Used Serviceable Material (USM) Market Outlook
The Used Serviceable Material (USM) Market was valued at USD 7.18 billion in 2023 and is projected to grow from USD 7.48 billion in 2024 to USD 10.31 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 4.10% during the forecast period (2024 - 2032). The market growth is driven by an increasing number of retired aircraft and the rising demand for Maintenance, Repair, and Overhaul (MRO) services. Additionally, heightened focus on aviation safety and aircraft modernization programs contributes to the growing demand for USM resources.
USM Market Trends
Increased Use of Used Serviceable Material (USM) Market in Aircraft Maintenance and Repair With rising operational costs due to increased fuel prices, replacing damaged aircraft parts with new ones incurs significant expenses. The USM market offers a cost-effective alternative by providing reconditioned, highly reliable parts. For example, AAR Corporation and Fortress Transportation and Infrastructure Investors signed a deal in 2020 for the modular repair and refurbishment of CFM56-7B and CFM56-5B engines. In 2021, Next Level Aviation partnered with Pratt & Whitney CSA for USM distribution, and Boeing added USM to its service portfolio in 2019. These developments are expected to boost the market CAGR for USM.
High Demand for Commercial Aircraft The high demand for commercial aircraft globally forces the military and aviation industries to maintain fleets with advanced technology and reliable components. The trend of refurbishing existing commercial aircraft is expected to accelerate, creating opportunities for MRO and aviation component suppliers. Upgrades such as new engines, landing gears, radars, and antennas are common, ensuring the availability of key aviation components at lower costs and improved reliability.
USM Market Segment Insights
By Product Type
- Engine: Dominated the market due to the rising demand for wide-body engine parts from MROs. Engine OEMs like General Electric and Pratt & Whitney lead this segment by offering reconditioned parts integrated into customers' engines.
By Provider Type
- Non-OEM: Generated the most revenue. This category includes MRO service companies and specialty component suppliers. Older aircraft, which have been in service for over a decade, often rely on USM to stay operational without the latest technological advancements.
By Aircraft Type
- Wide Body: Generated the most revenue due to the expansion of long-haul travel and the demand for efficient wide-body aircraft like the A350 and B787, replacing older models like the A330ceos and B777s.
Regional Insights
North America
- Dominates the USM market, with the US and Canada being key contributors. Significant investments in infrastructure for commercial and defense USM applications are driving market growth.
Europe
- Holds the second-largest market share due to the presence of numerous aircraft and component manufacturers, MRO providers, and suppliers. The increase in commercial aircraft production and aftermarket MRO services drives market expansion in this region.
Asia-Pacific
- Expected to grow at the fastest CAGR from 2023 to 2032, driven by the expansion of commercial aircraft fleets. Emerging economies like China, Japan, and India contribute significantly to the market growth.
Key Market Players & Competitive Insights
Leading market players are heavily investing in research and development to expand their product lines and enhance market growth. Strategic initiatives such as new product launches, contractual agreements, mergers and acquisitions, and collaborations are common. To remain competitive, USM industry participants focus on manufacturing locally to reduce operational costs and provide cost-effective products.
Key Companies in the USM Market
- Delta TechOps (US)
- Collins Aerospace (US)
- Aviall (US)
Industry Developments
- November 2019: SAFAIR and GE Aviation extended and expanded their TrueChoice Overhaul contract for CFM56-7B engine maintenance, worth over $70 million.
- October 2019: AFI KLM E&M established a specialized business to manage the dismantling of airplanes and use the recovered assets for maintenance operations.
These developments and strategic initiatives underscore the dynamic growth and potential of the USM market in the aviation industry.
On the basis of aircraft type, the market has been segmented into narrow body, wide body, turboprop, and regional. The USM parts are removed from the retired aircraft and fitted into operating or working aircraft. The narrow body segment of the market is expected to register the highest growth rate during the forecast period due to the wide use of USMs from the retired narrow body parts. The wide body segment is expected to be the fastest growing during the forecast period.
Based on provider type, the market has been classified as OEM and non-OEM. The OEM segment is expected to grow at a higher rate and account for the larger share during the forecast period due to rise in preference of OEM suppliers by the airlines and other end users.
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