Page 26 - AAA APRIL - MAY 2017 Online Magazine

MRO FEATURE OVERVIEW
BeLoW: MRO operators in Mexico
will benefit from availability of
trained technicians and personnel
and also low cost of labour is
another advantage
BottoM: As the aviation industry
is transitions from mature aircraft
families to new generation
aircraft platforms, MRO operators
must invest in developing their
operations and focus on innovation
to respond to emerging changes
26 MAINTENANCE REPAIR OVERHAUL APRIL / MAY 2017
global commercial air transport fleet of 2017, up from 0.7 percent in 2012.
27,957 aircraft.
Struggling Africa, Plateauing Latin
Carriers in the Asia Pacific region have
been in recovery mode since 2008, when the America
EBIT margin was - 4.7 percent, but the growth There is plenty to worry for carriers in Africa,
has not been as pronounced as in North with Berger expecting them to record an EBIT
America. Airlines in the region is expected to margin of -3.6 percent in 2017, down from
register a profit of 5.2 percent, an increase the - 0.4 percent it recorded in 2012. With
of just 0.5 percent from 2012. There is reason carriers in the Middle East showing signs of
for cheer in Europe, with carriers expected stress, Berger expects the EBIT margin to
to record an EBIT margin of 4.5 percent in go down from three percent in 2012 to just
0.7 percent in 2017. Latin American carriers,
which boasted the highest profit margin
among all regions in 2008 - 2.3 percent - saw
the number decline to 1.5 percent in 2012. The
profit margin is expected to increase in 2017,
but only by a modest 2.9 percent.
Investing in Capital, Employees
The good news is that much of the profits is
being funneled back into the industry. Eager
to gain an edge over their competitors,
airlines have been investing significantly
in two key areas - capital improvement and
keeping their employees happy. At least
three North American airlines - Delta Airlines,
Southwest Airlines and United Airlines - have
given their pilots significant increases. Forty
percent of the profit went to investors, with
16 percent used for debt repayments and 26
percent for stock buyback and dividends.
Airlines have also been on the lookout
for partnerships that make sense, and have
not been shy when it comes to grabbing
investment opportunities. “Etihad Airways
has been investing around the globe,” said
Berger. “Delta Airlines is investing more in
Aero Mexico.”
Expect Modest Fleet Growth, Faster
MRO Growth
Berger expects global fleet growth to grow
at an annual rate of 3.2 percent over the next
ten years, with the driving factors being
the phasing out of ageing aircraft and the
increased demand for air travel. The total
number of aircraft, which is almost 28,000
now, is expected to touch 38,100 by 2026.
According to ICF, the air transport MRO
market will hit the $100 billion mark in 2026,
growing at a compound annual growth rate
(CAGR) of 4.1% in the period from the current
$67.6 billion. The Asian market is now the
largest at 30 percent, with North America
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