The global military aircraft maintenance, repair, and overhaul (MRO) sector is poised for a surge in spending, driven by evolving geopolitical dynamics and an insatiable demand for advanced technology. Our latest report, "Global Fleet And MRO Market Forecast 2025-2035," delves into why military MRO demand will expand 14 times faster over the next 10 years than the sector did between 2019 and 2024. We project a compound annual growth rate (CAGR) of 1.4% in constant dollars between 2025 and 2035 versus 0.1% during the previous five years.

A key driver of this growth will be the expanding fleet of advanced aircraft, notably the F-35, which requires increased maintenance to ensure operational effectiveness. While these sophisticated platforms enhance military capabilities, they also incur substantially higher operating costs due to their complex software, exotic materials, and innovative propulsion systems. By 2035, complex aircraft will represent 14% of the US fleet and 8% of the global fleet, with MRO costs rising 15%.

Beyond advanced aircraft, another factor in rising MRO is the overall expansion of military fleets around the world. As of January 1, 2025, the global active military fleet comprises over 45,400 aircraft, with expectations for a steady growth rate of 1.4% CAGR over the next decade. This marks a notable increase compared with the previous five years, during which the fleet growth rate was only 0.2%. By 2035, the worldwide military fleets will total over 52,200.

Rising MRO costs put military budgets under pressure

The increase in MRO costs should be a concern of governments, which have already been struggling to improve their aircraft readiness rates. For instance, the United States Air Force has responded to rising MRO and falling mission readiness by reducing the number of flying hours allocated per aircraft and accepting lower mission-capable rates, prioritizing modernization over readiness.

Complexity plays a significant role in shaping military MRO budgets. As nations in the US, Europe, and Asia develop sixth-generation fighter aircraft, the implications of design complexity will be crucial. By 2035, complex aircraft are expected to account for 26% of NATO’s total MRO spending, up from 16% today. Notably, the F-35 — the most widely adopted advanced fighter jet — represents one out of every nine dollars spent on MRO by NATO members other than the US.

F-35s represent nearly 50% of the 310 fighter jets purchased annually by global air forces. The aircraft’s share of the global fleet is expected to rise from 2.2% to 4.7% over the next decade. By 2035, the F-35 alone is projected to account for 9.5% of total global MRO expenditures, more than double its current share. Of the 310 fighter jet deliveries per year, the F-35 is expected to account for approximately 50%.

Reports from the US Government Accountability Office (GAO) indicate a 44% increase in life-cycle sustainment costs for the F-35 from 2018 to 2023, despite a 21% decline in flight hours. This trend underscores the complexities and challenges associated with maintaining such advanced aircraft. Other sophisticated platforms, including the NH90 helicopter, A400M transport aircraft, and V-22 tiltrotor, also contribute to rising MRO needs, alongside emerging high-speed rotorcraft such as the US Army's future long-range assault aircraft (FLRAA).

The influence of UAVs and geopolitical conflicts on MRO spending

Among the various categories of advanced military aircraft that will begin to dominate the fleet are unmanned aerial vehicles. UAVs, or drones as they are more commonly called, are set to lead the growth trajectory, with a remarkable CAGR of 8.7% anticipated through 2035. This surge in UAV adoption is largely attributed to their versatility and effectiveness in combat scenarios, particularly in roles that require high endurance and low risk to human life.

By 2035, Group 4 and 5 drones, comparable in size to crewed aircraft, are expected to account for 15% of total flying hours, up from 9% today. The global UAV fleet is projected to reach 3,460 UAVs by 2035. There were 1,400 by the end of 2024. 

The emergence of unmanned combat air vehicles (UCAVs) is another significant trend shaping the future of military aviation. These advanced drones, designed for combat roles, are being developed by various countries, including the United States, South Korea, Turkey, and China. The rise of UCAV technology introduces new dynamics to military operations, as these systems can operate in highly defended airspace with stealth features and autonomous capabilities. As countries invest in these technologies, the MRO requirements for these aircraft will evolve, presenting both challenges and opportunities for military operators.

Not surprisingly, this new fleet will also need maintenance, and MRO spending will be pushed higher by UAV demands. This is amplified by the increased use of drones in active conflicts, such as the one in Ukraine. Sophisticated UAVs have been utilized extensively in that conflict.  

Military MRO market hits $111 billion amid rising strain

The escalating demand for military MRO services presents significant growth opportunities for market providers. To capitalize on this potential, MRO companies must enhance collaboration with their supply chains to address the delays and shortages that have emerged in recent years.

The sector has struggled with supply chain challenges, even before they were exacerbated by the COVID-19 pandemic. Now, they threaten to reshape the market share held by airline MRO departments and independent MRO providers.

This shift is likely to favor the airlines, which have more leverage over suppliers. This increased strength of the airline MRO will be amplified by their control over proprietary technologies, which will force independent MROs to bring on board more workers with specialized technical and engineering skills capable of servicing these advanced aircraft. There will be pressure on carrier MROs to add these workers, but they have greater financial flexibility to handle the new cost.

The global military aircraft MRO market is currently valued at approximately $97 billion and is expected to reach nearly $111 billion over the next decade. Notably, engine maintenance is projected to grow at a rate of 1.6% CAGR. In comparison, component MRO is expected to see a 1.3% CAGR, highlighting the shifting dynamics of aircraft types and the associated maintenance requirements as military forces adapt to more sophisticated technologies.

Military aviation adapts to regional shifts in demand

Regional trends also play a crucial role in shaping the military aircraft landscape. The Asia-Pacific region is set to experience a fleet growth of 2.4% CAGR, driven by an emphasis on locally manufactured aircraft and a growing reliance on indigenous defense capabilities.

In the Middle East, the fleet is projected to grow at 2.8% CAGR, with significant MRO demand stemming from a diverse array of aircraft supplied by US and European contractors. Meanwhile, fleets in the Global South — referring to countries in Africa, Asia, Latin America, and the Caribbean — are seeing emerging markets like Malaysia and Nigeria drive demand for military aircraft and associated services, while experiencing modest growth overall.

The military aircraft sector is on the cusp of significant changes, with fleet expansion and evolving MRO demands reflecting broader geopolitical trends and technological advancements. As operators navigate these changes, the focus will increasingly shift toward maintaining operational readiness and adapting to the complexities of modern military aviation.