The Global Military Aviation MRO Market 2012–2022

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					                                   The Global Military Aviation MRO Market
                                   2012-2022




www.strategicdefenceintelligence.com                                           icdreports@progressivedigitalmedia.com

             John Carpenter House, 7 Carmelite Street, LondonEC4Y 0BS, United Kingdom, Tel: +44 (0)20 7936 6830
The Global Military Aviation MRO Market 2012–2022

TABLE OF CONTENTS
1      Introduction ......................................................................................................................... 12
    1.1 What is this Report About? ..............................................................................................................12
    1.2 Definitions .......................................................................................................................................12
    1.3 Summary Methodology ...................................................................................................................14
    1.4 About Strategic Defence Intelligence (www.strategicdefenceintelligence.com) ...............................15
2      Executive Summary ............................................................................................................ 16
3      Global Military Aviation MRO Market Size and Drivers .................................................... 18
    3.1 Military Aviation MRO Market Size and Forecast 2012–2022 ..........................................................18
        3.1.1      Global military aviation MRO market to show positive growth during the forecast period ....................... 18
    3.2 Global Military Aviation MRO Market – Regional Analysis ...............................................................19
        3.2.1      North America dominates the global military aviation MRO market ......................................................... 19
        3.2.2      Demand for Attack Aircraft MRO in the US to support the global Military Aviation MRO market ............ 22
        3.2.3      Military aviation MRO market to be robust in Europe due to planned budget cuts .................................. 23
        3.2.4      The aviation MRO market in the Asia-Pacific to be driven by spending in China, Australia and India .... 24
        3.2.5      Military aviation MRO market in the Middle East to increase during the forecast period ......................... 25
        3.2.6 Brazil expected to be the highest spender in the Military Aviation MRO sector in the Latin American
        region .................................................................................................................................................................. 26
        3.2.7      Military aviation market in Africa expected to increase over the forecast period ..................................... 27
    3.3 Military Aviation MRO Sub–Sector Market Size Composition ..........................................................28
        3.3.1      Attack Aircraft MRO market to record strong CAGR growth .................................................................... 28
        3.3.2      Transport aircraft MRO to account for the second largest segment in this sector ................................... 30
        3.3.3      Market for rotor craft MRO to account for the third largest segment in this sector .................................. 31
        3.3.4      Market for UAV MRO to register a CAGR of 3.54% during the forecast period ....................................... 32
    3.4 Demand Drivers and Growth Stimulators ........................................................................................33
        3.4.1      Aging military aircraft fleet ........................................................................................................................ 33
        3.4.2      Technological innovations driving the military MRO market..................................................................... 33
    3.5 Defense Budget Spending Review ..................................................................................................35
        3.5.1      European capital expenditure expected to increase during the forecast period ...................................... 35
        3.5.2      Asian defense budgets expected to increase at a robust pace ................................................................ 36
        3.5.3      North American defense expenditure projected to decline marginally during the forecast period ........... 37
        3.5.4      Modernization programs likely to drive defense expenditure in South American countries ..................... 38
        3.5.5      Military budgets of African countries expected to increase during the forecast period ............................ 39
        3.5.6      Defense budgets of Middle Eastern countries likely to increase during the forecast period .................... 40
    3.6 Defense Modernization Review .......................................................................................................41




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    www.strategicdefenceintelligence.com                                                         icdreports@progressivedigitalmedia.com
The Global Military Aviation MRO Market 2012–2022

        3.6.1     Financial constraints causing delays in European defense modernization programs ............................. 41
        3.6.2     Defense budgets of Asian countries likely to be driven by competitive arms acquisitions ....................... 41
        3.6.3     Global economic slowdown leading to defense budget cuts in the North American region ..................... 41
        3.6.4     Need to replace aging equipment driving South American defense expenditure .................................... 41
        3.6.5     Security threats increasing the defense budget of African countries ....................................................... 42
        3.6.6     Demand for air defense systems is likely to increase in the Middle East ................................................. 42

4      Industry Trends, Recent Developments and Challenges ................................................ 43
    4.1 Technological Developments ..........................................................................................................43
        4.1.1     DSTO has developed the C-130J aircraft propeller balancing software .................................................. 43
        4.1.2     Snubber technology to result in cost savings in engine repairs ............................................................... 43
        4.1.3     An acoustic system developed to monitor the structural integrity in military aircraft ................................ 43
    4.2 Market Trends .................................................................................................................................45
        4.2.1     Countries outsourcing MRO work ............................................................................................................. 45
        4.2.2     Growth in performance based logistics (PBL) contracts .......................................................................... 45
        4.2.3     Civil MRO providers crossing over to the military domain ........................................................................ 45
    4.3 Industry Consolidation .....................................................................................................................47
        4.3.1     Joint programs expected to increase over the forecast period................................................................. 47
        4.3.2     Companies are expected to consolidate in the face of global defense budget cuts ................................ 47
        4.3.3     Private equity interest growing in the aviation MRO sector ...................................................................... 48
    4.4 Key Challenges ...............................................................................................................................49
        4.4.1     High taxes hamper indigenous growth in some countries ........................................................................ 49
        4.4.2     Lack of skilled personnel .......................................................................................................................... 49

5      SWOT Analysis of the Military Aviation MRO Market ....................................................... 50
    5.2 Strengths.........................................................................................................................................51
        5.2.1     Military aviation MRO outsourcing by leading defense spending nations driving growth for the sector .. 51
        5.2.2     Procurement and modernization initiatives driving the market ................................................................. 51
        5.2.3     Force readiness initiatives by major defense spenders are providing impetus for market growth ........... 52
    5.3 Weaknesses ...................................................................................................................................53
        5.3.1     Lack of domestic MRO capabilities in some countries ............................................................................. 53
        5.3.2     Long cycle times often lead to a reduction in military equipment inventories .......................................... 53
        5.3.3     Performance based contracts impair profitability for aviation MRO providers ......................................... 54
    5.4 Opportunities...................................................................................................................................55
        5.4.1     Many nations currently possess aging fleets of aircraft ............................................................................ 55
        5.4.2     Defense budget cuts expected to channel more funds towards the military aviation MRO sector .......... 55
    5.5 Threats............................................................................................................................................56
        5.5.1     A large portion of the MRO workload brought under the ambit of government depots in US .................. 56




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    www.strategicdefenceintelligence.com                                                  icdreports@progressivedigitalmedia.com
The Global Military Aviation MRO Market 2012–2022

       5.5.2      The US and European economic crisis .................................................................................................... 56

6      Country Analysis – Military Aviation MRO Market ........................................................... 57
    6.1 United States Market Size and Forecast 2012–2022 .......................................................................58
       6.1.1      Attack aircraft MRO expected to account for the largest share of US military aviation MRO expenditure61
       6.1.2 Transport Aircraft MRO segment of military aviation MRO expected to constitute the second largest
       market share in the US ......................................................................................................................................... 63
       6.1.3      Rotorcraft MRO segment to exhibit a CAGR of 2.05% during the forecast period .................................. 65
    6.2 France Market Size and Forecast 2012–2022 .................................................................................67
       6.2.1      Military Aviation MRO market to be attractive in France during the forecast period ................................ 67
       6.2.2      Attack aircraft MRO market to be attractive in France during the forecast period ................................... 70
       6.2.3 European heavy lift helicopter maintenance contract to drive the rotorcraft MRO market during the
       forecast period ...................................................................................................................................................... 71
       6.2.4      Maintenance of A400M aircraft to be a major program in transport aircraft MRO market ....................... 73
    6.3 Russia Market Size and Forecast 2012–2022 .................................................................................74
       6.3.1      Expenditure on attack aircraft MRO to be robust during the forecast period ........................................... 78
       6.3.2 Maintenance services for Mi-8 multi-role helicopters to be a major program in Russian rotorcraft MRO
       market .................................................................................................................................................................. 79
    6.4 The United Kingdom Market Size and Forecast 2012–2022 ............................................................80
       6.4.1      Attack aircraft MRO market in the UK to increase during the forecast period .......................................... 84
       6.4.2      Transport aircraft MRO market to register robust growth during the forecast period ............................... 85
       6.4.3      Integrated Merlin Operational Support (IMOS) contract to be a major program in rotorcraft MRO market86
    6.5 Saudi Arabia Market Size and Forecast 2012–2022 ........................................................................87
       6.5.1      Attack aircraft MRO market expected to increase during the forecast period .......................................... 89
       6.5.2      Rotorcraft MRO market to be robust during the forecast period .............................................................. 90
    6.6 UAE Market Size and Forecast 2012–2022.....................................................................................91
       6.6.1      Rotorcraft MRO market expected to increase during the forecast period ................................................ 93
       6.6.2      Overhaul of C-130J transport aircraft to be a major program in transport aircraft MRO market .............. 94
    6.7 Australia Market Size and Forecast 2012–2022 ..............................................................................95
       6.7.1      MRO contracts for various fighter aircraft to drive attack MRO expenditure ............................................ 98
       6.7.2      Australia to spend US$1.7 billion on maintaining, repairing and overhauling its fleet of transport aircraft99
    6.8 China Market Size and Forecast 2012–2022.................................................................................100
       6.8.1 China is expected to invest heavily in attack aircraft MRO to maintain its growing fleet of multi-role
       fighters ................................................................................................................................................................ 103
       6.8.2      China expected to allocate US$8.9 billion towards military rotorcraft MRO ........................................... 104
    6.9 India Market Size and Forecast 2012–2022 ..................................................................................105
       6.9.1      India’s aviation MRO market driven by the significant investment in procuring military fighter aircraft .. 108
       6.9.2      India expected to spend US$3 billion on transport aircraft MRO over the forecast period .................... 109




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    www.strategicdefenceintelligence.com                                                        icdreports@progressivedigitalmedia.com
The Global Military Aviation MRO Market 2012–2022

    6.10 Brazil Market Size and Forecast 2012–2022 .................................................................................110
       6.10.1 Rotorcraft MRO expected to be the highest segment of expenditure by Brazil on military aviation MRO112
       6.10.2 Transport aircraft MRO segment expected to exhibit a CAGR of 5.97% during the forecast period ..... 113
    6.11 Colombia Market Size and Forecast 2012–2022 ...........................................................................114
       6.11.1 Colombia’s expenditure on transport aircraft MRO to increase at a CAGR of 4.62% ............................ 116
    6.12 South Africa Market Size and Forecast 2012–2022.......................................................................117
       6.12.1 Attack aircraft MRO market to increase during the forecast period ....................................................... 119

7      Major Military Aviation MRO Programs ........................................................................... 120
    7.1 Attack Aircraft MRO ......................................................................................................................120
       7.1.1     Tu-160 bombers modernization program ............................................................................................... 120
       7.1.2     MiG-29 .................................................................................................................................................... 121
       7.1.3     B-52 Stratofortress Weapon System Modernization .............................................................................. 122
       7.1.4     Raptor Enhancement Development and Integration program ................................................................ 123
    7.2 Transport Aircraft MRO .................................................................................................................124
       7.2.1     Hercules aircraft maintenance program ................................................................................................. 124
       7.2.2     C-17 Globemaster III integrated sustainment program (GISP) .............................................................. 125
       7.2.3     E-3D AWACS Sentry Whole Life Support Program (WLSP) .................................................................. 126
    7.3 Rotorcraft MRO .............................................................................................................................127
       7.3.1     Merlin Capability Sustainment Program ................................................................................................. 127
       7.3.2     US Air Force contract field teams (CFT) program .................................................................................. 128
       7.3.3     Logistics Support for H-60 Seahawk Helicopters ................................................................................... 129
    7.4 UAV MRO .....................................................................................................................................130
       7.4.1     Maintenance for Sperwer Drones contract ............................................................................................. 130
       7.4.2     Unmanned Aircraft System (UAS) Services III ....................................................................................... 131
       7.4.3     Support for the Predator MQ-1 Aircraft and related Systems................................................................. 132

8      Competitive Landscape and Strategic Insights .............................................................. 133
    8.1 Competitive Landscape overview ..................................................................................................133
       8.1.1     Boeing: Overview .................................................................................................................................... 134
       8.1.2     Boeing: Products and Services .............................................................................................................. 134
       8.1.3     Boeing: Alliances .................................................................................................................................... 134
       8.1.4     Boeing: Recent Contract Wins ............................................................................................................... 135
       8.1.5     Boeing: Financial Analysis ...................................................................................................................... 135
       8.1.6     BAE Systems: Overview ......................................................................................................................... 137
       8.1.7     BAE Systems: Products and Services .................................................................................................... 137
       8.1.8     BAE Systems: Alliances ......................................................................................................................... 137
       8.1.9     BAE Systems: Recent Contract Wins ..................................................................................................... 138




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    www.strategicdefenceintelligence.com                                                     icdreports@progressivedigitalmedia.com
The Global Military Aviation MRO Market 2012–2022

    8.1.10 BAE Systems: Financial Analysis ........................................................................................................... 138
    8.1.11 DynCorp International Inc.: Overview ..................................................................................................... 140
    8.1.12 DynCorp International Inc.: Products and Services ................................................................................ 140
    8.1.13 DynCorp International Inc.: Alliances ..................................................................................................... 140
    8.1.14 DynCorp International Inc.: Recent Contract Wins ................................................................................. 140
    8.1.15 DynCorp International Inc.: Financial Analysis ....................................................................................... 141
    8.1.16 Pratt & Whitney: Overview ...................................................................................................................... 143
    8.1.17 Pratt & Whitney: Products and Services ................................................................................................. 143
    8.1.18 Pratt & Whitney: Alliances ...................................................................................................................... 143
    8.1.19 Pratt & Whitney: Recent Contract Wins.................................................................................................. 143
    8.1.20 Pratt & Whitney: Financial Analysis ........................................................................................................ 144
    8.1.21 Honeywell: overview ............................................................................................................................... 144
    8.1.22 Honeywell: products and services .......................................................................................................... 144
    8.1.23 Honeywell: alliances ............................................................................................................................... 144
    8.1.24 Honeywell International: recent contract wins ........................................................................................ 145
    8.1.25 Honeywell: financial analysis .................................................................................................................. 145
    8.1.26 EADS: Overview ..................................................................................................................................... 147
    8.1.27 EADS: Products and Services ................................................................................................................ 147
    8.1.28 EADS: Alliances ...................................................................................................................................... 147
    8.1.29 EADS: Recent Contract Wins ................................................................................................................. 148
    8.1.30 EADS: Financial Analysis ....................................................................................................................... 148
    8.1.31 Lockheed Martin: Overview .................................................................................................................... 150
    8.1.32 Lockheed Martin: Products and Services ............................................................................................... 150
    8.1.33 Lockheed Martin: Alliances ..................................................................................................................... 151
    8.1.34 Lockheed Martin: Recent Contract Wins ................................................................................................ 151
    8.1.35 Lockheed Martin: Financial Analysis ...................................................................................................... 152
    8.1.36 Saab: Overview ...................................................................................................................................... 153
    8.1.37 Saab: Products and Services ................................................................................................................. 153
    8.1.38 Saab: Alliances ....................................................................................................................................... 154
    8.1.39 Saab: Recent Contract Wins .................................................................................................................. 154
    8.1.40 Saab: Financial Analysis......................................................................................................................... 155
    8.1.41 Thales: Overview .................................................................................................................................... 157
    8.1.42 Thales: Products and Services ............................................................................................................... 157
    8.1.43 Thales: Alliances ..................................................................................................................................... 157
    8.1.44 Thales: Recent Contract Wins ................................................................................................................ 157
    8.1.45 Thales: Financial Analysis ...................................................................................................................... 158
    8.1.46 Northrop Grumman: Overview ................................................................................................................ 159




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  www.strategicdefenceintelligence.com                                                 icdreports@progressivedigitalmedia.com
The Global Military Aviation MRO Market 2012–2022

       8.1.47 Northrop Grumman: Products and Services........................................................................................... 159
       8.1.48 Northrop Grumman: Alliances ................................................................................................................ 160
       8.1.49 Northrop Grumman: Recent Contract Wins............................................................................................ 160
       8.1.50 Northrop Grumman: Financial Analysis .................................................................................................. 160
       8.1.51 General Dynamics: Overview ................................................................................................................. 162
       8.1.52 General Dynamics: Products and Services ............................................................................................ 162
       8.1.53 General Dynamics: Alliances .................................................................................................................. 163
       8.1.54 General Dynamics: Recent Contract Wins ............................................................................................. 163
       8.1.55 General Dynamics: Financial Analysis ................................................................................................... 164
       8.1.56 Raytheon: Overview ............................................................................................................................... 166
       8.1.57 Raytheon: Products and Services .......................................................................................................... 166
       8.1.58 Raytheon: Alliances ................................................................................................................................ 166
       8.1.59 Raytheon: Recent Contract Wins ........................................................................................................... 166
       8.1.60 Raytheon: Financial Analysis ................................................................................................................ 167
       8.1.61 Elbit Systems.: Overview ........................................................................................................................ 169
       8.1.62 Elbit Systems: Products and Services .................................................................................................... 169
       8.1.63 Elbit Systems: Alliances.......................................................................................................................... 169
       8.1.64 Elbit Systems: Recent Contract Wins ..................................................................................................... 169
       8.1.65 Elbit Systems: Financial Analysis ........................................................................................................... 170
       8.1.66 Rolls-Royce: Overview ........................................................................................................................... 172
       8.1.67 Rolls-Royce: Products and Services ...................................................................................................... 172
       8.1.68 Rolls Royce: Alliances ............................................................................................................................ 172
       8.1.69 Rolls Royce: Recent Contract Wins ....................................................................................................... 173
       8.1.70 Rolls Royce: Financial Analysis .............................................................................................................. 173
       8.1.71 Embraer SA: Overview ........................................................................................................................... 175
       8.1.72 Embraer SA: Products and Services ...................................................................................................... 175
       8.1.73 Embraer SA: Alliances ............................................................................................................................ 175
       8.1.74 Embraer SA: Recent Contract Wins ....................................................................................................... 176
       8.1.75 Embraer SA: Financial Analysis ............................................................................................................. 176

9      Appendix ............................................................................................................................ 178
    9.1 Methodology .................................................................................................................................178
    9.2 Contact us ...................................................................................................................................
				
DOCUMENT INFO
Description: "Product Synopsis This report is the result of ICD Research / Strategic Defence Intelligence’s extensive market and company research covering the global military aviation MRO industry. It provides detailed analysis of both historic and forecast global industry values, factors influencing demand, the challenges faced by industry participants, analysis of the leading companies in the industry, and key news. Introduction and Landscape Why was the report written? “The Global Military Aviation MRO Market 2012–2022” offers the reader detailed analysis of the global military aviation MRO market over the next ten years, alongside potential market opportunities to enter the industry, using detailed market size forecasts. What is the current market landscape and what is changing? The global economic slowdown has reduced the defense budgets of most leading spenders in the world, including the US, France, Germany, and the UK. These countries have cut back their spending on various defense sectors such as space, aircraft, and military vehicles. However, these budget cuts have propelled the military aviation MRO industry as countries now prefer to maintain, repair and upgrade their existing fleet instead of buying new equipment. High growth markets such as India and China have been formulating continuous programs to enhance their military aviation MRO sector, with the US too focusing on maintaining their existing fleet. This trend is also evident from the fact that even a small market like Africa is expected to show positive growth during the forecast period. What are the key drivers behind recent market changes? The last decade has witnessed wars in Iraq, Afghanistan, Serbia and Libya which were primarily carried out by aerial attacks. Countries have been relying primarily on air power because it enables them to respond quickly to distant threats while putting relatively few lives at risk. However, this constant use has resulted in rapid aging and wearing out of the military
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