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
Recent Developments
Nov 14, 2023 - Firms Increase Prices
- Aviation support services modestly raised their prices in the first eight months of 2023 to match rising demand for their services. Labor costs increased, as employment levels were unchanged during the period but average wages for nonsupervisory employees increased significantly.
- Major airlines like American, Delta, Southwest, and United have all set targets of achieving net-zero greenhouse gas emissions by 2050. Many expect to make their biggest gains by switching to sustainable aviation fuel (SAF). SAF firms aim to develop a fuel that can easily swap in for conventional hydrocarbons but is produced with sources like crop waste that emit little to no carbon dioxide on balance. The Inflation Reduction Act is giving SAF a boost with nearly $250 million in competitive grants and tax credits. Demand is high and supplies are minuscule, making SAF upward of four times as expensive as conventional fuel. Fuel is already the biggest or second-biggest expense for most airlines.
- Sustainable aviation fuel production capacity could potentially increase from 25 million gallons now to nearly 2.2 billion gallons by 2026, according to multinational banking and financial services company Rabobank. SAFs are renewable fuels with similar properties to conventional jet fuel but with a smaller carbon footprint. All SAFs currently approved for commercial use have been derived from biological feedstocks. They are approved for blending with conventional jet fuel at rates up to 50%. “For the time being, biofuels are the only viable solution or feedstock for SAFs, and SAFs offer tremendous potential for the industry for the next 20 years,” Rabobank senior analyst Owen Wagner said. Two of the biggest uncertainties regarding SAFs are policy uncertainty and future competition from non-biobased SAF feedstocks, according to Wagner.
- 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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