What's Happening?
Rolls-Royce has reported a significant increase in its commercial aftermarket division revenues, reaching £7.2 billion ($9.7 billion) in 2025, driven by stronger shop visit volumes in the widebody engine market. The company attributes this growth to large-engine
aftermarket expansion, improved contractual margins, and enhanced spare-engine profitability. In 2025, major shop visits for large commercial engines increased to 517 inductions, up from 430 the previous year. Despite these gains, Rolls-Royce faced supply chain challenges that led to a reduction in engine deliveries, with only 259 engines delivered in 2025 compared to 278 in 2024. The company has been expanding its global MRO network to accommodate increased demand, adding capacity in Derby, England; Dahlewitz, Germany; and Singapore. Additionally, Rolls-Royce launched a joint venture with Air China in Beijing and plans to establish a maintenance center in Istanbul with Turkish Technic by 2027.
Why It's Important?
The growth in Rolls-Royce's aftermarket division highlights the resilience of the aerospace sector's service segment, even amid supply chain disruptions affecting new engine deliveries. This development is crucial for the company's financial health, as aftermarket services often provide higher margins than new engine sales. The expansion of maintenance, repair, and overhaul (MRO) facilities globally positions Rolls-Royce to better support its customers and capture a larger share of the lucrative aftermarket business. This strategy not only helps offset the impact of reduced engine deliveries but also strengthens the company's long-term market position. The increased capacity and new joint ventures indicate a strategic focus on expanding service capabilities, which could lead to more stable revenue streams and enhanced customer relationships.
What's Next?
Rolls-Royce plans to continue expanding its MRO network, with a projected 20% increase in capacity by the midterm to support fleet growth. The company aims to handle up to 1,400 large-engine shop visits annually by 2028. The new facilities in Beijing and Istanbul are expected to significantly boost the company's service capabilities, with the Beijing joint venture supporting up to 250 engine overhauls annually by the mid-2030s. The Istanbul center, set to open in 2027, will handle up to 200 shop visits annually. These expansions are likely to enhance Rolls-Royce's competitive edge in the aftermarket sector, providing a buffer against fluctuations in new engine sales and positioning the company for sustained growth.
