The Global Military Aviation MRO Market 2012-2022Ss [email protected] John Carpenter House, 7 Carmelite Street, LondonEC4Y 0BS, United Kingdom, Tel: +44 (0)20

Ss

www.strategicdefenceintelligence.com [email protected]

John Carpenter House, 7 Carmelite Street, LondonEC4Y 0BS, United Kingdom, Tel: +44 (0)20 7936 6830

The Global Military Aviation MRO Market

2012-2022

The Global Military MRO Market2012–2022

The Global Military Aviation MRO Market 2012–2022


2

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 .................................. 24

3.2.4 The aviation MRO market in the Asia-Pacific to be driven by spending in China, Australia and India .... 25

3.2.5 Military aviation MRO market in the Middle East to increase during the forecast period ......................... 26

3.2.6 Brazil expected to be the highest spender in the Military Aviation MRO sector in the Latin American

region .................................................................................................................................................................. 27

3.2.7 Military aviation market in Africa expected to increase over the forecast period ..................................... 28

3.3 Military Aviation MRO Sub–Sector Market Size Composition ..........................................................29

3.3.1 Attack Aircraft MRO market to record strong CAGR growth .................................................................... 29

3.3.2 Transport aircraft MRO to account for the second largest segment in this sector ................................... 31

3.3.3 Market for rotor craft MRO to account for the third largest segment in this sector .................................. 32

3.3.4 Market for UAV MRO to register a CAGR of XX% during the forecast period ......................................... 33

3.4 Demand Drivers and Growth Stimulators ........................................................................................34

3.4.1 Aging military aircraft fleet ........................................................................................................................ 34

3.4.2 Technological innovations driving the military MRO market ..................................................................... 34

3.5 Defense Budget Spending Review ..................................................................................................36

3.5.1 European capital expenditure expected to increase during the forecast period ...................................... 36

3.5.2 Asian defense budgets expected to increase at a robust pace ................................................................ 37

3.5.3 North American defense expenditure projected to decline marginally during the forecast period ........... 38

3.5.4 Modernization programs likely to drive defense expenditure in South American countries ..................... 39

3.5.5 Military budgets of African countries expected to increase during the forecast period ............................ 40

3.5.6 Defense budgets of Middle Eastern countries likely to increase during the forecast period .................... 41

3.6 Defense Modernization Review .......................................................................................................42



3

3.6.1 Financial constraints causing delays in European defense modernization programs ............................. 42

3.6.2 Defense budgets of Asian countries likely to be driven by competitive arms acquisitions ....................... 42

3.6.3 Global economic slowdown leading to defense budget cuts in the North American region ..................... 42

3.6.4 Need to replace aging equipment driving South American defense expenditure .................................... 42

3.6.5 Security threats increasing the defense budget of African countries ....................................................... 43

3.6.6 Demand for air defense systems is likely to increase in the Middle East ................................................. 43

4 Industry Trends, Recent Developments and Challenges ................................................ 44

4.1 Technological Developments ..........................................................................................................44

4.1.1 DSTO has developed the C-130J aircraft propeller balancing software .................................................. 44

4.1.2 Snubber technology to result in cost savings in engine repairs ............................................................... 44

4.1.3 An acoustic system developed to monitor the structural integrity in military aircraft ................................ 44

4.2 Market Trends .................................................................................................................................46

4.2.1 Countries outsourcing MRO work ............................................................................................................. 46

4.2.2 Growth in performance based logistics (PBL) contracts .......................................................................... 46

4.2.3 Civil MRO providers crossing over to the military domain ........................................................................ 46

4.3 Industry Consolidation .....................................................................................................................48

4.3.1 Joint programs expected to increase over the forecast period................................................................. 48

4.3.2 Companies are expected to consolidate in the face of global defense budget cuts ................................ 48

4.3.3 Private equity interest growing in the aviation MRO sector ...................................................................... 49

4.4 Key Challenges ...............................................................................................................................50

4.4.1 High taxes hamper indigenous growth in some countries ........................................................................ 50

4.4.2 Lack of skilled personnel .......................................................................................................................... 50

5 SWOT Analysis of the Military Aviation MRO Market ....................................................... 51

5.2 Strengths.........................................................................................................................................52

5.2.1 Military aviation MRO outsourcing by leading defense spending nations driving growth for the sector .. 52

5.2.2 Procurement and modernization initiatives driving the market ................................................................. 52

5.2.3 Force readiness initiatives by major defense spenders are providing impetus for market growth ........... 53

5.3 Weaknesses ...................................................................................................................................54

5.3.1 Lack of domestic MRO capabilities in some countries ............................................................................. 54

5.3.2 Long cycle times often lead to a reduction in military equipment inventories .......................................... 54

5.3.3 Performance based contracts impair profitability for aviation MRO providers ......................................... 55

5.4 Opportunities ...................................................................................................................................56

5.4.1 Many nations currently possess aging fleets of aircraft ............................................................................ 56

5.4.2 Defense budget cuts expected to channel more funds towards the military aviation MRO sector .......... 56

5.5 Threats ............................................................................................................................................57

5.5.1 A large portion of the MRO workload brought under the ambit of government depots in US .................. 57



4

5.5.2 The US and European economic crisis .................................................................................................... 57

6 Country Analysis – Military Aviation MRO Market ........................................................... 58

6.1 United States Market Size and Forecast 2012–2022 .......................................................................59

6.1.1 Attack aircraft MRO expected to account for the largest share of US military aviation MRO expenditure62

6.1.2 Transport Aircraft MRO segment of military aviation MRO expected to constitute the second largest

market share in the US ......................................................................................................................................... 64

6.1.3 Rotorcraft MRO segment to exhibit a CAGR of XX% during the forecast period ..................................... 66

6.2 France Market Size and Forecast 2012–2022 .................................................................................68

6.2.1 Military Aviation MRO market to be attractive in France during the forecast period ................................ 68

6.2.2 Attack aircraft MRO market to be attractive in France during the forecast period ................................... 71

6.2.3 European heavy lift helicopter maintenance contract to drive the rotorcraft MRO market during the

forecast period ...................................................................................................................................................... 72

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 ........................................... 77

6.3.2 Maintenance services for Mi-8 multi-role helicopters to be a major program in Russian rotorcraft MRO

market .................................................................................................................................................................. 78

6.4 The United Kingdom Market Size and Forecast 2012–2022 ............................................................79

6.4.1 Attack aircraft MRO market in the UK to increase during the forecast period .......................................... 82

6.4.2 Transport aircraft MRO market to register robust growth during the forecast period ............................... 83

6.4.3 Integrated Merlin Operational Support (IMOS) contract to be a major program in rotorcraft MRO market

.................................................................................................................................................................. 84

6.5 Saudi Arabia Market Size and Forecast 2012–2022 ........................................................................85

6.5.1 Attack aircraft MRO market expected to increase during the forecast period .......................................... 87

6.5.2 Rotorcraft MRO market to be robust during the forecast period .............................................................. 88

6.6 UAE Market Size and Forecast 2012–2022 .....................................................................................89

6.6.1 Rotorcraft MRO market expected to increase during the forecast period ................................................ 91

6.6.2 Overhaul of C-130J transport aircraft to be a major program in transport aircraft MRO market .............. 92

6.7 Australia Market Size and Forecast 2012–2022 ..............................................................................93

6.7.1 MRO contracts for various fighter aircraft to drive attack MRO expenditure ............................................ 96

6.7.2 Australia to spend US$XX billion on maintaining, repairing and overhauling its fleet of transport aircraft ..

.................................................................................................................................................................. 97

6.8 China Market Size and Forecast 2012–2022 ...................................................................................98

6.8.1 China is expected to invest heavily in attack aircraft MRO to maintain its growing fleet of multi-role

fighters ................................................................................................................................................................ 101

6.8.2 China expected to allocate US$XX billion towards military rotorcraft MRO ........................................... 102

6.9 India Market Size and Forecast 2012–2022 .................................................................................. 103



5

6.9.1 India’s aviation MRO market driven by the significant investment in procuring military fighter aircraft .. 106

6.9.2 India expected to spend US$XX billion on transport aircraft MRO over the forecast period ................. 107

6.10 Brazil Market Size and Forecast 2012–2022 ................................................................................. 108

6.10.1 Rotorcraft MRO expected to be the highest segment of expenditure by Brazil on military aviation MRO ...

................................................................................................................................................................ 110

6.10.2 Transport aircraft MRO segment expected to exhibit a CAGR of XX% during the forecast period ....... 110

6.11 Colombia Market Size and Forecast 2012–2022 ........................................................................... 112

6.11.1 Colombia’s expenditure on transport aircraft MRO to increase at a CAGR of XX% .............................. 114

6.12 South Africa Market Size and Forecast 2012–2022 ....................................................................... 115

6.12.1 Attack aircraft MRO market to increase during the forecast period ....................................................... 117

7 Major Military Aviation MRO Programs ........................................................................... 118

7.1 Attack Aircraft MRO ...................................................................................................................... 118

7.1.1 Tu-160 bombers modernization program ............................................................................................... 118

7.1.2 MiG-29 .................................................................................................................................................... 119

7.1.3 B-52 Stratofortress Weapon System Modernization .............................................................................. 120

7.1.4 Raptor Enhancement Development and Integration program ................................................................ 121

7.2 Transport Aircraft MRO ................................................................................................................. 122

7.2.1 Hercules aircraft maintenance program ................................................................................................. 122

7.2.2 C-17 Globemaster III integrated sustainment program (GISP) .............................................................. 123

7.2.3 E-3D AWACS Sentry Whole Life Support Program (WLSP) .................................................................. 124

7.3 Rotorcraft MRO ............................................................................................................................. 125

7.3.1 Merlin Capability Sustainment Program ................................................................................................. 125

7.3.2 US Air Force contract field teams (CFT) program .................................................................................. 126

7.3.3 Logistics Support for H-60 Seahawk Helicopters ................................................................................... 127

7.4 UAV MRO ..................................................................................................................................... 128

7.4.1 Maintenance for Sperwer Drones contract ............................................................................................. 128

7.4.2 Unmanned Aircraft System (UAS) Services III ....................................................................................... 129

7.4.3 Support for the Predator MQ-1 Aircraft and related Systems................................................................. 130

8 Competitive Landscape and Strategic Insights .............................................................. 131

8.1 Competitive Landscape overview .................................................................................................. 131

8.1.1 Boeing: Overview .................................................................................................................................... 132

8.1.2 Boeing: Products and Services .............................................................................................................. 132

8.1.3 Boeing: Alliances .................................................................................................................................... 132

8.1.4 Boeing: Recent Contract Wins ............................................................................................................... 134

8.1.5 Boeing: Financial Analysis ...................................................................................................................... 134

8.1.6 BAE Systems: Overview ......................................................................................................................... 136



6

8.1.7 BAE Systems: Products and Services .................................................................................................... 136

8.1.8 BAE Systems: Alliances ......................................................................................................................... 136

8.1.9 BAE Systems: Recent Contract Wins ..................................................................................................... 137

8.1.10 BAE Systems: Financial Analysis ........................................................................................................... 137

8.1.11 DynCorp International Inc.: Overview ..................................................................................................... 139

8.1.12 DynCorp International Inc.: Products and Services ................................................................................ 139

8.1.13 DynCorp International Inc.: Alliances ..................................................................................................... 139

8.1.14 DynCorp International Inc.: Recent Contract Wins ................................................................................. 139

8.1.15 DynCorp International Inc.: Financial Analysis ....................................................................................... 140

8.1.16 Pratt & Whitney: Overview ...................................................................................................................... 142

8.1.17 Pratt & Whitney: Products and Services ................................................................................................. 142

8.1.18 Pratt & Whitney: Alliances ...................................................................................................................... 142

8.1.19 Pratt & Whitney: Recent Contract Wins .................................................................................................. 142

8.1.20 Pratt & Whitney: Financial Analysis ........................................................................................................ 143

8.1.21 Honeywell: overview ............................................................................................................................... 143

8.1.22 Honeywell: products and services .......................................................................................................... 143

8.1.23 Honeywell: alliances ............................................................................................................................... 143

8.1.24 Honeywell International: recent contract wins ........................................................................................ 144

8.1.25 Honeywell: financial analysis .................................................................................................................. 144

8.1.26 EADS: Overview ..................................................................................................................................... 146

8.1.27 EADS: Products and Services ................................................................................................................ 146

8.1.28 EADS: Alliances ...................................................................................................................................... 146

8.1.29 EADS: Recent Contract Wins ................................................................................................................. 147

8.1.30 EADS: Financial Analysis ....................................................................................................................... 147

8.1.31 Lockheed Martin: Overview .................................................................................................................... 149

8.1.32 Lockheed Martin: Products and Services ............................................................................................... 149

8.1.33 Lockheed Martin: Alliances ..................................................................................................................... 150

8.1.34 Lockheed Martin: Recent Contract Wins ................................................................................................ 150

8.1.35 Lockheed Martin: Financial Analysis ...................................................................................................... 151

8.1.36 Saab: Overview ...................................................................................................................................... 152

8.1.37 Saab: Products and Services ................................................................................................................. 152

8.1.38 Saab: Alliances ....................................................................................................................................... 153

8.1.39 Saab: Recent Contract Wins .................................................................................................................. 153

8.1.40 Saab: Financial Analysis......................................................................................................................... 154

8.1.41 Thales: Overview .................................................................................................................................... 156

8.1.42 Thales: Products and Services ............................................................................................................... 156

8.1.43 Thales: Alliances ..................................................................................................................................... 156



7

8.1.44 Thales: Recent Contract Wins ................................................................................................................ 156

8.1.45 Thales: Financial Analysis ...................................................................................................................... 157

8.1.46 Northrop Grumman: Overview ................................................................................................................ 158

8.1.47 Northrop Grumman: Products and Services........................................................................................... 158

8.1.48 Northrop Grumman: Alliances ................................................................................................................ 159

8.1.49 Northrop Grumman: Recent Contract Wins............................................................................................ 159

8.1.50 Northrop Grumman: Financial Analysis .................................................................................................. 159

8.1.51 General Dynamics: Overview ................................................................................................................. 161

8.1.52 General Dynamics: Products and Services ............................................................................................ 161

8.1.53 General Dynamics: Alliances .................................................................................................................. 162

8.1.54 General Dynamics: Recent Contract Wins ............................................................................................. 162

8.1.55 General Dynamics: Financial Analysis ................................................................................................... 163

8.1.56 Raytheon: Overview ............................................................................................................................... 165

8.1.57 Raytheon: Products and Services .......................................................................................................... 165

8.1.58 Raytheon: Alliances ................................................................................................................................ 165

8.1.59 Raytheon: Recent Contract Wins ........................................................................................................... 165

8.1.60 Raytheon: Financial Analysis ................................................................................................................ 166

8.1.61 Elbit Systems.: Overview ........................................................................................................................ 168

8.1.62 Elbit Systems: Products and Services .................................................................................................... 168

8.1.63 Elbit Systems: Alliances.......................................................................................................................... 168

8.1.64 Elbit Systems: Recent Contract Wins ..................................................................................................... 168

8.1.65 Elbit Systems: Financial Analysis ........................................................................................................... 169

8.1.66 Rolls-Royce: Overview ........................................................................................................................... 171

8.1.67 Rolls-Royce: Products and Services ...................................................................................................... 171

8.1.68 Rolls Royce: Alliances ............................................................................................................................ 171

8.1.69 Rolls Royce: Recent Contract Wins ....................................................................................................... 172

8.1.70 Rolls Royce: Financial Analysis .............................................................................................................. 172

8.1.71 Embraer SA: Overview ........................................................................................................................... 174

8.1.72 Embraer SA: Products and Services ...................................................................................................... 174

8.1.73 Embraer SA: Alliances ............................................................................................................................ 174

8.1.74 Embraer SA: Recent Contract Wins ....................................................................................................... 175

8.1.75 Embraer SA: Financial Analysis ............................................................................................................. 175

9 Appendix ............................................................................................................................ 177

9.1 Methodology ................................................................................................................................. 177

9.2 Contact us ..................................................................................................................................... 177

9.3 About SDI...................................................................................................................................... 177



8

9.4 Disclaimer ..................................................................................................................................... 177



9

LIST OF FIGURES

Figure 1: Global Military Aviation MRO Market (US$ Billion), 2012–2022 ........................................................................................................... 18 Figure 2: Military Aviation MRO Market Breakdown by Region (%), 2012–2022 ................................................................................................. 21 Figure 3: North American Military Aviation MRO Market (US$ Billion), 2012–2022 ............................................................................................. 22 Figure 4: European Military Aviation MRO Market (US$ Billion), 2012–2022 ...................................................................................................... 24 Figure 5: Asia-Pacific Military Aviation MRO Market (US$ Billion), 2012–2022 ................................................................................................... 25 Figure 6: Middle East Military Aviation MRO Market (US$ Billion), 2012–2022 ................................................................................................... 26 Figure 7: Latin American Military Aviation MRO Market (US$ Million), 2012–2022.............................................................................................. 27 Figure 8: African Military Aviation MRO Market (US$ Million), 2012–2022 .......................................................................................................... 28 Figure 9: Military Aviation MRO Market Breakdown by Segment (%), 2012–2022 .............................................................................................. 30 Figure 10: Attack Aircraft MRO Market Size (US$ Billion), 2012–2022 ............................................................................................................... 30 Figure 11: Transport Aircraft MRO Market Size (US$ Billion), 2012–2022 .......................................................................................................... 31 Figure 12: Rotorcraft MRO Market Size (US$ Billion), 2012–2022 ...................................................................................................................... 32 Figure 13: UAV MRO Market Size (US$ Billion), 2012–2022 .............................................................................................................................. 33 Figure 14: Defense Capital Expenditure of Top Three European Defense Spenders (US$ Billion), 2011–2021 .................................................. 36 Figure 15: Defense Capital Expenditure of Top Three Asian Defense Spenders (US$ Billion), 2011–2021 ....................................................... 37 Figure 16: Defense Capital Expenditure of Top North American Defense Spenders (US$ Billion), 2011–2021 ................................................... 38 Figure 17: Defense Capital Expenditure of Top Three South American Defense Spenders (US$ Billion), 2011–2021 ........................................ 39 Figure 18: Defense Capital Expenditure of Top Three African Countries (US$ Billion), 2011–2021 ................................................................... 40 Figure 19: Defense Capital Expenditure of Top Three Middle Eastern Defense Spenders (US$ Billion), 2011–2021 .......................................... 41 Figure 20: Military Aviation MRO Market in the US (US$ Billion), 2012–2022 ..................................................................................................... 60 Figure 21: Military Aviation MRO Market Split By Category in the US (%), 2012–2022 ....................................................................................... 61 Figure 22: Attack Aircraft MRO Market Size in the US (US$ Billion), 2012–2022 ................................................................................................ 63 Figure 23: Transport Aircraft MRO Market Size in the US (US$ Billion), 2012–2022 ........................................................................................... 65 Figure 24: Rotorcraft MRO Market Size in the US (US$ Billion), 2012–2022....................................................................................................... 67 Figure 25: Military Aviation MRO Market in France (US$ Million), 2012–2022 .................................................................................................... 69 Figure 26: Military Aviation MRO Market Split by Sector in France (%), 2012–2022 ........................................................................................... 70 Figure 27: Attack Aircraft MRO Market Size in France (US$ Million), 2012–2022 ............................................................................................... 71 Figure 28: Rotorcraft MRO Market Size in France (US$ Million), 2012–2022 ...................................................................................................... 72 Figure 29: Transport Aircraft MRO Market Size in France (US$ Million), 2012–2022 .......................................................................................... 73 Figure 30: Military Aircraft MRO Market in Russia (US$ Billion), 2012–2022....................................................................................................... 75 Figure 31: Russian Military Aviation MRO Market Split by Sector (%), 2012–2022 ............................................................................................. 76 Figure 32: Attack Aircraft MRO Market Size in Russia (US$ Billion), 2012–2022 ................................................................................................ 77 Figure 33: Rotorcraft MRO Market Size in Russia (US$ Million), 2012–2022 ...................................................................................................... 78 Figure 34: Military Aviation MRO Market in the UK (US$ Billion), 2012–2022 ..................................................................................................... 80 Figure 35: Military Aviation MRO Market Split by Sector in UK (%), 2012–2022 ................................................................................................. 81 Figure 36: Attack Aircraft MRO Market Size in the UK (US$ Billion), 2012–2022 ................................................................................................ 82 Figure 37: Transport Aircraft MRO Market Size in the UK (US$ Million), 2012–2022 .......................................................................................... 83 Figure 38: Rotorcraft MRO Market Size in the UK (US$ Million), 2012–2022 ...................................................................................................... 84 Figure 39: Military Aviation MRO Market in Saudi Arabia (US$ Million), 2012–2022 ........................................................................................... 86 Figure 40: Attack Aircraft MRO Market Size in Saudi Arabia (US$ Million), 2012–2022 ...................................................................................... 87 Figure 41: Rotorcraft MRO Market Size in Saudi Arabia (US$ Million), 2012–2022............................................................................................. 88 Figure 42: Military Aviation MRO Market in UAE (US$ Million), 2012–2022 ........................................................................................................ 90 Figure 43: Rotorcraft MRO Market Size in UAE (US$ Million), 2012–2022 ......................................................................................................... 91 Figure 44: Transport Aircraft MRO Market Size in UAE (US$ Million), 2012–2022 .............................................................................................. 92 Figure 45: Military Aviation MRO Market in Australia (US$ Million), 2012–2022 .................................................................................................. 94 Figure 46: Military Aviation MRO Market Split by Sector in Australia (%), 2012–2022 ......................................................................................... 95 Figure 47: Attack Aircraft MRO Market Size in Australia (US$ Million), 2012–2022............................................................................................. 96 Figure 48: Transport Aircraft MRO Market Size in Australia (US$ Million), 2012–2022 ....................................................................................... 97 Figure 49: Military Aviation MRO Market in China (US$ Million), 2012–2022 ...................................................................................................... 99 Figure 50: Military Aviation MRO Market Split by Sector in China (%), 2012–2022 ............................................................................................100 Figure 51: Attack Aircraft MRO Market Size in China (US$ Million), 2012–2022 ................................................................................................101 Figure 52: Rotorcraft MRO Market Size in China (US$ Million), 2012–2022 ......................................................................................................102 Figure 53: Military Aviation MRO Market in India (US$ Billion), 2012–2022 .......................................................................................................104 Figure 54: Military Aviation MRO Market Split by Sector in India (%), 2012–2022 ..............................................................................................105



10

Figure 55: Attack Aircraft MRO Market Size in India (US$ Million), 2012–2022 ..................................................................................................106 Figure 56: Transport Aircraft MRO Market Size in India (US$ Million), 2012–2022 ............................................................................................107 Figure 57: Military Aviation MRO Market in Brazil (US$ Million), 2012–2022......................................................................................................109 Figure 58: Rotorcraft MRO Market Size in Brazil (US$ Million), 2012–2022 .......................................................................................................110 Figure 59: Transport Aircraft MRO Market Size in Brazil (US$ Million), 2012–2022 ...........................................................................................111 Figure 60: Military Aviation MRO Market in Colombia (US$ Million), 2012–2022 ...............................................................................................113 Figure 61: Transport Aircraft MRO Market Size in Colombia (US$ Million), 2012–2022 .....................................................................................114 Figure 62: Military Aviation MRO Market in South Africa (US$ Million), 2012–2022 ...........................................................................................116 Figure 63: Attack Aircraft MRO Market Size in South Africa (US$ Million), 2012–2022 ......................................................................................117 Figure 64: Boeing – Revenue Trend Analysis (US$ Billion), 2007–2011 ............................................................................................................134 Figure 65: Boeing – Operating Profit (US$ Million), 2007–2011 .........................................................................................................................135 Figure 66: Boeing – Net Profit Trend Analysis (US$ Million), 2007–2011 ..........................................................................................................135 Figure 67: BAE Systems – Revenue Trend Analysis (GBP Billion), 2007–2011 .................................................................................................137 Figure 68: BAE Systems – Operating Profit (GBP Million), 2007–2011 ..............................................................................................................138 Figure 69: BAE Systems – Net Profit Trend Analysis (GBP Million), 2007–2011 ...............................................................................................138 Figure 70: DynCorp International Inc. – Revenue Trend Analysis (US$ Billion), 2007– 2011 .............................................................................140 Figure 71: DynCorp International Inc. – Operating Profit (US$ Million), 2007–2011 ..........................................................................................141 Figure 72: DynCorp International Inc. – Net Profit Trend Analysis (US$ Million), 2007–2011 ............................................................................141 Figure 73: Honeywell – Revenue Trend Analysis (US$ billion), 2007–2011 .......................................................................................................144 Figure 74: Honeywell – Operating Profit Trend Analysis (US$ billion), 2007–2011.............................................................................................145 Figure 75: Honeywell – Net Profit Trend Analysis (US$ billion), 2007–2011 ......................................................................................................145 Figure 76: EADS – Revenue Trend Analysis (EUR Billion), 2007–2011 .............................................................................................................147 Figure 77: EADS – Operating Profit (EUR Million), 2007–2011 ..........................................................................................................................148 Figure 78: EADS – Net Profit Trend Analysis (EUR Million), 2007–2011 ...........................................................................................................148 Figure 79: Lockheed Martin – Revenue Trend Analysis (US$ Billion), 2007–2011 .............................................................................................151 Figure 80: Lockheed Martin – Operating Profit (US$ Billion), 2007–2011 ...........................................................................................................151 Figure 81: Lockheed Martin – Net Profit Trend Analysis (US$ Billion), 2007–2011 ...........................................................................................152 Figure 82: Saab – Revenue Trend Analysis (SEK Billion), 2007–2011 ..............................................................................................................154 Figure 83: Saab – Operating Profit (SEK Million), 2007–2011............................................................................................................................155 Figure 84: Saab – Net Profit Trend Analysis (SEK Million), 2007–2011 ............................................................................................................155 Figure 85: Thales – Revenue Trend Analysis (EUR Billion), 2007–2011 ............................................................................................................157 Figure 86: Thales – Operating Profit (EUR Million), 2007–2011 .........................................................................................................................157 Figure 87: Thales – Net Profit Trend Analysis (EUR Million), 2007–2011 ..........................................................................................................158 Figure 88: Northrop Grumman – Revenue Trend Analysis (US$ Billion), 2007–2011 .........................................................................................159 Figure 89: Northrop Grumman – Operating Profit (US$ Million), 2007–2011 ......................................................................................................160 Figure 90: Northrop Grumman – Net Profit Trend Analysis (US$ Million), 2006–2010 ......................................................................................160 Figure 91: General Dynamics – Revenue Trend Analysis (US$ Billion), 2007–2011 ..........................................................................................163 Figure 92: General Dynamics – Operating Profit (US$ Million), 2007–2011 .......................................................................................................164 Figure 93: General Dynamics – Net Profit Trend Analysis (US$ Million), 2007–2011 ........................................................................................164 Figure 94: Raytheon – Revenue Trend Analysis (US$ Billion), 2006–2010 ........................................................................................................166 Figure 95: Raytheon – Operating Profit (US$ Million), 2006–2010 .....................................................................................................................167 Figure 96: Raytheon – Net Profit Trend Analysis (US$ Million), 2006–2010 ......................................................................................................167 Figure 97: Elbit Systems – Revenue Trend Analysis (US$ Billion), 2007– 2011 .................................................................................................169 Figure 98: Elbit Systems – Operating Profit (US$ Million), 2007–2011 ..............................................................................................................170 Figure 99: Elbit Systems – Net Profit Trend Analysis (US$ Million), 2007–2011 ...............................................................................................170 Figure 100: Rolls-Royce – Revenue Trend Analysis (GBP Billion), 2007–2011 .................................................................................................172 Figure 101: Rolls Royce – Operating Profit (GBP Million), 2007–2011 ...............................................................................................................173 Figure 102: Rolls Royce – Net Profit Trend Analysis (GBP Million), 2007–2011 ...............................................................................................173 Figure 103: Embraer SA – Revenue Trend Analysis (US$ Billion), 2007–2011 ..................................................................................................175 Figure 104: Embraer SA – Operating Profit (US$ Million), 2007–2011 ...............................................................................................................176 Figure 105: Embraer SA – Net Profit Trend Analysis (US$ Million), 2007–2011 ................................................................................................176



11

LIST OF TABLES

Table 1: Global Military Aviation MRO Market Overview ..................................................................................................................................... 20 Table 2: Global Military Aviation MRO Market Overview ..................................................................................................................................... 29 Table 3: SWOT Analysis of the Military Aviation MRO Market ............................................................................................................................ 51 Table 4: US Military Aviation MRO Market Overview .......................................................................................................................................... 59 Table 5: Key Military Aviation MRO Programs .................................................................................................................................................... 60 Table 6: French Military Aviation MRO Market Overview .................................................................................................................................... 68 Table 7: Major French Military Aviation MRO Programs...................................................................................................................................... 69 Table 8: Russian Military MRO Market Overview ................................................................................................................................................ 74 Table 9: Major Russian Military Aircraft MRO Programs ..................................................................................................................................... 75 Table 10: UK Military Aviation MRO Market Overview ........................................................................................................................................ 79 Table 11: Major UK Military Aviation MRO Programs .......................................................................................................................................... 80 Table 12: Saudi Arabia’s Military Aviation MRO Market Overview....................................................................................................................... 85 Table 13: Major Military Aviation MRO Programs of Saudi Arabia ...................................................................................................................... 86 Table 14: UAE’s Military Aviation MRO Market Overview ................................................................................................................................... 89 Table 15: Major Military Aviation MRO Programs of UAE ................................................................................................................................... 90 Table 16: Australian Military Aviation MRO Market Overview.............................................................................................................................. 93 Table 17: Key Aviation MRO Programs .............................................................................................................................................................. 94 Table 18: Chinese Military Aviation MRO Market Overview ................................................................................................................................ 98 Table 19: Main Chinese Military Aviation MRO Programs ................................................................................................................................... 99 Table 20: Indian Military Aviation MRO Market Overview ...................................................................................................................................103 Table 21: Key Indian Military Aviation MRO Programs .......................................................................................................................................104 Table 22: Brazilian Military Aviation MRO Market Overview ...............................................................................................................................108 Table 23: Key Brazilian Military Aviation MRO Programs ...................................................................................................................................109 Table 24: Military Aviation MRO Market Overview of Colombia .........................................................................................................................112 Table 25: South African Military Aviation MRO Market Overview .......................................................................................................................115 Table 26: Program Details – Tu-160 Bombers Modernization Program .............................................................................................................118 Table 27: Program Details – MiG-29 Upgrade Program .....................................................................................................................................119 Table 28: Program Details – B-52 Stratofortress Weapon System Modernization Program ...............................................................................120 Table 29: Program Details – Raptor Enhancement Development and Integration program ................................................................................121 Table 30: Program Details – Hercules aircraft maintenance program ................................................................................................................122 Table 31: Program Details – C-17 Globemaster III integrated sustainment program (GISP) ..............................................................................123 Table 32: Program Details – E-3D AWACS Sentry Whole Life Support Program ...............................................................................................124 Table 33: Program Details – Merlin Capability Sustainment Program ................................................................................................................125 Table 34: Program Details – US Air Force contract field teams (CFT) program .................................................................................................126 Table 35: Program Details – Logistics Support program or H-60 Seahawk Helicopters .....................................................................................127 Table 36: Program Details – Maintenance for Sperwer Drones contract ............................................................................................................128 Table 37: Program Details – Unmanned Aircraft System (UAS) Services III ......................................................................................................129 Table 38: Program Details –Support for the Predator MQ-1 Aircraft and related Systems ..................................................................................130 Table 39: Boeing – Alliances .............................................................................................................................................................................132 Table 40: Boeing – Recent Contract Wins .........................................................................................................................................................134 Table 41: BAE Systems – Alliances ...................................................................................................................................................................136 Table 42: BAE Systems – Recent Contract Wins ...............................................................................................................................................137 Table 43: DynCorp International Inc. – Alliances ..............................................................................................................................................139 Table 44: DynCorp International Inc. – Recent Contract Wins ...........................................................................................................................139 Table 45: Pratt & Whitney – Alliances ................................................................................................................................................................142 Table 46: Pratt & Whitney – Recent Contract Wins ............................................................................................................................................142 Table 47: Honeywell – Alliances ........................................................................................................................................................................143 Table 48: Honeywell – Recent Contract Wins ....................................................................................................................................................144 Table 49: EADS – Alliances ...............................................................................................................................................................................146 Table 50: EADS – Recent Contract Wins ...........................................................................................................................................................147 Table 51: Lockheed Martin – Alliances ..............................................................................................................................................................150 Table 52: Lockheed Martin – Recent Contract Wins ..........................................................................................................................................150 Table 53: Saab – Alliances ................................................................................................................................................................................153 Table 54: Saab – Recent Contract Wins ............................................................................................................................................................153



12

Table 55: Thales – Recent Contract Wins..........................................................................................................................................................156 Table 56: Northrop Grumman – Alliances ..........................................................................................................................................................159 Table 57: Northrop Grumman – Recent Contract Wins ......................................................................................................................................159 Table 58: General Dynamics – Alliances ...........................................................................................................................................................162 Table 59: General Dynamics – Recent Contract Wins .......................................................................................................................................162 Table 60: Raytheon – Recent Contract Wins .....................................................................................................................................................165 Table 61: Elbit Systems – Recent Contract Wins ...............................................................................................................................................168 Table 62: Rolls Royce – Alliances .....................................................................................................................................................................171 Table 63: Rolls Royce – Recent Contract Wins .................................................................................................................................................172 Table 64: Embraer SA – Alliances .....................................................................................................................................................................174 Table 65: Embraer SA – Recent Contract Wins .................................................................................................................................................175



13

1 Executive Summary

The global military aviation MRO market is expected to increase at a CAGR of XX% during the forecast

period

The value of the global military aviation MRO market is estimated at US$XX billion in 2012 and is expected to

value US$XX billion by 2022, representing a CAGR of XX% during the forecast period. The demand for

military aviation MRO services is anticipated to be driven by aging military equipment globally, technological

innovations in the industry, internal and external security threats, territorial disputes and modernization

initiatives undertaken by armed forces across the world. Cumulatively, the global market for military aviation

MRO is projected to value US$XX billion during the forecast period and is expected to be dominated by North

America, followed by Europe and Asia Pacific. Despite the economic crisis in the Eurozone, Europe’s share of

the global market is projected to increase during the forecast period, albeit marginally due to the scheduled

deployment of various modernization programs which had been initiated in previous years.

In terms of categories, the attack aircraft MRO market is expected to account for the highest proportion of

spending, followed by markets for transport aircraft MRO, rotorcraft MRO and UAV MRO. The market for

attack aircraft MRO is anticipated to be bigger than other categories because of the increasing age of the

global military fighter aircraft fleet. Furthermore, in the face of global budget cuts, defense departments around

the world are now looking to terminate various new military aircraft programs and are instead focusing on

maintaining, repairing and overhauling their existing fleet.



14

2 Global Military Aviation MRO Market Size and Drivers

2.1 Military Aviation MRO Market Size and Forecast 2012–2022

2.1.1 Global military aviation MRO market to show positive growth during the forecast period

The global military aviation MRO market is estimated to value US$XX billion in 2012 and increase at a CAGR

of XX% during the forecast period to reach its peak of US$XX billion by 2022. The market consists of four

military aviation MRO activities categories: attack aircraft MRO, transport aircraft MRO, rotorcraft MRO and

UAV MRO. The attack aircraft MRO market is expected to account for XX% of the global military aviation MRO

market, followed by transport aircraft MRO with a share of XX% and rotorcraft MRO with XX% share. The UAV

MRO market accounts for the remaining XX% share. During the forecast period, cumulative global expenditure

on military aviation MRO is expected to reach US$XX billion.

The chart below shows the expected military aviation MRO market value during 2012–2022:

Figure 1: Global Military Aviation MRO Market (US$ Billion), 2012–2022

Source: SDI analysis © SDI

XX

XX

XX

XX

XX

XX

XX

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

US

$ B

illi

on

2022



15

2.2 Global Military Aviation MRO Market – Regional Analysis

2.2.1 North America dominates the global military aviation MRO market

North America accounts for the highest spend in the global military aviation MRO market and most of the

expenditure can be attributed to the US, with Canada accounting for a small share. As the US has been

engaged in continuous military operations in Afghanistan and Iraq along with Canadian forces, a significant

number of their aircraft have undergone wear and tear. Furthermore, most of the country’s active fleet is likely

to reach the end of its life-cycle over the next three to four years. This will warrant significant MRO

investments in the country’s aging airborne systems, such as its KC-135 tankers (44 years old) and UH-1

Huey helicopters (35 years old), among others. The recent US defense budget cuts are not expected to have

a significant impact on military aviation MRO spending as the US Department of Defense (DoD) is committed

to maintaining readiness and the performance of its active fleet which in turn necessitates focus on increasing

service lives of older aircraft that are deployed in the battlefield. However, due to persisting factors such as an

aging fleet, modernization initiatives, supplier consolidation and outsourcing limitations, there is anticipation of

a slight reduction in military MRO budgets.

The table below gives a brief overview of the global military aviation MRO market:

Table 1: Global Military Aviation MRO Market Overview

Region Market in 2012 Market in 2022 Total Market (2012–2022)

Annualized growth/decline

(2012–2022)

North America US$XX billion US$XX billion US$XX billion XX%

Asia-Pacific US$XX billion US$XX billion US$XX billion XX%

Europe US$XX billion US$XX billion US$XX billion XX%

Middle East US$XX billion US$XX billion US$XX billion XX%

Africa US$XX million US$XX million US$XX billion XX%

Latin America US$XX million US$XX million US$XX billion XX%

Total Military Aviation MRO Market US$XX billion US$XX billion US$XX billion XX%




16

2.3 Military Aviation MRO Sub–Sector Market Size Composition

2.3.1 Attack Aircraft MRO market to record strong CAGR growth

Attack Aircraft MRO has emerged as the category which is expected to witness maximum global spending in

the military MRO market. Globally, military tensions are on the rise between US-China, Israel-Iran, India-

Pakistan, China-Taiwan, India-China, and Chile-Peru. In such a scenario, major defense spenders including

the US, China, and South Korea are committed to maintaining readiness and performance of their active fleets

which in turn necessitates focus upon increasing service lives of older aircraft. Furthermore, as a result of

recent conflicts and operations in Afghanistan and the Middle East, armed forces of the coalition allies are

being encouraged to move towards life-cycle extension programs around a number of aircraft platforms that

are considered to be of strategic importance. The aviation MRO sub sector is also being driven by the focus of

procurement agencies of major defense spending nations on adopting a through-life approach to programs

covering both aircraft acquisition and in-service support cost reductions. For example, the US DoD and a

number of European MoDs are anticipated to bring together their MRO requirements, procurement and

logistics functions into single procurement teams. The major programs in this category include France’s

modernization of Rafale Marine Fighters, Bulgaria’s upgrade of their Mig-29 fighter fleet, Russia’s

modernization of MiG-31 interceptors to the MiG-31BM version and US’ B-52 Stratofortress Weapon System

modernization program.

The attack aircraft MRO market is expected to register a strong CAGR growth of XX% during the forecast

period and account for XX% of the global military MRO market, while transport aircraft MRO and rotorcraft

MRO are expected to constitute XX% and XX% respectively. The UAV MRO market is expected to have a

relatively low share of XX%.

The table below gives a brief overview of the global military aviation MRO market:

Table 2: Global Military Aviation MRO Market Overview

Category Market in 2012 Market in 2022 Total Market (2012–2022)

Annualized growth/decline

(2012–2022)

Attack Aircraft MRO US$XX billion US$XX billion US$XX billion XX%

Transport Aircraft MRO US$XX billion US$XX billion US$XX billion XX%

Rotorcraft MRO US$XX billion US$XX billion US$XX billion XX%

UAV MRO US$XX million US$XX billion US$XX billion XX%

Total Military Aviation MRO Market US$XX billion US$XX billion US$XX billion XX%


Documents

The Global Military Aviation MRO Market 2012-2022Ss [email protected] John Carpenter House, 7 Carmelite Street, LondonEC4Y 0BS, United Kingdom, Tel: +44 (0)20