Market Trends of Latin America Aircraft MRO Industry
This section covers the major market trends shaping the Latin America Aircraft MRO Market according to our research experts:
Commercial Aircraft Segment Held the Largest Market Share in 2021
The Commercial Aircraft segment held the largest market share in 2021. Although several airlines declared bankruptcy during the pandemic, the fleet has bounced back and stood at 90% of its pre-pandemic size by the end of 2021. Furthermore, during the forecast period, the recovery and the expansion of low-cost carriers in Latin America, such as FlyBondi, JetSMART, Viva Air, etc. might help the recovery of the market in the region. Latin America's airline fleet has an average age of over 12 years. Though several airlines in the region are in financial crisis, some major airlines have resumed plans to increase their fleet size by procuring new aircraft. For instance, in October 2021, LATAM Airlines Group announced that it has placed an order for 70 new Airbus A320 aircraft. The purchase order is in addition to the 42 aircraft that were previously ordered. The aircraft will be received between 2022 and 2028. On the other hand, the emphasis of the airlines of the region to keep their fleet airworthy is expected to help the growth of the segment. In June 2021, the Mexican carrier Transportes Aeromar has awarded a contract to Piedmont Propulsion Systems to support its next-generation ATR 42 and 72 aircraft fleet. As part of the multi-year contract, Piedmont Propulsion Systems will provide complete propeller maintenance for the aircraft. Such contracts are expected to drive the demand for commercial aircraft MRO in the region. Nevertheless, with about 30% of the region's fleet expected to retire during the forecast period, the demand for MRO services might witness a decline in the coming years, thereby hampering the growth of the segment in the years to come.
Brazil Held the Largest Market Share in 2021
As of 2021, Brazil had the highest market share in the Latin America MRO market. Brazil is one of the booming markets in the commercial aviation industry globally. Brazil's domestic flights, which fell to less than one-tenth of pre-COVID levels in May 2020, had risen to about 90% of the pre-pandemic levels by the beginning of 2022. On the other hand, international flights rose to 55% of normal schedules during the same period. With the shrinking revenue streams, airlines in the country are employing new methods to increase the efficiency of MRO operations while reducing costs. LATAM Airlines Group is employing drones to inspect aircraft fuselages at its Maintenance, Repair, and Overhaul (MRO) facilities in São Carlos, Brazil. By using this new technology, the airline is making the maintenance process faster and better. On the other hand, Brazil is also one of the top 15 military spenders in the world. In the past few years, the Army and the Navy of Brazil have started to emphasize fleet modernization by replacing their aging aircraft fleet. Brazil procured 36 Gripen NG fighter aircraft from Sweden, and in February 2022, the country upgraded its order and placed an order for 30 additional Gripen NG fighter aircraft for the Brazilian Air Force. In addition to fleet expansion, the focus on keeping the fleet combat-ready will drive the market growth. In 2021, Russian Helicopters announced it has signed maintenance deals to repair Mi-35M helicopters belonging to the Brazilian Air Force. In accordance with contracts, Russian Helicopters will supply repair and maintenance complexes for parts that will be repaired in Brazil, and a range of new parts. Such contracts are expected to drive the growth of the market in the country during the forecast period.
