Fitch Ratings says that maintenance, repair and overhaul (MRO) remains a supportive factor for aerospace and defence (A&D) companies’ ratings due to the diversification and higher margins it provides, and generally less cyclical cash flows. In particular, the rating agency states that it believes the 2016 earnings revision recently announced by Rolls-Royce was partly caused by lower service work at the commercial aerospace division is company-specific and represents an aberration in the A&D sector. Service work, including MRO and spare parts, serves as a complementary function to the manufacturing process and typically accounts for less than 25% of an A&D

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