Podcast: What Lies Ahead For MRO In 2025?

Listen in as Aviation Week editors discuss what could be on the horizon for MRO in 2025, touching on turnaround times, AI and aircraft recycling, plus module swaps, parts approvals and more.

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Transcript

James Pozzi:

Welcome to the MRO Podcast. I'm James Pozzi, Aviation Week's MRO Editor for the EMEA region. This episode you're listening to is the first MRO podcast of 2025. So today we are looking at what my lie ahead for the commercial aftermarket in 2025 and the year ahead. So joining me today, it's a bit of an all-star lineup, really. We have Lee Ann Shay, Executive Editor for MRO and Business Aviation for Aviation Week. Sean Broderick, who of course is Aviation Week's Safety Editor, Dan Williams, director of Fleet Data Services at Aviation Week. And of course Lindsay Bjerregaard, who is Managing Editor MRO at Aviation Week.

James Pozzi:

Lee Ann, Sean, Dan, Lindsay, welcome.

James Pozzi:

Just to start, Leanne, we'll start with yourself. How would you characterize the aftermarket last year in terms of some of the things we saw, in terms of maybe around how the market was growing or recovering. And from your point of view, what do you think we can expect going into 2025, which we are of course now in? How's this year going to be a development from last year?

Lee Ann Shay:

The MRO market was very strong in 2024 and it's still capacity constrained supply chain labor. We've talked about this ad nauseum. But going forward, I think 2025 is going to be a similar year and I would like to jump into the predictions. Instead of looking back, I'd like to look forward. So if you don't mind, I'm going to hijack this podcast. I would actually defer to Dan Williams to kick off 2025.

Dan Williams:

All right, nothing like being put under pressure. Thank you, Lee Ann.

Dan Williams:

2024 was, depending on how you look at it, from an MRO point of view was an outstanding year in some respects. Because the amount of MRO stuff that was coming through the shop floor was very large indeed. 2025... I expect a little bit more of the same. I won't talk about GTF quite yet because I'm sure Sean will talk about that as a part of it. But we are looking at, if we take a look at the forecast, the Aviation Week forecast 2025 that come out. We are predicting terms of airframe heavy maintenance, nearly 13,500  in 2025, which is a huge number. And engine events, we're looking at nearly 9,000 engine events in 2025 as well. So that's a huge amount of work's come in the door. In terms of that airframe heavy, in terms of D checks, it's the 737-800s.

Dan Williams:

They're getting in that zone now where the 737 next gens, they have a D at nine, roughly 15, 21. They're all in this kind of bucket right now. So lots of D checks coming through for those. Likewise, the classic A320s, I suppose you could say. Similarly, they're in that bucket where they're getting a lot of D checks as well. So there's a lot of narrowbody D checks to come up. And a lot of C checks coming up. We did a podcast the back end of 2024 talking about the 787. That's another thing that's going to slowly come into fruition over the coming year, that's for sure. And then in terms of the engine side, which in terms of the dollar amount is much larger. The CFM56 family of engines, t's over 3,000 overhauls. Just overhauls. Not LLPs, anything like that. Pure overhauls.

Dan Williams:

So that's a huge demand. And yes, it's, you suppose you'd call it a legacy engine. However, it's in its prime right now. It's now at the point where CFM reaping the benefits of having an engine that's carrying on so long. And with you look at the difficulties with the OEMs, with the new aircraft and the new engines and the issues that they're having. The CFM is being lent on a little bit more to keep going. And then that leads us into the GTF debate of what will happen with them. So that's probably one for Sean, right?

James Pozzi:

Yeah, perfect. Good segue, actually. Sean, bringing you into this. What are some of your predictions maybe around some of the things? Dan also gave us some really good data and an insight into some of the demand there as well. But what's some of the predictions you've got, especially maybe around the engine market, for example, which you've covered extensively for us.

Sean Broderick:

Sure. Well, no surprise that the engine market is still going to dominate MRO, sort of writ large. It's going to take about half of the, generate about half of the revenue. In terms of what may be different, we'll start with the GTF, the Gear Turbofan. Fingers crossed, Pratt's predictions for stable number of groundings around 300, 350 airplanes on any given day will, if it changes, it'll go down. Hopefully it will not go up. But the one big change that we're expecting to hear out of RTX Pratt's parent company, hoping to hear sometime soon, is they're finally delivering full-life parts affected by the powder metal, contaminated powder metal situation. Finally able to deliver enough of those parts to MRO shops. So every engine coming in that needs one of those parts swapped out can get a full-life part and go back out, and the engine can stay on wing for the originally predicted interval.

Sean Broderick:

Right now, as listeners of this podcast and readers of our publications probably know all too well, some of the life limits on the critical parts affected by the powder metal are requiring engines to come off-wing within a year's time for the airplanes that are the busiest. Mostly A-320 neo family airplanes that are running up against that in some regions where, or with some airlines that are extremely, extremely active in terms of hours and cycles per day. The hope is that that eases and also the turnaround times, which we're hovering around RTX's prediction, wing to wing times of around 300 days, those will also begin to come down. I mean, taking folks back, this all started in September of 2023. That was the very, very sharp end of the stick. The engines that needed the inspections most, it was about a hundred back then started to come off-wing.

Sean Broderick:

They really started to come off in early 2024. So if you look at a 300-day turnaround, the engines were really only starting to come back in the, let's call it the August, September, October time period. Most operators are saying that that 275- to 300-day turnaround time is accurate, but there are some that say it's been more. Pratt and its risk-sharing partners, MTU being the principal one, they're working to lower those turnaround times. And that's one way we could see that peak number of aircraft, that 350, come down. CFM 56 is going to continue to go up, like Dan said. Not looking for total shop visit volume to peak until perhaps '25, maybe '26, '27. But GE and Saffron both saying it's sort of going to be a plateau now, not so much of a peak in any given year. Again, that goes back to what Dan had talked about. Waiting on the Trent 1010 blade approval, 787 flying tests flying. If it's not done, it's close to wrapped up.

Sean Broderick:

That's a big deal for Rolls Royce. They talked about it being done by the end of 2024. That didn't happen. I'm going to make that prediction. It didn't happen. Early 2025, fingers crossed, a lot of durability to be gained there once those blades start coming out. And the rollout, going back to the back to the CFM's real quick on the leaps, roll out of the reverse bleeds systems going to continue to get after the coking issue that's causing fuel nozzles to come off-wing prematurely. And then they just also had a blade certified too on the LEAP-1A. 1B coming in late 2025, we hope. Again, going to improve on durability issues that have plagued that platform, is not as much as on the GTF, but the LEAP has not been immune. So some positive developments on the OE side, and we can get into the MRO side because there's going to be lots of, and creativity and positive stuff too with module-swapping instead of full overhauls. Lots of good things going on on the independent or quasi independent MRO side too. That's only going to accelerate this year, I think.

James Pozzi:

Yeah, absolutely. And there's a really good summary there of what's going on with the OEMs and obviously referencing some of the MRO stuff as well. Module swaps was something I had as a prediction actually in a piece I wrote at the end of last year for 2025. Probably not a very bold, one of my bolder predictions, but that's certainly something I think we'll see a lot more of and seems to be the case others do as well. Leanne and Lindsay bring you back in. Maybe starting with Leanne, what are your key predictions for 2025? What do you see maybe happening that we should be alert to?

Lee Ann Shay:

Thank you for the question. I think that 2025 is going to be the year of engine MRO. I already talked about that in the Check 6 Predictions podcast that will be coming out. But specifically for MRO, other than engine aftermarket, I think there's going to be a big push or a big rollout of new digital tools and artificial intelligence. Lindsay has been writing a lot about AI.

Lee Ann Shay

Granted, there are new hangars that are going to be coming on market and there is a need for more capacity, but MROs are making concerted efforts to become more efficient. That's going to help the supply chain problems. That's going to help the labor problems just by optimizing everything from scheduling to labor to process. It's kind of, think about it as the next stage of predictive maintenance. Predictive maintenance is not new, but if you could use these digital tools to make that whole MRO ecosystem more predictable, I think that's going to make a big impact. And then conversely, for MROs that are not working on those kind of things, I think that they're going to be left behind. I think there's going to be a little bit of a split in the market coming up.

James Pozzi:

Interesting. Yeah. Which, I'll bring in Lindsay as well. Lindsay, I know you've got some interesting things to talk about as well. Starting on the aircraft recycling things side of things. What do you see maybe happening there in 2025?

Lindsay Bjerregaard:

Thanks, James. So before I get into that, I did want to just add on to what Leanne had said about artificial intelligence. It seems like every company that we talk to, when we ask them about what kind of technology initiatives they're working on, AI comes up. Some of the bigger companies. I believe Lufthansa Technique just announced a partnership in December related to developing more AI capabilities with Microsoft. I think the press release they sent out said they're working on 50 different use cases. AFI, KLM, E&M say that they have 80 different internal use cases they're working on. So I do definitely expect to see a lot of that in 2025. Regarding aircraft recycling, I think this ties in a bit to what Sean and Dan talked about, with some of these new generation aircraft and engine issues. Presumably based on some of the fixes that have been rolled out through 2024, we will start to see those backlogs of new generation aircraft subside a bit in 2025.

Lindsay Bjerregaard:

And so I think that will mean that some of these older aircraft that have had their lives extended longer than expected will finally be ready to retire. And last year Airbus had predicted in its global services forecast that they're expecting the dismantling and recycling market to see a 7.5% compound annual growth rate over the next 20 years. So they're expecting global demand for around 500 aircraft teardowns annually during that time period. They're predicting that nearly 19,000 older generation aircraft will be replaced during that time, which will generate around 52 billion in used serviceable material. So between their new Airbus Lifecycle Services Center, JV in China, some of the new players that got into the aircraft recycling market in 2024, there should be a lot of action there. And then 2024 also saw a couple industry groups form to improve aviation recycling overall, accelerating what types of materials can be recycled, that sort of thing.

Lindsay Bjerregaard:

So there was the Aviation Circularity Consortium. There was Aethos, which was founded by some former Aircraft Fleet Recycling Association board members. So definitely expect to see some action there. The other thing that I think, potentially we might see some interesting action in 2025, is we'll see some of these advanced air mobility companies solidify their maintenance plans. So in previous years, including 2024, we saw a lot of partnerships being announced between these eVTOL developers and MRO providers like FEAM, AFI KLM E&M, And 2025 is the year that several of these eVTOL companies are planning their first flights, their full-scale prototypes. So I'm expecting to see some of that start to solidify. We might learn more details about what's happening there.

Lindsay Bjerregaard:

Last year, Eve Air Mobility, which is Embraer's AAM subsidiary, announced some plans about building up maintenance capabilities around Paris-Le Bourget Airport. And then in October, Eve also announced a services portfolio offering called Techcare. So clearly they're working on building some of this up as well.

Lindsay Bjerregaard:

And then I guess on the training side of this, we're also starting to see some efforts by industry stakeholders to standardize training and certifications for AAM technicians. Last year there was the AM Tech Project out of Europe, which is inspired by the EU's Europass system. For those who don't know what that is, it's an online set of tools that helps job seekers create CVs in a format that's widely accepted throughout the EU. So they created a similar passport program for AAM technicians, and I think there's some action happening in the US as well, with the FAA to try to standardize that on this side. So I think we'll see more progress there as well in 2025.

James Pozzi:

Excellent. Thank you, Lindsay. And just throwing out really to everyone on the podcast. As we come towards the end now, any closing thoughts? Any other kind of predictions that maybe some of you may not have mentioned yet? Is there anything else anyone wanted to maybe share or touch on today?

Dan Williams:

I'll chip in two very quick ones. And it's not unusual stuff. It's all about OEMs. The OEMs and new build aircraft is ultimately going to shape the MRO of '25 and '26. So I think that obviously we had the recent Boeing strike, which had subsequent knock-on effects, quite a lot knock-on effects. And Sean and I have written about, oh, well Sean's written about with me buzzing in his ear, about what effects that's going to have on, for example, the max production in 2025. And it's probably somewhere like a hundred aircraft or thereabouts, less than it would've produced had the strike not happened. So ultimately the key to MRO is you look at the OEM for new build and that only not only has an immediate knock-on effect with MRO, but we'll have latent MRO knock-on effects. Because if you produce less aircraft in 2025, then you have less MRO in nine years after when it should have its first deed check there and thereabouts. So it adds to the ebbs and flow of future MRO as well. So that's just my quick take.

Sean Broderick:

Yeah, and that hundred airplanes, that's a hundred airplanes that were not just going to go sit around and fly once a week. That's a hundred airplanes that we're either going to help open new routes. So that's impact on MRO there, like Dan was talking about. Or we're going to replace airplanes already flying.

Sean Broderick:

And probably maybe more than half of the airplanes being delivered now, according to Boeing and Airbus, are earmarked for replacement. That's going to ease a little bit towards the end of the decade, but that's significant. So the last thing I want to mention ties into several things that we talked about. Efficiency and manufacturers recognizing that they have some issues. So I had the opportunity to walk through GE Aerospace's new Service Technology Acceleration Center in Evendale in late 2024. Basically what they've done is they have taken all of their repair development and process development that was done, that has been done throughout their shops, throughout the organization, and they've centralized it in really a glorified laboratory that has engineers from all over the world that come and helped develop, and importantly, industrialize processes that help keep GE and CFM engines going.

Sean Broderick:

Myriad examples there, but to give you an idea what they're doing, they're developed an improved borescope-like process, that instead of having a technician with a camera sticking through the portholes and inspecting blades as they go by, it takes cameras, installs them in the ports, takes the images, uses AI to process those images, flag them. And then a trained technician can look at what has been found.

Sean Broderick:

So if you think about how long it takes one technician to look at, say, a GE-90 disc. This process goes from maybe all day with the technician spinning and looking at images, cuts it to three hours. And more importantly, takes that skilled technician out of that 10-hour hole. And they can look at images that have been flagged by AI. Take that kind of process, come up with one way to do it, get it out to all your partner shops, and then you've exponentially improved both efficiency and use of your labor, and accuracy as well. So that's just one example of what they're doing. They're not alone. Pratt and Rolls is doing things like this as well. But these are the kind of things that are going to use the same footprints, the same approved processes that are approved by the regulators to get the same things that are being done now in a much more efficient way. So I think you're going to see a lot of that talked about starting this year and going forward, and it's going to be kind of cool to cover.

James Pozzi:

Thank you, Shawn. It's time to wrap up now, sadly. We've cut a lot of areas in just 20 minutes or so. So I thank you. Leanne, Shawn, Dan, and Lindsay, thank you today for your contributions. And I'd be interested to maybe listen back a year from now and see how things play out and whether we were correct in some of our predictions in 2025 and see how that plays out.

James Pozzi:

But yeah, thank you today for joining us. And just a little thank you as well to the listeners for listening to our podcast. And here's to an even better 2025. And obviously lots of interesting topics to cover this year. Don't miss the next episode by subscribing to the MRO podcast wherever you listen to podcasts. And one last request. If you are listening in Apple Podcasts and want to support this podcast, please leave us a star rating or write a review. Thanks.