America), 2009-2016 3-1
3-2 Military Aircraft and Engine MRO Market:
Spending Forecast by Country (North America), 2009-2016 3-4
3-3 Military Aircraft and Engine MRO Market:
Spending Forecast by Segment (North America), 2009-2016 3-5
C h a p t e r 4
Market Segment Analysis
4-1 Military Aircraft and Engine MRO Market:
Percent of Spending by Segment (North America), 2011 4-1
4-2 Military Aircraft and Engine MRO Market:
Percent of Spending by Military Service (North America), 2011 4-3
4-3 Military Aircraft and Engine MRO Market:
Airframe MRO Spending Forecast (North America), 2009-2016 4-6
4-4 Military Aircraft and Engine MRO Market:
Engine MRO Spending Forecast (North America), 2009-2016 4-9
4-5 Military Aircraft and Engine MRO Market:
Percent of Spending by Component MRO Subsegment (North America), 2011 4-12
4-6 Military Aircraft and Engine MRO Market:
Component MRO Spending Forecast (North America), 2009-2016 4-13
4-7 Military Aircraft and Engine MRO Market:
Contractor Revenue Forecast by Segment (North America), 2009-2016 4-18
4-8 Military Aircraft and Engine MRO Market:
Contractor Revenue Forecast by Military Service (North America), 2009-2016 4-20
C h a p t e r 5
Market Share and Competitive Analysis—Total Market
5-1 Military Aircraft and Engine MRO Market:
Depot Market Share (North America), 2011 5-1
5-2 Military Aircraft and Engine MRO Market:
Contractor Market Share (North America), 2011 5-2
5-3 Military Aircraft and Engine MRO Market:
Engine and Airframe Competitive Environment (North America), 2011 5-4
C h a p t e r 6
Country Analysis
6-1 Military Aircraft and Engine MRO Market:
Percent of Spending by Military Service (United States), 2011 6-2
6-2 Military Aircraft and Engine MRO Market:
Spending Forecast (United States), 2009-2016
6-3 Military Aircraft and Engine MRO Market:
Spending Forecast by Military Service (United States), 2009-2016 6-4
6-4 Military Aircraft and Engine MRO Market:
Spending Forecast by Segment (United States), 2009-2016 6-5
6-5 Military Aircraft and Engine MRO Market:
Percent of Revenues (United States), 2011 6-6
6-6 Military Aircraft and Engine MRO Market:
Engine and Airframe Competitive Environment (United States), 2011 6-8
6-7 Military Aircraft and Engine MRO Market:
Spending Forecast (Canada), 2009-2016 6-10
6-8 Military Aircraft and Engine MRO Market:
Spending Forecast by Segment (Canada), 2009-2016 6-11
6-9 Military Aircraft and Engine MRO Market:
Engine and Airframe Competitive Environment (Canada), 2011 6-12
List of Charts
C h a p t e r 1
Market Overview
1.1 Military Aircraft and Engine MRO Market:
Market Engineering Measurements (North America), 2011 1-6
C h a p t e r 3
Forecasts and Trends–Total Market
3.1 Military Aircraft and Engine MRO Market:
Spending Forecast (North America), 2009-2016 3-2
3.2 Military Aircraft and Engine MRO Market:
Spending Forecast by Country (North America), 2009-2016 3-4
3.3 Military Aircraft and Engine MRO Market:
Spending Forecast by Segment (North America), 2009-2016 3-5
C h a p t e r 4
Market Segment Analysis
4.1 Military Aircraft and Engine MRO Market:
Percent of Spending by Segment (North America), 2011 4-2
4.2 Military Aircraft and Engine MRO Market:
Percent of Spending by Military Service (North America), 2011 4-3
4.3 Military Aircraft and Engine MRO Market:
Airframe MRO Market Engineering Measurements (North America), 2011
4.4 Military Aircraft and Engine MRO Market:
Airframe MRO Spending Forecast (North America), 2009-2016 4-6
4.5 Military Aircraft and Engine MRO Market:
Engine MRO Market Engineering Measurements (North America), 2011 4-8
4.6 Military Aircraft and Engine MRO Market:
Engine MRO Spending Forecast (North America), 2009-2016 4-9
4.7 Military Aircraft and Engine MRO Market:
Component MRO Market Engineering Measurements (North America), 2011 4-11
4.8 Military Aircraft and Engine MRO Market:
Percent of Spending by Component MRO Subsegment (North America), 2011 4-12
4.9 Military Aircraft and Engine MRO Market:
Component MRO Spending Forecast (North America), 2009-2016 4-14
4.10 Military Aircraft and Engine MRO Market:
Contractor Market Engineering Measurements (North America), 2011 4-16
4.11 Military Aircraft and Engine MRO Market:
Contractor Revenue Forecast by Segment (North America), 2009-2016 4-18
4.12 Military Aircraft and Engine MRO Market:
Contractor Revenue Forecast by Military Service (North America), 2009-2016 4-20
C h a p t e r 5
Market Share and Competitive Analysis—Total Market
5.1 Military Aircraft and Engine MRO Market:
Depot Market Share (North America), 2011 5-2
5.2 Military Aircraft and Engine MRO Market:
Contractor Market Share (North America), 2011 5-3
C h a p t e r 6
Country Analysis
6.1 Military Aircraft and Engine MRO Market:
Percent of Spending by Military Service (United States), 2011 6-2
6.2 Military Aircraft and Engine MRO Market:
Spending Forecast (United States), 2009-2016 6-3
6.3 Military Aircraft and Engine MRO Market:
Spending Forecast by Military Service (United States), 2009-2016 6-4
6.4 Military Aircraft and Engine MRO Market:
Spending Forecast by Segment (United States), 2009-2016 6-6
6.5 Military Aircraft and Engine MRO Market:
Percent of Revenues (United States), 2011 6-7
6.6 Military Aircraft and Engine MRO Market:
Spending Forecast (Canada), 2009-2016 6-10
6.7 Military Aircraft and Engine MRO Market:
Spending Forecast by Segment (Canada), 2009-2016 6-12
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