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Industry Insight Report: Aircraft Engine & Parts Mfrs Q3-2025

Aircraft Engine & Parts Mfrs Industry Insight Report Cover

After a turbulent first half of the year, aircraft engine and parts manufacturers saw a modest rebound in new orders by mid-2025. However, the industry remains under pressure due to persistent ripple effects from Boeing’s late-2024 labor strike and ongoing production issues. At Lion Business Advisors, we’ve seen increased buyer scrutiny around supply chain stability, with strong interest in businesses that support OEM diversification or specialize in high-margin aftermarket components.

Key Trends Impacting the Market

Backlogged Demand Driving Long-Term Opportunity
Airlines are eager to expand fleets amid high passenger demand, but Boeing and Airbus are struggling to hit production goals. Airbus delivered 56 aircraft in April, down 8% year-over-year, while Boeing improved its output to 45 jets, double March’s figure but still below annual targets. These shortfalls trickle down to engine and component manufacturers, extending timelines for parts orders and placing added importance on operational agility. The capacity crunch means engine and parts suppliers will likely see sustained demand into 2026 and beyond.

Employment Growth Reflects Industry Optimism
Employment in aircraft engine and parts manufacturing rose 3.6% year-over-year in April 2025, with a 19.1% increase over the past three years, outpacing the broader private sector’s 4.8% growth. This hiring trend signals confidence in the sector’s long-term outlook, despite current fulfillment challenges. While wage growth in aerospace has lagged the broader economy (10.3% vs. 13.4% over three years), average hourly pay still stands at a strong $47.74.

Forecast: Above-Average Growth Through 2029
Despite near-term hurdles, the long-term outlook remains positive. The industry is projected to grow at a 5.6% compound annual rate from 2025 to 2029, outpacing the overall economy. With continued investments in R&D and the next generation of propulsion systems, opportunities remain strong for both OEM-aligned suppliers and aftermarket parts manufacturers.

M&A Market Outlook

M&A appetite remains strong for lower middle market suppliers with certifications, customer diversification, and scalable infrastructure. Strategic acquirers are targeting FAA-certified repair stations, CNC manufacturers with aerospace contracts, and firms specializing in DOD or commercial jet programs. Private equity is increasingly eyeing these businesses for bolt-on acquisitions to build platform value. In today’s environment, businesses with contract stability, succession-ready leadership, and reliable gross margins are well-positioned to attract premium valuations.

With modest recovery in orders and long-term industry tailwinds, the next 12–18 months may offer a favorable window for owners considering a strategic exit. Positioning your business around these trends could enhance marketability and value.

Thinking about a strategic sale or recapitalization?
Now is the time to understand your company’s market value and position it for the next phase of growth.  Get Your Sellability Score Today to benchmark your sellability.

  • Lion Business Advisors’ quarterly industry insights incorporate data and trends sourced from internal deal flow and buyer activity, Vertical IQ, and market comparables from platforms such as Axial and BVR (Business Valuation Resources).