Engine maintenance activity continues to increase as airlines ramp up flying and return more aircraft to service in response to rising passenger demand, with both fourth-quarter (Q4) 2021 and early 2022 figures from some key stakeholders highlighting continued recovery.
“Despite some of the hiccups that we saw in airline scheduling and some of the challenges that we saw in December and January with the airlines, aftermarket continues to recover,” Raytheon Technologies President and CEO Greg Hayes said at a recent Barclays investor conference. “We’re halfway through February. So I’ve only really seen the final January numbers. They would support this recovery trajectory that we had assumed back at the end of the year.”
Raytheon’s Pratt & Whitney unit saw aftermarket revenue jump 17% in Q4 2021 compared to the previous quarter. While end-of-year spares stocking helped drive some business, executives say the larger factor is an overall increase in demand—a trend they expect to continue throughout 2022.
“We’re talking to the airlines,” Hayes said. “They need parts, they need to get engines back into our shops. They need the repair activity to continue, and we’re busy, which is good.”
CFM International partner Safran, which like Pratt is benefiting from having narrowbody flying lead the global recovery, delivered similarly encouraging data points during a Feb. 24 earnings call. Civil aftermarket revenue, which includes business aviation as well as airline activity, jumped 32% sequentially in Q4.
“Our baseline scenario is an increase of narrowbody [available seat kilometers] in the 35% to 40% range compared to 2021,” CEO Olivier Andries said. “This will drive an increase in civil aftermarket revenue in the range of 25% to 30% compared to 2021. On spare parts, number of shop visits, in terms of volume, we would expect good growth more or less in line with the growth in traffic, meaning in the mid-30s.”
MTU Aero Engines’ overhaul shops are “fully booked” in 2022, CEO Reiner Winkler said on an earnings call earlier in February, while CFO Peter Kameritsch added that workscopes are on the rise.
“In the middle of the crisis, airlines really tried to push out shop visits, and the shop visits from a scope perspective [were] quite small—really only minimum shop visits to keep the engine flying, but not more,” Kameritsch said. “Now we see that the scope of the shop is also increased [to] full- and heavy-shop visits.”
Reaching pre-downturn aftermarket activity depends on a turnaround in widebody flying activity. Rolls-Royce, the engine manufacturer with the largest widebody market exposure, posted a year-over-year increase in services revenue in 2021, the company said Feb. 24. But its £2.9 billion ($3.9 billion) top-line services total was still 15% short of 2019’s total.
Engine inductions totaled 610 in 2021—the company’s lowest level since 2017. Just 208 of those were high-value major overhauls, while the remaining 402 were “check-and-repair” visits. The figures are, respectively, 33% and 39% declines from 2019’s comparable figures of 306 heavy visits and 660 lighter checks.
“Fewer large engines were required to fulfill customer build schedules, but sales of spare engines increased,” the company said of its 2021 figures.
As pent-up demand for long-haul service translates into more flying, aftermarket activity should follow suit. For Rolls, that translates into a projected total of 400 heavy shop visits in 2022.
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