Aviation Support Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,200 aviation support services in the US provide airport operation, repair, maintenance, storage and ferrying services. Primary services offered include maintenance and repair; fixed base operators (FBO) services; airport administration and operation service; and handling services for goods (cargo, baggage). Other services include air traffic control, runway services (cleaning, snow removal), de-icing, and parts inventory management services.

Regulated Environment

The US aviation industry is heavily regulated by the Federal Aviation Administration (FAA) which sets the standards for repair and operation of all aircraft and parts.

Advances in Technology

Advances in technology have fundamentally changed the need for maintenance, repair and overhaul services.

Industry size & Structure

The average US aviation support services provider employs about 48 workers and generates $6-7 million annually.

    • The US aviation support services industry consists of about 4,200 firms that employ 206,600 workers and generate over $29 billion annually.
    • The industry is moderately concentrated at the top and fragmented at the bottom; the top 50 companies account for about 57% of industry revenue.
    • Large MRO firms include AAR and Aviation Technical Services (ATS). Foreign firms, such as HAECO, offer aviation support services through domestic subsidiaries and joint ventures.
    • The top 100 US aviation markets typically contract with a chain fixed base operator (FBO), such as Signature Flight Support and Atlantic Aviation.
                                Industry Forecast
                                Aviation Support Services Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Dec 3, 2022 - Routes More Likely To Be Eliminated At Smaller Airports
                                • Small-market airports have experienced the majority of schedule cutbacks since the beginning of the coronavirus pandemic, with some losing commercial service entirely. Of the 430 airports in the continental US and Hawaii that offered commercial passenger service before the pandemic, 76% had fewer flights scheduled in 2022 than in 2019, according to the Regional Airline Association. Smaller airports lost an average of 34% of their flight traffic while larger airports’ schedules shrank an average of 16%. Changing route economics have disproportionately affect regional flights, said Brett Catlin, of Alaska Airlines. The pilot shortage that arose during the pandemic has boosted salaries, especially among regional-carrier pilots, he said, making those flights more expensive. Smaller planes are also less efficient. A 500-mile flight in a regional jet that holds an average of 76 passengers uses about 30% more fuel per passenger than the typical mainline jet, which carries an average of 159 passengers.
                                • Travel remains strong ahead of the holidays, according to executives at hotel chains, cruise-line operators, vacation-booking platforms, and other leisure companies. Executives said in recent earnings reports that the desire to spend on experiences is overcoming concerns about inflation and the economy. Royal Caribbean Group said 2023 cruise bookings made from July through September doubled from the prior quarter. NBCUniversal’s theme parks are packed. “It kind of defies logic a little bit,” said Jeff Shell, CEO at NBCUniversal. “People at the beginning of the pandemic were spending unlimited amounts on home improvement, on Pelotons, you name it, and the bloom is off that rose entirely,” Hyatt Hotels CEO Mark Hoplamazian said. “What they’re now spending on is experiences.”
                                • Airports are struggling with high demand as pandemic-related problems continue. "Too many employees and resources are still unavailable, not only at our infrastructure partners but in some of our own areas, too," officials at German airline Lufthansa said in late June. Experts say that in almost every case, the problem is that too many experienced people were let go during the pandemic, and that airlines, airports, and other key parts of the aviation system have not hired and qualified enough people to replace them. "Between their own research, research that my company and others have conducted, and their reservations systems, airline executives should have seen -- and thus should have known -- that there would be strong demand to travel again," said Henry Harteveldt, principal at market research and advisory firm Atmosphere Research.
                                • Aviation support services are among the firms struggling to maintain adequate staff. The shortage could be costing the industry $2 billion dollars per year, according to the Aeronautical Repair Station Association. "Whether it's cargo, whether it's the airlines, whether it's corporate aviation or military, there is just so much demand and not enough people to meet it right now," said James Smith, Director of Aviation Maintenance Technology at Marshall University.
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