Of the many aviation sectors poleaxed by the COVID-19 pandemic in 2020, perhaps none has been struck harder than the engine market.
Like aircraft, engine deliveries have slumped as airlines have deferred or cancelled orders – or simply gone out of business.
However, engines have been uniquely and severely affected in the aftermarket, with operators cancelling overhauls, running down their spares inventories and cannibalizing their parked fleets.
By summer 2020 – well into the pandemic but prior to the reimposition of lockdowns in many countries – a rough consensus was forming that engine aftermarket revenues would fall by about half for the year from 2019.
Furthermore, most in the industry do not expect engine MRO sales to recover to pre-pandemic levels for several years. First, because passenger traffic is not predicted to recover until 2024; second, because green-time engines sourced from retired aircraft give airlines an alternative to costly overhauls.
According to the Aviation Week Fleet & Data Services 2021 Forecast, total engine MRO demand in 2021 is likely to be around $30 billion, rising to about $40 billion by 2025 and $47 billion by 2030.
Of course, such projections are now beholden to numerous uncertainties, chief among which is the length of the pandemic, but they are a good indication of the direction of travel.
Also worth noting is that although the depth of the downturn is up for debate, it is unlikely to alter the fundamentals of the engine market. Some engine types may be retired quicker and some may be introduced later, but the most popular current- and new-generation equipment before the crisis will remain so afterwards.
That said, there may be some shift at the margins, with the narrowbody market assuming even more importance if, as expected, it recovers quicker than long-haul travel.
To find out more about where the engine market is headed over the next 10 years, see the forthcoming Engine Yearbook 2021.
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