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 4,300 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 51 workers and generates $7-8 million annually.

    • The US aviation support services industry consists of about 4,300 firms that employ 230,200 workers and generate over $32 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

                                May 5, 2023 - Air Travel Demand Slips
                                • Air travel demand decreased for the second consecutive month in March, registering 2% below 2019 levels for the period, according to the US Travel Association. Overseas arrivals improved to its best post-pandemic level in March to 25% below 2019 levels. The positive trend in overseas arrivals may continue, as The Centers for Disease Control and Prevention announced in April that will consider anyone who has received a single dose of an mRNA COVID-19 vaccine on or after August 16, 2022, to meet the requirements for boarding an airplane heading to the US.
                                • House aviation subcommittee chair Garret Graves has stressed the importance of addressing the many challenges that the general aviation community is facing in the next Federal Aviation Administration reauthorization bill to ensure it is on sound footing. Graves noted issues such as difficulty in obtaining airport funding and preparation for the emergence of advanced air mobility. Aircraft Owners and Pilots Association president Mark Baker expressed concerns about a lack of hangar space, citing a 2021 survey of 800 airports that found 71% have a shortage of individual general aviation hangar space. Noting difficulties in obtaining Airport Improvement Program (AIP) funding for such programs, he reported that 55% of airports surveyed said they have the land to develop the hangars but not the resources.
                                • Global refiners may have difficulty meeting sharply rising jet fuel demand this year, with increased capacity falling short of the expected growth in demand and most new plants starting up too late for the summer season, according to New Energy Intelligence. New refining capacity will be partly offset by an expected reduction of supply from Russia. Net additions will yield around 535,000 barrels per day (b/d) more middle distillates, less than the expected 717,000 b/d in jet fuel demand growth this year. Jet fuel supplies are expected to increase during the year as more secondary and upgrading units come on stream. Up to 2.5 million b/d of new refining capacity is due on line by the end of the year, most of it in Asia-Pacific and the Mideast. The bulk won’t reach full production until the fourth quarter, however, too late for peak summer airline fuel demand.
                                • 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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