Shortages and high costs loom over growing aviation maintenance sector: Oliver Wyman

Recent rapid growth in the global aviation maintenance, repair, and overhaul (MRO) market is being fueled by higher rates, but there are concerns around this emerging supply chain paradigm, which is marked by more materials shortages, higher costs, and poorer overall performance.

The latest annual MRO survey from Oliver Wyman, which gathered insights from more than 150 aviation industry professionals, reveals that the market exceeded $136 billion in 2025. Experts project that this spending will rise to nearly $140 billion this year, driven by what is described as an extended maintenance ‘super cycle’. This surge stems from an aging aircraft fleet requiring more frequent repairs, alongside unexpected durability issues on next-generation engine platforms.

When asked about the top disruptors facing the industry, respondents have pointed to labor shortages, material shortages, geopolitical instability, and tariffs. Many also noted the disruption caused by the adoption of AI and changes in fleet strategies. This year’s findings did, however, show industry players are less concerned about general inflation and economic slowdown.

This development mirrors a broader trend seen across various global shipping lanes. A freight super cycle refers to an extended period where maritime shipping rates remain above long-term averages due to converging factors like surging demand and restricted vessel supply.

In the context of the global metals industry, freight super cycles often stem from accelerated steel consumption or trade expansion, coupled with supply-side bottlenecks. This environment not only shifts freight cost structures but also fundamentally alters supply chain risk, contract negotiations, and metals market economics.

Looking back at historical context, these dynamics became highly evident during the early 2000s. Driven by urbanization and infrastructure investment in China, iron ore and coal cargoes spiked by more than 400% between 2000 and 2008.

Although such super cycles do not last forever, their consequences shake up shipbuilding, steel pricing, and trade flows for decades. Today, the global economy faces a similarly complex backdrop where post-pandemic recoveries, evolving environmental regulations, and geopolitics interact in ways reminiscent of past super cycles.

Labor shortages

The various pressures of the current super cycle on the MRO industry have been compounded by severe labor shortages. Research forecasts a massive shortfall of 17,800 certified mechanics in the U.S. alone for 2025, a deficit expected to expand to 22,000 by 2027.

This supply-demand imbalance has accelerated wage inflation, with average maintenance labor rates settling into a persistent annual growth rate of 5.5% to 6.0%. This is roughly double the pre-pandemic inflation baseline of approximately 3%. Compounding the problem, more than 40% of companies report a noticeable increase in direct labor attrition over the past year.

All regions surveyed saw engine labor rate growth outpace other categories, with the highest rate increases in Europe (7.4%) and rest of world (8.3%), compared to a 6.4% increase for North America. Europe continues to expect higher labor rate increases in 2026 compared to North America.

The role of technology and AI

To combat these systemic supply chain bottlenecks and labor deficits, industry executives are increasingly leaning on advanced technology. The survey notes that 67% of aviation maintenance organizations have initiated AI deployments, using these tools to optimize material management and analyze engineering reliability.

Despite high enthusiasm, scaling these tools remains a slow process, with 58% of organizations remaining locked in the experimental pilot phase. Analysts observe that a lack of data quality and the prevalence of legacy systems act as significant barriers. However, the long-term outlook remains ambitious, as 75% of respondents anticipate that AI will integrate across most of their operational activities within the next five years.

In terms of where the aviation maintenance industry is applying AI, this year’s survey found a broadening of use cases, with nearly 20 different applications identified by respondents. The top areas for applying AI tools were materials management and, more specifically among operators, in running engineering reliability analyses and airframe planning.

The challenges companies are facing in scaling AI – particularly a lack of data quality and availability – may be one reason we are seeing a stall-out at the experimental level. For most companies, a huge amount of operational data still resides in legacy systems, scanned documents, or paper records, which means it is a major task to digitize, standardize, and integrate datasets before AI models can be deployed at scale.

To ensure long-term stability, aviation leaders must now shift their focus from reactive troubleshooting to building resilient, standardized data ecosystems that can support advanced operations, according to Oliver Wyman.

Successfully breaking through current technological bottlenecks will allow the industry to turn these persistent labor and material constraints into opportunities for automated efficiency. Ultimately, those who master this operational evolution will redefine competitive boundaries, successfully insulating their fleets from the unpredictable macro-economic pressures of the coming decade.