IAG cuts its full-year profit guidance after first-half loss while we look at a CDS comparison
3rd August 2012
As commercial aviation enters 2026, few parts of the industry are under as much sustained pressure as maintenance, repair, and overhaul (MRO).
While airlines are enjoying strong demand and equally strong capacity growth, the infrastructure that keeps aircraft flying is struggling to keep pace.
Much of the MRO capacity shortfall is a direct result of the pandemic shock and its lingering effects on OEM productivity, the parts supply chain, and the labour market.
In value terms, the MRO sector recovered from the pandemic faster than the manufacturing sector, but this trend has run its course — and the two sectors are now set to change places.
Over the next decade, according to the IATA and Oliver Wyman, the OEM market is projected to grow by an average of 6% per year, while the MRO market is projected to grow by an average of 3% per year.
In their joint paper, ‘Reviving the Commercial Aircraft Supply Chain’, IATA and Oliver Wyman argue that this imbalance will set the pace for the MRO sector in the years ahead.
In 2025, they estimate that the MRO market will be worth almost $120bn, and by 2030, it will exceed $150bn.
While this growth trajectory is positive from a demand and revenue perspective, it also highlights the key challenge of delivering greater MRO capacity in a unique market environment in which aircraft are in historically short supply.
As IATA and Oliver Wyman say of the MRO sector: “Growth is being driven by the dual forces of an aging fleet, which requires more maintenance, and the maintenance needs of new aircraft, which are experiencing teething issues — especially, but not exclusively, in the form of costly engine visits that are occurring earlier than expected”.
Healthy demand meets uncertain supply
At a high level, the outlook for the global MRO market remains structurally positive. The in-service fleet continues to grow, utilisation rates remain elevated, and OEM backlogs are extending the operational lives of existing aircraft.
However, growth in demand has not been matched by growth in capacity. Engine shop visits are increasingly difficult to schedule, turnaround times (TATs) have lengthened, and airlines are holding onto aircraft longer than planned simply because replacements are not yet available.
In its 2025 MRO Survey, Oliver Wyman found that more than 75% of respondents reported longer engine maintenance TATs, with more than 60% noting similar delays for interiors, avionics, and landing gear.
For engines, TATs have risen sharply from the industry standard of 30–60 days. Shop visits are now lasting more than 300 days in some cases, with full overhauls lasting around 75 days and quick turns around 50 days.
When asked why TATs have increased, 80% of survey respondents cited parts availability as the top issue, ahead of supply and demand imbalances, insufficient labour, and OEM control of key repairs.
David Stewart, partner for aviation and aerospace at Oliver Wyman, told Airline Economics that improving supply chain performance will be a “key focus” for the MRO sector in 2026.
“This involves increasing transparency and collaboration across the entire value chain, alongside optimising the use of inventory and maintenance data,” he said.
“Consolidation is another promising avenue, particularly within fragmented segments of the MRO value chain such as distribution, component MRO, end-of-life material solution providers, and line maintenance.”
Parts shortages are also driving greater demand for used serviceable material (USM) and PMA parts, but these options remain constrained by limited teardown availability, regulatory bottlenecks, and uneven acceptance among airlines and lessors.
However, as noted by Stewart, these shortages could be mitigated by greater flexibility and industry collaboration.
“Strengthening aftermarket partnerships is anticipated to boost repair and pooling options, helping to mitigate challenges related to limited parts availability and elevated costs,” he said.
“Additionally, there is a growing openness among engine OEMs and component OEMs to engage third-party providers for MRO capacity.”
Labour shortages remain the most structural constraint
If supply chain disruption is the most visible challenge facing MROs, labour availability is the most structural.
During the pandemic, the MRO sector lost a substantial portion of its skilled workforce, as large numbers of experienced technicians opted for retirement — many earlier than planned.
The post-pandemic recovery has exposed how difficult these losses are to reverse, and current demographic trends do not point to an easy or quick fix.
According to Oliver Wyman’s latest MRO survey, more than one-third of aircraft mechanics in North America are at or near retirement age, and it can take 2-3 years for newly hired aircraft maintenance technicians (AMTs) to become fully productive.
As a result, wage inflation, retention challenges, and skills mismatches have become endemic across the sector.
Jeffrey Lam, president of commercial aerospace at ST Engineering, told Airline Economics that navigating these labour constraints will be a key challenge in 2026.
“As demand for air travel continues to rise, MROs must balance the increased workload while also dealing with unpredictable delays from suppliers and workforce gaps,” he said.
“On a brighter note, these are not new hurdles. MRO providers have long learnt to deal with such complexities, equipping themselves with strategies to maintain operational efficiency.
“Leading providers will continue to embrace innovation, optimising their operations and investing in talent to ensure they remain resilient and flexible at the same time.”
A system-wide challenge, not an MRO problem
One of the clearest messages from recent industry analyses is that MRO challenges cannot be solved in isolation.
MRO providers sit at the intersection of airlines, OEMs, suppliers, and regulators, and disruptions upstream feed directly into downstream maintenance demand.
This interconnectedness means that incremental fixes are unlikely to be sufficient, as opposed to coordinated action across the aviation ecosystem.
IATA and Oliver Wyman outline a series of actions aimed at strengthening the commercial aviation supply chain as a whole — many of which apply directly to MRO.
Workforce development is the most urgent, and could include expanding training pipelines, improving certification flows, and accelerating skills development.
As noted by Stewart, the training supply chain represents both a “challenge and an opportunity”, as the shortage of skilled personnel to support MRO capacity growth remains “acute”.
“This gap is driving innovation in training methods, incentive programmes, and recruitment strategies,” he said.
“AI is increasingly demonstrating a tangible impact on productivity within airline technical operations, especially when applied to well-suited use cases.”
Stewart also noted that ongoing economic and geopolitical uncertainties are prompting airlines to favour suppliers located closer to their operations or in less volatile regions.
“This shift opens opportunities for both new entrants and established MRO providers to expand their capacity or broaden their service offerings,” he said.
Supply chain visibility is another critical area where data-sharing between OEMs, suppliers, airlines, and MROs could improve forecasting and reduce costly surprises.
Echoing Stewart’s comments, Lam also believes that digital tools in this area are beginning to deliver tangible benefits.
“Predictive maintenance, automation, and data analytics have come a long way in enhancing MRO productivity,” he said.
“In 2026, greater integration of AI and machine learning is expected to further optimise efficiency, reduce costs, and help fill some workforce gaps.”
For MRO providers, airlines, and OEMs alike, the coming year will test not just technical capability — but the industry’s ability to act collectively to meet shared challenges.