Fri, Apr 18, 2003
SAI Forecast Says Decline of 4.5% Expected
Worldwide aviation maintenance, repair and overhaul (MRO)
activity in 2003 will decline at least 4.5% versus last year based
on a forecast just released by SAI -- Strand Associates.
The industry
was a $42 billion business as recently as two years ago. This year
it will barely make the $36 billion level and could drop to below
$34 billion if world travel uncertainties do not improve. Bruce
Strand, SAI CEO, in his opening day presentation at McGraw - Hill's
annual North American MRO Conference today cautioned that any
worsening of geopolitical events beyond the war in Iraq, SARS
threat or new terrorist event could "literally tear the bottom out
of this important segment of the airline industry."
"Airline restructuring, in or out of bankruptcy, is driving more
MRO activity to lower cost non-airline vendors who specialize in
MRO activity," according to Strand. "A decade ago, one third of
world MRO activity was performed by more efficient specialist
vendors. The split now stands at 50% airline and 50% MRO
vendors."
SAI forecasts that North American MRO activity will experience
modest growth over the next 10 years of between 2 and 3% depending
upon the strength of the North American economy. Worldwide, annual
growth will follow a 3% to 5% pace.
At the Latin American special session of the MRO Conference,
Bill Bottoms, SAI Principal and Vice President, predicted that the
outlook for Latin America is better than that for North America.
According to Bottoms, "Latin America will experience expansion of
its share of the world market from 5.0% in 2003 to 6.2% in 2013,
reflecting a 5 to 6% annual growth rate."
(SAI is a Denver-based company specializing in strategic and
technical aviation operations and financial consulting, as well as
engineering support services and retained executive searches.)
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