©TeamSAI
2014–2024 GLOBAL ENGINE MRO: ENGINE SESSION
MRO EUROPE CONFERENCE
APRIL 2014
10/08/2014
Tom Cooper Executive Vice President & Principal
TeamSAI Consulting
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ENGINE FLEET
FORECAST
2 10/08/2014
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CURRENT WORLD ENGINE FLEET BY REGION
10/08/2014
• In 2014 there were more than 48,000
engines powering the world’s
commercial fleet
• North America constitutes the largest
region (31%)
–WE and AP round out the top 3
–Top 3 combined represent 69%
• Bottom six regions make up a
growing share of the market
–Growing from 31% to 41% in 10 years
Source: Ascend Online, TeamSAI Consulting Services analysis
World Regions:
AF Africa
AP Asia Pacific
CH China
EE Eastern Europe
IN India
LA&C Latin America & Caribbean
ME Middle East
NA North America
WE Western Europe
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2014-2024 FLEET FORECAST
10/08/2014
• Engine fleet is expected to increase at 3.4% CAGR over the forecast period
–3.7% (2014-19) and 3.0% (2019-24)
–This is an increase of 19,085 engines in 10 years
• North America represents more than 30% of the fleet in 2014, but its share will
fall to less than a quarter by 2024
–Slower CAGR (0.7% 2014-24)
©TeamSAI 5
CURRENT AND FORECAST ENGINE FLEET BY ENGINE MANUFACTURER
10/08/2014
• By 2024, there will be nearly 68,000
engines powering the world’s
commercial fleet
• Today, the top 3 engine
manufacturers are CFMI, GE, and
Pratt & Whitney
• Rolls-Royce and IAE fleet of engines
fall in the 5000-10000 range
–Completing the list of top 5
manufacturers
• CFM International’s fleet had the
largest share (36%)
–16 points larger than the next largest
fleet
–CFMI’s installed base will widen the gap
by 2024, growing share to over 40%
Source: Ascend Online, TeamSAI Consulting Services analysis
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TOP 10 ENGINE TYPES BY 2024
10/08/2014
• New engine variants will be
introduced
–Leap X1A/B/C, Trent XWB, PW1000G
• In 2014, no single engine type has a
dominant share
–CFM56-7B has the largest share (18%),
but there is a long tail to this distribution
–By 2019 though, -7B will have greatly
increased fleet size by almost 3,500
–By 2024, -7B could begin to see a
decline in fleet size as the 737NG fleet
recedes and MAX takes hold
• Most of this growth is forecast for the
first 5 years of the 10-year forecast
–Though absolute growth is relatively
balanced
• Net growth of >9000 engines in each half of
the forecast
Source: Ascend Online, TeamSAI Consulting Services analysis
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ENGINE MRO OUTLOOK
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GLOBAL ENGINE MRO IS THE LARGEST MRO SEGMENT
10/08/2014
Source: TeamSAI
Consulting Services analysis
• Global growth is expected to maintain a 4.1%
CAGR through 2023
• Most of the growth is expected in first
half of the forecast
• Growth in second half of forecast is
much slower as new generation aircraft
enter the fleet and older aircraft retire
• $22.1B industry will grow to $33.2B over 10-
year forecast period
Source: TeamSAI Consulting Services analysis
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GLOBAL AND EUROPEAN ENGINE MRO GROWTH RATES
10/08/2014
Global
Europe
Source: TeamSAI Consulting Services analysis
Note: scales are different to highlight year-over-year variation
generally increasing
4.1% CAGR
generally increasing
3.1% CAGR
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WESTERN EUROPE AND EASTERN EUROPE ENGINE MRO GROWTH RATES
10/08/2014
Western Europe
Eastern Europe
Source: TeamSAI Consulting Services analysis
Note: scales are different to highlight year-over-year variation
generally increasing
2.1% CAGR
significantly increasing
8.7% CAGR
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GLOBAL AND EUROPEAN ENGINE MRO BY TECHNOLOGY LEVEL
10/08/2014
Source: TeamSAI Consulting Services analysis
Note: scales are different to highlight year-over-year variation
Global
Europe New technology engines are forecast to
make up an increasing but limited share of
the market over the period
©TeamSAI 12
GLOBAL AND EUROPEAN ENGINE MRO BY VINTAGE
10/08/2014
Source: TeamSAI Consulting Services analysis
Note: scales are different to highlight year-over-year variation
Global
Europe New technology engines are forecast to
make up an increasing but limited share of
the market over the period
But the newest types (Leaps and
PW1000G, which will power the MAX and
NEO, will have limited impact in this 10-yr
forecast period
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NAVIGATING THROUGH THE UNPREDICTABLE
ENGINE MRO
SOURCING
13
10/08/2014
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BALANCE OF TRADE IN THE ENGINE MRO MARKET
10/08/2014
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
NA LA&C WE EE AP CH IN ME AF
Engine Maintenance Supply & Demand ($USM)
Demand Supply
Region NA LA&C WE EE AP CH IN ME AF
NA $6,869 84% 0% 15% 0% 1% 0% 0% 0% 0%
LA&C $835 69% 2% 28% 0% 1% 0% 0% 0% 1%
WE $4,902 26% 0% 69% 0% 5% 0% 0% 0% 0%
EE $614 18% 0% 77% 1% 5% 0% 0% 0% 0%
AP $4,790 26% 0% 32% 0% 39% 2% 0% 0% 0%
CH $1,306 41% 0% 34% 0% 6% 19% 0% 0% 0%
IN $301 29% 0% 14% 0% 22% 0% 35% 0% 0%
ME $1,947 46% 0% 29% 0% 10% 0% 0% 15% 0%
AF $579 25% 0% 46% 0% 4% 0% 0% 10% 15%
Total $22,144
Demand by Operator
Region ($USM)
Supplier Region
Region Net Exporter/Importer
NA net exporter
LA&C net importer
WE net exporter
EE net importer
AP net importer
CH net importer
IN net importer
ME net importer
AF net importer
©TeamSAI 15
CONSOLIDATION LEADS TO CHALLENGES FOR INDEPENDENT MROS
10/08/2014
TURBOMECA
DYNNAMIC GUNVER
TECHNOLGOIES
GAS TURBINE EFFICIENCY
EUROPEA MICROFUSIONI
AEROSPAZIALI AERO ENGINE
CONTROLS
RETAN
AVEOS ENGINE SHOP
P&WC-BRISBANE
PB FASTENERS
UNISON ENGINE COMPONENTS
PRIMUS INTERNATIONAL CENTRA INDUSTRIES
AERICRAFT HEAT TREATING
KLUNE INDUSTRIES
AEROSTRUCTURETIMET
SYNCHRONOUS AEROSPACE GROUP
SUMMIT MACHINE
AEROSPACE DYNAMICS
INTERNATIONAL
GOODRICH PUMP & ENGINE
CONTROL SYSTEMS
FINNAIR ENGINE
SERVICES
©TeamSAI
THANK YOU
16 10/08/2014
Tom Cooper Executive Vice President & Principal
TeamSAI, Inc.
(404) 762-7257
WWW.TEAMSAI.COM