"Maintenance shops are steadily increasing capacity in the US and Latin America," says Gareth Evans, principal at AT Kearney's aerospace division. "What we are seeing in the MRO market today is overcapacity, and this is driving down price, very similar to what is happening in the airline industry. But there is a significant shift underway that will create a drive towards balance in demand and capacity." The market expands The maintenance, repair and overhaul (MRO) market, including modifications, airframe heavy maintenance, component maintenance, line maintenance and engine maintenance, is worth $38 billion, up on the estimated $34 billion it was worth in 2003. At a time when US airlines are reporting a combined loss of $7 billion in 2004, the MRO shops have every right to be optimistic. This is especially true in Latin America, which is seeing a growing amount of outsourced work from cost-conscious operators north of the Rio Grande, drawn by low labour costs.
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