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Aftermarket Growth May Slow, But Demand Endures

Southwest Airlines aircraft taking off

Airlines are keeping more older aircraft in service longer to fill gaps created by delivery shortfalls from Airbus and Boeing.

Credit: Joepriesaviation.net

New aircraft production and delivery rates are ramping up steadily to the figures that manufacturers promised and on which airlines and lessors are counting. Supply chain logjams are easing, helping needed material flow more predictably to both production lines and repair stations.

These and similar encouraging trends mean pressure on aftermarket providers should begin to ease in 2025. But the return to normalization of annual growth rates—think mid-to-high single digits—will not happen overnight. Many shops will still be full, turnaround times will remain stubbornly elevated and barring a major change in the pace of aircraft retirements, the surplus parts market will continue to long for material for the most sought-after aircraft and engine platforms.

Taken together, it adds up to another strong year of growth for most commercial aftermarket players.

  • Commercial aftermarket strength will continue
  • Engine MRO eyes efficiency, alternatives to handle demand

The consensus is that maintenance, repair and overhaul (MRO) market growth will be in the mid-teens in 2025. Engine MRO providers, responsible for about half the global commercial MRO business, will continue to be growth drivers, servicing both current-generation and legacy engines.

Safran in early December reaffirmed CFM International CFM56 shop visit projections for the near future, pegging 2025 as the likely peak year for volume, with around 2,300 engine inductions. The French company, a 50/50 partner in CFM with GE Aerospace, expects slight declines in 2026-27, with the total dropping below 2,000 in 2028.

“Although [shop visit] expectations appear to be normalizing, we continue to view the engine MRO market as having fundamental tailwinds,” RBC Capital Markets wrote in an investor note. “With delayed OEM deliveries and continued use of the existing fleet, we continue to expect growth into 2025.”

 

Safran’s full-year 2025 projections include mid-single-digit growth for its services business and high single digits for spares sales, with CFM56 work to remain the main driver. This is down from recent years, a reflection of normalization following a rapid post-downturn ramp-up.

GE Aerospace is projecting its commercial services will grow in the low double digits in 2025, the company said in a December investor letter.

The two CFM partners’ bullish outlooks come as no surprise. The venerable CFM56-5Bs and -7Bs that power a share of the Airbus A320ceo family and the entire Boeing 737 Next Generation fleet have years of profitable aftermarket revenue generation ahead. About 40% of the 23,000 -5Bs and -7Bs in service have yet to undergo a heavy shop visit; in 2028, the figure will still be at least 25%, Safran projects.

Aircraft engine close-up
Widebody program delivery delays have forced operators to change long-haul fleet plans. Credit: Sean Broderick/AW&ST

Meanwhile, CFM’s Leap fleet is quickly growing and steadily maturing. Shop visits will approach 2,000 in 2025, including both heavy-work-scope overhauls and hospital visits. Safran sees the figure peaking at more than 5,000 in 2040.

Part of the Leap’s rapid growth and higher peak compared to the CFM56 is in simple numbers. The Leap installed base has expanded nearly twice as quickly as that of the CFM56. CFM will have eclipsed 9,000 total Leap deliveries by August 2025, nine years after the first engines—Leap 1As on a Pegasus Airlines A320neo—entered service. The CFM56 program needed nearly 20 years to reach the same delivery total.

Another major factor driving aftermarket business on current-generation engines is teething. While common on new-technology engine programs, the rapid growth of the new narrowbody engine fleets means early issues affect more operators than in the past.

Pratt & Whitney will hand over its 5,000th PW1000G geared turbofan (GTF) in 2025, about eight years after the first variant entered service. Its predecessor, the IAE V2500 built by a five-company joint venture that included Pratt, surpassed 5,000 deliveries in its 14th year.

Both Pratt and CFM have battled problems that affected durability and time on wing—work that will continue in 2025.

Pratt’s well-documented issue with contaminated powder metal (PM) means about 350 aircraft will be idled at any time while GTFs undergo painstakingly long wing-to-wing inspections and overhauls (AW&ST March 11-24). Turnaround times of around 300 days are problematic enough; as of late 2024, Pratt was not producing enough full-life parts to replace all suspect PM parts in the in-service fleet.

New-build engines have been getting full-life parts since late 2023. Pratt parent RTX has been vague about when it can satisfy the in-service fleet’s needs and eliminate unscheduled off-wing inspections to ensure the problematic parts are not failing.

CFM’s Leap issues have not created as much operational disruption, but they hardly are insignificant. Installations of reverse bleed systems (RBS) designed to prevent fuel nozzle coking on CFM Leap 1A engines and prevent unscheduled nozzle swaps are ramping up steadily. The RBS is a complex kit that requires dedicated training and at least 10 hr. to install. GE has developed several training aids, including a virtual tablet-based assembly diagram, to aid technicians. A Leap 1B-spec RBS is under development and is expected to be ready in 2025.

Installations of new Leap 1A high-pressure turbine (HPT) upgrade kits also will be folded into retrofit schedules. The kit, which includes new HPT Stage 1 blades, nozzles and forward inner nozzle supports, received FAA and European Union Aviation Safety Agency certification in early December. MRO shops will be the first to receive kits, followed by new-production engines in early 2025.

In the widebody arena, the outlook is simpler. Utilization is climbing thanks to strengthening long-haul demand, which in turn is driving maintenance spending. At Rolls-Royce, large engine flying hours for the first 10 months of 2024 were 102% of comparable 2019 levels, the company said in a late November trading update.

The trend offers a sample of a strong macro environment. Total revenue passenger kilometers were up nearly 11% for the first 10 months of 2024 year over year, show International Air Transport Association figures released in early December. Available seat kilometers, which drive MRO spending, were up 9.3%.

“The overall robust travel growth should be a stabilizing factor for continued aftermarket growth in our view,” RBC Capital Markets wrote in an investor note. “We continue to expect sustained levels of aftermarket maintenance spending into 2025 with persisting aircraft fleet dynamics.

Aftermarket providers welcome the consistently strong demand environment, but it comes with challenges. As demand rises, so does pressure to get work done more efficiently.

GE Aerospace is among the major MRO providers deploying new technology for improving shop-floor performance. Examples include turbine blade inspection tools (BIT) that leverage artificial intelligence (AI) to flag potential flaws for review by trained technicians. Used in place of standard borescopes, BITs put fixed-position cameras in engine ports that capture blade images as the engine is rotated manually. Images then are analyzed by the tool and, if necessary, reviewed by technicians.

The first BIT, for GEnx Stage 1 and 2 HPT blades, halved the inspection time to 1.5 hr. compared to standard borescope inspections and improved both quality and accuracy, Chief Manufacturing Engineer Nicole Jenkins says. GE has since rolled out BITs for the Leap and GEN9x.

GE in early 2025 will formally open its Services Technology Acceleration Center, a dedicated facility near its headquarters in Evendale, Ohio, that will specialize in developing such technologies and getting them out quickly to the company’s MRO shops.

“This place will always, to some extent, look like it’s under construction,” Jenkins told Aviation Week during a late September tour. “That’s very deliberate, because if we’re successful, you’re continuously taking technologies in, maturing them, scaling them, then pushing them out and bringing the next thing in.”

Third-party providers have thrived for years finding efficient alternatives to pricier and increasingly unavailable OEM offerings. This will not be changing soon.

Talk of customers increasingly turning to parts manufacturer approval (PMA) options in response to high spares prices or sourcing challenges has become commonplace. In reality, the list of airlines that continue to resist PMA is short, with few large operators.

PMA growth is real, as financial reports from companies such as Heico underscore. Operators and MRO providers will continue to snap up available, reliable PMA parts that fill a need. While price matters, a cheap part that does not hold up will end up costing more than the most expensive OEM alternative.

While PMA growth is undeniable, little is in the high-demand critical engine part market. Chromalloy is an exception. The company landed approvals for two critical engine parts in 2024: a V2500 Select HPT Stage 2 blade and a CFM56-5B/-7B HPT Stage 1 vane. Add in a CFM56 low-pressure turbine vane approval from 2021, and Chromalloy now has three hot-section engine parts for the two most popular narrowbody engine types in service and is working on two more.

chromalloy part
Chromalloy is confident demand to keep engines flying and not waiting for spares will boost sales of its proprietary OEM-alternative parts. Credit: Chromalloy

“Chromalloy is the only company not affiliated with a large OEM with the capability and expertise to make hot-section aircraft engine PMA parts, one of the most expensive parts of aircraft engines,” RBC’s Ken Herbert wrote in an investor note.

While PMA acceptance is a given at most airlines, complex engine parts such as blades remain one area of hesitation. OEM programs that verify engine configurations as being to standard are part of the reason, since such engines typically maintain a higher residual value.

Chromalloy has produced thousands of HPT blades for older engines. The company is betting the same market forces that moved those products will benefit its latest investments, despite a hotly competitive aftermarket environment that has OEMs laser-focused on chasing services revenues.

“If there’s nothing available, and you’ve got an expensive asset sitting [waiting for parts], you become much more open to an alternate solution to get it back on wing,” Chromalloy CEO Chris Celtruda says. “In the next couple of years, the biggest consumer of our engineering resources is completing our high-value shipset on the [CFM56] and on the V2500-Select [variants], both from a PMA and [FAA-approved repair development] point of view.”

Sean Broderick

Senior Air Transport & Safety Editor Sean Broderick covers aviation safety, MRO, and the airline business from Aviation Week Network's Washington, D.C. office.