Heico Figures Point To Sustained MRO Market Health

Heico is seeing sustained steady demand within its Flight Support Group (FSG), which points to comparably strong demand for commercial aftermarket services beyond the red-hot engine segment.

The parts manufacturer approval (PMA) and component repair specialist said FSG grew 13% organically and 18% overall year-over-year for the three months ended July, the company’s fiscal 2025 third quarter. The parts business was up in the lower teens, CFO Carlos Macau said on an Aug. 26 earnings call. Repair and overhaul was a few points better.

“We had a nice quarter where there’s a lot of PMA-friendly repairs that we did,” Macau said. “[We] continue to develop new [designated engineering representative] repairs every day. It does have a very positive impact on our margins.”

FSG’s third quarter operating margin was 25% net sales of $802 million, it said.

Heico’s parts sales business focuses on lower-cost items that often have little used serviceable material competition. Close-in demand drives sales—parts are ordered and quickly shipped to meet customer needs.

FSG President Eric Mendelson estimates “roughly” 25% of FSG’s aftermarket revenue is linked to engine services, which have been in high demand for several years due to a combination of factors. The company’s recent performance suggests both strong demand for Heico’s offerings and steady commercial market activity beyond packed engine overhaul shops.

“When you see 75% of our business being airframe, and we’re up 13% organic growth. I think that speaks to the depth and the breadth of our product line and capabilities,” Mendelson said.

Airbus and Boeing are eyeing boosts in both monthly deliveries and production rates to help dig out of several years of lower-than-expected activity. Many airlines awaiting new aircraft have postponed planned retirements and invested in maintenance and spare parts for older-generation equipment.

Heico says it is seeing some pockets of destocking as airlines adjust fleet and network strategies, Mendelson said that there isn’t a broad trend threatening parts sales.

“There was a certain amount of over-ordering in particular areas,” he said. “We are seeing some destocking in some areas, yet we continue to see huge shortages in others ... the supply chain is just too thin for what they need.”

Company-wide, Heico reported fiscal third quarter net sales of $1.1 billion, up 16% year-over-year. EBITDA totaled $316.4 million, up 21%.