As demand has roared back, the ability for many MROs to meet it as efficiently as in past years has eroded. Labor-intensive Airframe and Component MROs are grappling with skilled labor shortages. Engine MROs – which require a steady stream of spare parts from OEMs – are beginning to lack just that. All of this is occurring in the midst of the long-awaited aftermarket recovery – many are nearing 2019 levels in the last year of business, and a few have exceeded it. The question is, can the aftermarket capitalize on the strong fundamentals of this recovery?
Slowing component repair turn-times and emerging subcomponent delays across the market are driving a temporary “flattening” of the market, where top-tier demand typically served by OEMs or leading independents is flowing down to the secondary aftermarket. “Who actually has this part or has the means to fix it quickly?” Overall, it is an interesting convergence of factors that we think will drive significant changes in the aftermarket. Alternative repairs (DERs), alternative parts (PMAs), Used Serviceable Material, and a more flexible independent aftermarket as a whole are likely to be an increasing area of focus for the market – and also pose compelling investment strategies.