Used Serviceable Material (USM) Market: 2024-2032
The global Used Serviceable Material (USM) market has seen significant growth in recent years, with its market size valued at USD 7.1829 billion in 2023. Projections indicate that the market will grow from USD 7.477 billion in 2024 to USD 10.312 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 4.10% during the forecast period. This growth is driven primarily by the increasing number of retired aircraft and the growing demand for Maintenance, Repair, and Overhaul (MRO) services, coupled with a heightened focus on aviation safety and aircraft modernization.
Market Drivers and Trends
The USM market is experiencing a surge due to several key factors. One of the primary drivers is the cost-effectiveness and efficiency that USM offers for aircraft maintenance and repair. As the cost of aircraft operations continues to rise, driven largely by increasing fuel prices, airlines and operators are seeking more economical ways to maintain their fleets. Replacing damaged parts with new components is a costly endeavor. In contrast, USM provides reconditioned, highly reliable parts at a fraction of the cost, which is significantly contributing to market growth.
Rising Demand for USM
USM's appeal lies in its ability to offer substantial cost savings without compromising on reliability or safety. The industry has witnessed significant partnerships and agreements that highlight the growing importance of USM. For instance, in 2020, AAR Corporation and Fortress Transportation and Infrastructure Investors announced a deal focusing on the modular repair and refurbishment of CFM56-7B and CFM56-5B engines. Similarly, in 2021, Next Level Aviation partnered with Pratt Whitney CSA to distribute USM. Boeing also expanded its service portfolio to include the USM business sector in 2019. These developments indicate a growing trend in the use of USM for aircraft maintenance, which is expected to drive the market's CAGR.
Market Insights by Product Type
The USM market is segmented based on product type into engines, components, and airframes. The engine segment dominates the market due to the high demand for wide-body engine parts from MROs. Engine Original Equipment Manufacturers (OEMs) like General Electric and Pratt Whitney have a significant presence in the market, providing cost-effective solutions by acquiring parts and integrating them into customer engines, ensuring lower costs compared to newer engines.
Insights by Provider Type
The market is also segmented by provider type into OEM and non-OEM categories. The non-OEM category, which includes MRO service companies and specialty component suppliers, generates the most income. Non-OEMs cater to older aircraft fleets that have been in service for over a decade, providing essential components and parts that help extend the operational life of these aircraft. This segment is crucial as it supports the longevity and continued serviceability of older aircraft without the latest technological advancements.
Market Insights by Aircraft Type
The market segmentation by aircraft type includes narrow-body, wide-body, and turboprop aircraft. The wide-body segment generates the most revenue, driven by the gradual expansion of long-haul travel and the demand for more efficient wide-body aircraft programs like the A350 and B787, which are replacing older models such as the A330ceos and B777s. Airlines are increasingly focusing on reducing material costs as air traffic continues to grow, further driving demand for USM.
Regional Market Insights
North America
North America is expected to dominate the USM market, with the United States and Canada being the key contributors. The US government is making significant investments in infrastructure for USM applications in both commercial and defense sectors, aiming to improve operational efficiency, reduce operational times, and mitigate risk factors. This region's market growth is further bolstered by the increased number of aircraft and aftermarket parts, ensuring a steady supply and demand for USM.
Europe
Europe holds the second-largest market share in the USM industry, attributed to the presence of numerous aircraft manufacturers, component suppliers, and MRO providers. The region's growth is driven by the rise in commercial aircraft production and the expansion of aftermarket MRO services for aircraft. Germany and the UK are leading the market in Europe, with Germany holding the largest market share and the UK being the fastest-growing market in the region.
Asia-Pacific
The Asia-Pacific region is anticipated to grow at the fastest CAGR from 2024 to 2032, primarily due to the rapid expansion of commercial airplane fleets. Emerging economies in Asia have experienced significant fleet growth, positioning the region as a key player in the global USM market. Countries like China, Japan, and India are major contributors to this growth, driven by increased demand for cost-effective maintenance solutions and a growing awareness of the benefits of USM.
Key Market Players and Competitive Insights
The USM market is characterized by significant investments in research and development by Used Serviceable Material (USM) market companies players, aiming to expand their product lines and global presence. Major companies in the USM market include Delta TechOps, Collins Aerospace, and Aviall. These companies are actively engaging in strategic activities such as mergers, acquisitions, new product launches, and collaborations to enhance their market position and meet the growing demand for USM.
Delta TechOps
Delta TechOps, the MRO division of Delta Air Lines, operates from its headquarters at Atlanta's Hartsfield-Jackson International Airport. With over 9,600 employees and 51 maintenance stations worldwide, Delta TechOps services Delta's fleet of more than 900 aircraft and provides MRO solutions to over 150 third-party operators globally. It is the second-largest MRO provider in North America and the seventh-largest worldwide.
Collins Aerospace
Collins Aerospace, a division of Raytheon Technologies Corp., offers a wide range of aerospace and defense products, including displays, information management systems, flight control, and electrical products. The company also provides services such as maintenance, repairs, components, and post-purchase support. Collins Aerospace was formed from the merger of UTC Aerospace Systems and Rockwell Collins, making it a major player in the aerospace and defense industry.
Industry Developments and Future Outlook
The USM market is poised for significant growth and development over the forecast period, driven by the increasing adoption of cost-effective and reliable maintenance solutions for aircraft. Key industry developments include strategic partnerships, acquisitions, and new product launches that highlight the market's dynamic nature and its potential for future growth.
In summary, the Used Serviceable Material (USM) market is experiencing robust growth, driven by the need for cost-effective and efficient maintenance solutions in the aviation industry. With significant investments from key players and a growing demand for reliable aircraft components, the USM market is set to expand significantly from 2024 to 2032
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