AeroStrategy Assesses The Impact Of Troubled Airline Environment on MRO

July 15, 2008 --[ASDWire]-- Aerospace consultancy and MRO market experts AeroStrategy recently assessed the impact of high fuel prices, recessionary pressures and the resulting airline fleet restructuring on the $45B air transport MRO market. "With so much uncertainty in the airline sector, the phones are ringing off the hook as market analysts and business planners are quizzed by corporate management" states David Stewart, co-founder of AeroStrategy. In summary, AeroStrategy's analysis shows today's situation results in the following conclusions:

- In recent months, more than 25 different airlines have announced the grounding of just over 610 aircraft - about 3.2% of the active global fleet

- Not surprisingly, it's the older aircraft being grounded because of their fuel burn characteristics - 67% are old version 737s (not NGs) and DC9/MD-80s
- 80% of aircraft being taken out of service are in North America (accounting for almost 7% of the fleet there)
- Removal of these aircraft from the active fleet will reduce annual MRO spend by $1.35B - around 3% of the total market
- If fuel prices continue to remain high, AeroStrategy estimates about 1,200 aircraft will ultimately be removed from service, reducing MRO spend by about $2.8B (6%)
- In addition, recessionary pressure will reduce growth, although the impact will be offset by the continuing strength in developing regions
- MRO market growth will reduce from AeroStrategy's baseline 3.1% CAGR by 0.9% (to 2.2% CAGR) for the next two years - equivalent to a total reduced MRO spend of $1.3B

AeroStrategy is a premier management consulting firm specializing in strategy and market analysis for the aviation and aerospace industries. The firm has offices in Europe and North America.

For further information, see www.aerostrategy.com
Jennife Zapp
Research Associate
AeroStrategy
101 N. Main, Suite 400
Ann Arbor, MI 48104
(734) 213-1579 direct
jzapp@aerostrategy.com
www.aerostrategy.com

Source : Aerostrategy