News Digest:

A resurgence in air travel after the pandemic that also caused a lag in aircraft product has resulted in growing demand for refurbishment of old aircraft. This has generated a growing interest from private equity players in aerospace service and maintenance.

According to a report, passenger traffic has returned to pre-pandemic levels and would hit 2019 numbers by the end of 2024, while manufacturers are facing supply chain disruptions resulting in their inability to meet the demand for new aircraft. As of 2023, Boeing and Airbus faced order backlogs of over 14,700 units.

Takeaway:

Airlines took lot of debt during the pandemic and couldn’t invest as well as they could in the past. This resulted in older aircraft staying in service longer and requiring maintenance, repair and operational services. PE dealmaking in this segment touched a high in 2020 but hit a steady pace thereafter. Thus far in 2024, 13 PE-backed investments were closed, which represents half of all the M&A deals in this industry.

End Notes

Source: https://pitchbook.com/news/articles/flying-high-pe-fuels-niche-aircraft-maintenance-industry?utm_medium=newsletter&utm_source=weekend_pitch&utm_campaign=PE_news&utm_content=commentary&utm_term&sourceType=NEWSLETTER/