MRO Memo: Rating Agencies Expect Sustained Engine MRO Demand

Strong engine maintenance demand has been recognized by rating agencies in recent credit assessments of aviation OEMs and aftermarket suppliers.

S&P Global Ratings has upgraded FTAI Aviation from B+ to BB—two notches below an investment grade rating—noting that it is well-positioned to capitalize on current market conditions, which S&P characterized as limited new aircraft supply, aging fleets and a shortage of engines.

“These factors all make FTAI’s MRE [maintenance, repair and exchange] business more attractive as aircraft owners seek cost-efficient engine repairs,” S&P analysts wrote. “FTAI is an attractive option for MRE work as it offers engine and module exchanges for aircraft parts using its own stock of refurbished engines and modules, which speeds the process of repairs relative to other providers.”

The agency also highlighted FTAI’s partnership with Chromalloy to develop CFM56 hot section PMA parts, and a recently announced AI partnership with Palantir, as key differentiators for the business.

Meanwhile, Moody’s has affirmed the B2 long-term corporate family rating of Propulsion Finco, the holding company of ITP Aero, the Spanish engine module OEM and maintenance provider.

Despite highlighting a recent rise in leverage at the company, Moody’s expects ITP to “continue to experience strong revenue and earnings growth in the coming years as market fundamentals remain supportive across commercial and defense aviation while demand for MRO services remains strong.”

However, it did express some concerns about decision-making due to the company’s private equity ownership, “which creates the potential for decisions that favor shareholders over creditors, as indicated by the total amount of €1,430 million [$1.6 billion] distributed to shareholders in 2024 and 2025.”

ITP Aero was sold by Rolls-Royce in 2022. It is now majority owned by Bain Capital.

In 2024, ITP Aero reported record revenues of €1.61 billion, 24% higher than a year earlier. This was driven by strong demand for commercial aero-engine production and maintenance, which accounted for about 75% of the company’s business in 2024.