MRO Survey Findings 2011

A touch of optimism sprinkled with a dash of caution

As economies continue to recover from the worldwide recession that struck in 2008, the maintenance, repair, and overhaul (MRO) industry is stabilizing - though still facing challenges. MROs are operating today against a backdrop of uncertainty in jet fuel prices and the effect fuel price fluctuations could have on aircraft utilization and the active fleet. But against this backdrop, signs of renewed health have appeared on the horizon. Examples include rising capacity utilization and an easing up of headcount reductions in MRO workforces.

In addition, MRO executives' focus has shifted. Instead of concentrating on merely surviving an economic tailspin, executives are seeking to fuel fresh growth through organic strategies (including performance improvement, capability expansion, and deeper repair development). Interestingly, M&A is also back on the executive radar screen as a growth strategy, after a three-year hiatus.

Additionally, many MROs - recognizing the growing competitive strength of commercial aviation original equipment manufacturers (OEMs) - are aligning themselves with OEMs to grow revenues as well as secure their place in the aftermarket.

It's a complex picture, to be sure. But tempering optimism with caution seems wise, given the crosswinds in store for MROs this year and for the foreseeable future.

About the survey

To further explore the aviation MRO market, Oliver Wyman conducts an annual MRO Survey. This year, over 120 airline, airline MRO, independent MRO, and OEM executives responded. Seventy-four percent of the respondents held director or higher titles in their organizations and represented a global mix of companies from less than $50 million to over $5 billion in revenues.

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