2014 2024 GLOBAL MRO FORECAST MRO AMERICA cavok....

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  • ©TeamSAI

    NAVIGATING THROUGH THE UNPREDICTABLE

    UNCERTAINTY AND RISK . . .

    2014–2024 GLOBAL MRO FORECAST

    MRO AMERICA CONFERENCE

    APRIL 2014

    04/08/2014

  • ©TeamSAI

    NAVIGATING THROUGH THE UNPREDICTABLE

    A LOOK BACK

    2 04/08/2014

  • ©TeamSAI 3

    IN 2004, TEAMSAI PREDICTED MRO IN 2014 WOULD EXCEED $56B

    04/08/2014

    $42.7

    $56.5

    2004 2014

    2004 Forecast 2003 Forecast

    2004 2009 2014

    16,030 21,042 25,586

    2,873,863 3,691,000 4,491,000

    $11.6 $13.1 $14.5

    $10.1 $12.2 $14.7

    $6.9 $7.4 $8.9

    $8.5 $9.1 $10.9

    $37.0 $41.8 $49.1

    2004 Forecast 2014 Forecast

    BUT WOULD ANYONE SAY IT HAS BEEN AN EASY DECADE?

    Note: All values in 2014 $US

    .

    Total Jet Aircraft MRO Forecast (2014 $USB)

    $54.7

    2014 2024

    $83.3

  • ©TeamSAI 4

    RPM HISTORY COMPARED TO AIRLINE PROFITABILITY (1989-2013)

    04/08/2014

    Gulf War

    9/11

    SARS

    Global Financial Crisis

  • ©TeamSAI

    WHAT DOES IT MEAN FOR MRO PLANNING?

    04/08/2014

    MRO PLANNING

    risks and uncertainty abound…

    Forecast

    Uncertainties

    MRO

    Uncertainties

    Geo-

    Political

    Risks

    Natural

    Disaster

    Risks

    http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=EQr5OvTGZYx4eM&tbnid=n9XCxQgd6Ba8GM:&ved=0CAUQjRw&url=http://richard-seaman.com/Travel/Brunei/&ei=Ka0HU8vJG82bqAGe3oFA&bvm=bv.61725948,d.aWc&psig=AFQjCNGFrlYV1unO9tj3-zbvBpLFNwPsdA&ust=1393098327320788 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=mGTmM7rig_RGQM&tbnid=Fpy7R0jLqzJPIM:&ved=0CAUQjRw&url=http://www.commodityonline.com/news/china-housing-bubble-in-canada-could-create-the-next-financial-crash-42479-3-42480.html&ei=E64HU9a8I4i5rgHLx4HYDA&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=s3HN9D3nxQuHaM&tbnid=HA-4U8fe0PSydM:&ved=0CAUQjRw&url=http://libcom.org/library/return-crisis-part-2&ei=H64HU-OqE4mArAGCmoDwDQ&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=EQr5OvTGZYx4eM&tbnid=n9XCxQgd6Ba8GM:&ved=0CAUQjRw&url=http://richard-seaman.com/Travel/Brunei/&ei=Ka0HU8vJG82bqAGe3oFA&bvm=bv.61725948,d.aWc&psig=AFQjCNGFrlYV1unO9tj3-zbvBpLFNwPsdA&ust=1393098327320788 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=mGTmM7rig_RGQM&tbnid=Fpy7R0jLqzJPIM:&ved=0CAUQjRw&url=http://www.commodityonline.com/news/china-housing-bubble-in-canada-could-create-the-next-financial-crash-42479-3-42480.html&ei=E64HU9a8I4i5rgHLx4HYDA&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=s3HN9D3nxQuHaM&tbnid=HA-4U8fe0PSydM:&ved=0CAUQjRw&url=http://libcom.org/library/return-crisis-part-2&ei=H64HU-OqE4mArAGCmoDwDQ&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=EQr5OvTGZYx4eM&tbnid=n9XCxQgd6Ba8GM:&ved=0CAUQjRw&url=http://richard-seaman.com/Travel/Brunei/&ei=Ka0HU8vJG82bqAGe3oFA&bvm=bv.61725948,d.aWc&psig=AFQjCNGFrlYV1unO9tj3-zbvBpLFNwPsdA&ust=1393098327320788 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=mGTmM7rig_RGQM&tbnid=Fpy7R0jLqzJPIM:&ved=0CAUQjRw&url=http://www.commodityonline.com/news/china-housing-bubble-in-canada-could-create-the-next-financial-crash-42479-3-42480.html&ei=E64HU9a8I4i5rgHLx4HYDA&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=s3HN9D3nxQuHaM&tbnid=HA-4U8fe0PSydM:&ved=0CAUQjRw&url=http://libcom.org/library/return-crisis-part-2&ei=H64HU-OqE4mArAGCmoDwDQ&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=EQr5OvTGZYx4eM&tbnid=n9XCxQgd6Ba8GM:&ved=0CAUQjRw&url=http://richard-seaman.com/Travel/Brunei/&ei=Ka0HU8vJG82bqAGe3oFA&bvm=bv.61725948,d.aWc&psig=AFQjCNGFrlYV1unO9tj3-zbvBpLFNwPsdA&ust=1393098327320788 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=mGTmM7rig_RGQM&tbnid=Fpy7R0jLqzJPIM:&ved=0CAUQjRw&url=http://www.commodityonline.com/news/china-housing-bubble-in-canada-could-create-the-next-financial-crash-42479-3-42480.html&ei=E64HU9a8I4i5rgHLx4HYDA&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330 http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=s3HN9D3nxQuHaM&tbnid=HA-4U8fe0PSydM:&ved=0CAUQjRw&url=http://libcom.org/library/return-crisis-part-2&ei=H64HU-OqE4mArAGCmoDwDQ&bvm=bv.61725948,d.aWc&psig=AFQjCNGnW9y5U7L3GtcpwFP7ZyeMl7BgiA&ust=1393098562156330

  • ©TeamSAI 6

    DON’T GET COMPLACENT…GEO-POLITICAL RISKS CONTINUE

    04/08/2014

    slowdown in

    China • Chinese economic growth accounts for 24% of net global

    growth

    G E

    O -P

    O L

    IT IC

    A L

    currency

    fluctuations

    • Threatens airlines in emerging markets such as India and Indonesia

    • Ticket prices

    • Ability to purchase oil and parts

    short term

    short to

    medium

    term

    China as a share of

    net economic growth ¼ Ticket prices

    US$-denominated oil

    Non-local spare parts ▲

    ?

    emerging market

    currency fluctuations

    slowdown in

    China

    http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=UHxpiIHAW37iSM&tbnid=9Zuq06GpNbfKVM:&ved=0CAUQjRw&url=http://www.bbc.com/capital/story/20130628-lurking-currency-risks&ei=3-AMU-_5E4fnqwHhw4D4CA&bvm=bv.61725948,d.aWc&psig=AFQjCNEv1CBT_EAoScXsNDlce1f9Lc5BPQ&ust=1393439298082230

  • ©TeamSAI 7

    DON’T GET COMPLACENT…MRO RISKS ABOUND M

    R O

  • ©TeamSAI

    NAVIGATING THROUGH THE UNPREDICTABLE

    FLEET AND MRO

    OUTLOOK

    8 04/08/2014

  • ©TeamSAI

    year-by-year fleet forecast

    year-by-year MRO forecast

    improved airframe modifications model

    improved component MRO model

    improved line maintenance model

    implemented engine shop visit model and

    improved interval driver methodology

    improved labor/material differentiation across all

    models

    9

    MODEL ENHANCEMENTS FOR 2014

    04/08/2014

    http://www.vtlmi.info/occvid/49-3011.01.mpg https://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=7QV-5444UVdNjM&tbnid=sHwc6V1rhz53wM:&ved=0CAUQjRw&url=https://www.asdreports.com/news.asp?pr_id=1838&ei=6Wg8U8bpE7LPsAT-7oGIBw&psig=AFQjCNH3QYBRiVYuM38lbJ9DPR-AHEhK7Q&ust=1396554305697519

  • ©TeamSAI 10

    GLOBAL FLEET OUTLOOK - COMMERCIAL AIRLINE SECTOR

    04/08/2014

    2014-2024

    Growth

    Rate

    2024

    Market

    Share

    0.8% 24%

    2.1% 18%

    4.4% 17%

    7.3% 12%

    5.1% 8%

    5.6% 6%

    5.8% 6%

    5.1% 5%

    11.4% 3%

  • ©TeamSAI 11

    GLOBALLY, THE MRO GROWTH OUTLOOK IS HEALTHY

    04/08/2014

    $58B-

    $87B Global Market

    Size

    +4.2%

    CAGR

    2014-2024

    Airframe 4.1% 20%

    Engine 4.1% 38%

    Component 4.4% 22%

    Line 4.1% 20%

    CAGR % SHARE

  • ©TeamSAI 12

    MRO REGIONAL MARKET SHARES CHANGE DRAMATICALLY BY 2024

    04/08/2014

    ME/Africa • ME will double by 2024, driving majority of

    growth

    Asia • Asia will be the largest MRO market by 2024

    Europe • EU to have moderate MRO growth, at 2.9%

    Americas • Large-scale fleet replacement in NA

    translates to flat MRO

    • LA&C market drives

    growth

    Americas

    Europe

    Asia

    ME/Africa

  • ©TeamSAI 13

    NORTH AMERICAN FLEET GROWTH WILL BE LIMITED

    04/08/2014

    pax traffic 2014F (IATA) ▲ 2.5% RPK

    current fleet 2014 (Ascend Online) 7,305

    fleet CAGR 2014-24 (TeamSAI) +0.8%

    deliveries 2014-24 (TeamSAI) 3,700+