Etienne Muselier
Partner & Managing Director, Americas Leader, Aerospace, Defense & Airlines
New York
MRO spend boom is continuing: Aging commercial fleet and durability issues are expected to drive double-digit growth into 2027.
The golden MRO days are still here…
Solid demand for in-service aircraft growing at 3% CAGR between 2025 and 2035, coupled with significantdelivery delays from aircraft manufacturers are forcing airlines to postpone retirements through 2029.Consequently, global fleet age reached a record 14.8 years (vs. 13.6 years historical average). Aging fleet, olderaircraft and engines with shorter repair intervals are expected to boost double-digit MRO spend growth into 2027.
…however, unplanned disruptions need to be considered.
There remains a wide range of potential outcomes to the current Middle East conflict, each with possible respective disruption scenarios to Aerospace & Defense and the global economy.
A near-term resolution within the next 2 months could have a negligible impact on MRO spend if benchmark oil prices move well below $100 a barrel and crack spreads narrow, although airlines are already in cash preservation mode.
In the case of a prolonged conflict, the impact on MRO spend may significantly change, with airlines potentially being forced to park their oldest aircraft, delay repairs, or even retire a portion of their fleet and postpone deliveries.
We also expect challenges with global supply chains around semiconductors and specialty materials to negatively impact spares and repairs. For global networks, geopolitically driven logistics issues will continue to be a concern, especially with shared commercial and defense supply with defense requirements taking priority.
The USM sector has “grown up”
- A focus on optimizing unit cost has given way to time-to-part and opportunity cost of grounded assets
- Engine scarcity – years away from being fully resolved – is keeping older assets flying longer
- Integrated platforms becoming the norm: USM, consumables, MRO, leasing, etc.
- “Keep it flying” keeps winning, as part-out end-of-life bidders lose at auction, limiting supply
- OEMs increasingly active in the USM space, and appearing acquisitive when 3rd parties come to market
AI usage to elevate MRO along three main pillars
Predictive maintenance
- Shift from calendar‑based checks to condition‑based and predictive maintenance
- Uses sensor and maintenance data to cut unscheduled events and improve aircraft availability
- Flagship examples in defense fleets (e.g., USAF CBM+ / PANDA‑type programs)
Augmented workforce
- Human‑centric, AI‑guided MRO keeps technicians in the loop
- GenAI copilots speed troubleshooting, document navigation, and recordkeeping
- Addresses talent shortages and accelerates ramp‑up of junior maintainers
Digital twins/demand planning
- AI optimizes maintenance windows, parts, and capacity at fleet level
- Digital‑twin and integrated data platforms connect engineering, operations, and sustainment
- Turns MRO into an orchestrated readiness engine, not just a cost center
M&A to maintain strong momentum
M&A activity is not expected to slowdown, with the MRO demand peak still to come. It is still a good time to pursue deals within the MRO space.
We expect solid short/mid-term growth to continue driving M&A activity until the end of the decade, with long term growth drivers guaranteeing exit potential.
Tariffs and supply chain uncertainty
U.S. trading partners dealing with large trade imbalances under high reciprocal tariffs, creating uncertainty and risk for supply chains.
Global manufacturers and corporations must triage the near-term impact while preparing their strategy for the future.
2026 MRO Outlook
An aging fleet and persistent delivery delays are sustaining strong MRO demand through the decade. However, geopolitical disruption and supply‑chain pressures continue to test resilience across the MRO ecosystem.
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