Howmet Aerospace's Strategic Position in the Growing Aerospace Spare Parts Market

The aerospace industry is undergoing a transformative phase as post-pandemic demand for air travel rebounds, driving robust growth in the aftermarket for spare parts and maintenance, repair, and overhaul (MRO) services. According to an Oliver Wyman report, the global aircraft aftermarket parts market was valued at USD 49.3 billion in 2024 and is projected to grow at a compound annual growth rate (CAGR) of 8.3%, reaching USD 108.8 billion by 2034. This expansion is fueled by an expanding global aircraft fleet, rising air travel, and a heightened focus on MRO activities. The same report notes that the MRO market rebounded to 98% of pre-COVID 2019 spending levels in 2023, with an expected annual growth rate of 1.8% through 2034.

Amid this backdrop, Howmet Aerospace stands out as a strategic player in the aerospace spare parts segment. The company's disciplined capital allocation, operational excellence, and technological innovation position it to outgrow its markets and deliver sustained profitability.

Operational Strengths and Market Positioning

Howmet's focus on high-margin aerospace spares has accelerated in recent years. In 2024, spares accounted for 17% of its total revenue, up from 11% in 2019, with the company projecting this segment to reach 20% of total revenue in the coming years, according to Howmet's annual report. This growth is underpinned by strong demand for engine overhauls and turbine blade replacements, particularly for Boeing and Airbus narrow-body aircraft. To meet this demand, Howmet has invested in capacity expansion, including new facilities in Michigan and Kentucky, which the annual report says are expected to support production rates through 2026.

The company's technological leadership further strengthens its competitive edge. Howmet leverages advanced manufacturing techniques such as additive manufacturing and AI-driven testing to enhance production efficiency and quality, as outlined in the annual report. Its Ampliforge™ hybrid process, for instance, combines forging and additive manufacturing to produce complex components with reduced lead times. These innovations align with industry trends toward predictive maintenance and integrated aircraft health management systems, which are critical for reducing downtime and improving operational efficiency, the Oliver Wyman report observes.

Financial Performance and Capital Allocation Efficiency

Howmet's financial discipline is a cornerstone of its strategy. In 2024, the company reported record revenue of $7.4 billion, with adjusted EBITDA of $1.9 billion, reflecting 12% and 27% year-over-year growth, respectively, per the annual report. Its capital allocation strategy has been equally robust: $321 million in 2024 capital expenditures were directed toward expanding production capacity, while $500 million was returned to shareholders through stock repurchases and a 25% dividend increase. As of December 31, 2024, Howmet maintained a net debt-to-adjusted EBITDA ratio of 1.4x and generated $977 million in free cash flow, with an 88% cash conversion rate.

In 2025, Howmet's second-quarter 2025 results showed the company's performance continued to outpace expectations: second-quarter revenue reached $2.05 billion, a 9% year-over-year increase, driven by 21% growth in defense aerospace revenue. The defense segment, which now accounts for 17% of total sales, has been a key driver, fueled by demand for F-35 engine spares and legacy fighter jet components. The company also accelerated capital expenditures, with first-half 2025 spending up 60% year-over-year, reflecting its commitment to scaling capacity for future demand.

Strategic Partnerships and Long-Term Outlook

Howmet's strategic partnerships and market diversification further insulate it from sector-specific risks. The company is expanding into industrial gas turbine (IGT) markets, where growing electricity demand—driven by data center construction—creates new opportunities for turbine blade replacements and maintenance, the annual report highlights. Additionally, Howmet's leadership in titanium alloy 3D printing positions it to benefit from the industry's shift toward fuel-efficient, lightweight components.

Challenges such as labor shortages and supply chain disruptions persist in the MRO sector, as the Oliver Wyman report documents, but Howmet's focus on automation and AI-driven testing mitigates these risks by improving yield and reducing production bottlenecks. Its strong balance sheet and disciplined capital allocation also provide flexibility to navigate macroeconomic uncertainties while maintaining high returns for shareholders.

Conclusion

Howmet Aerospace's strategic positioning in the aerospace spare parts market is a compelling case for long-term investors. By combining operational excellence, technological innovation, and disciplined capital allocation, the company is not only capitalizing on the post-pandemic MRO boom but also future-proofing its business against industry headwinds. As the aerospace sector continues to prioritize efficiency and sustainability, Howmet's focus on high-margin spares and industrial applications positions it to outperform peers and deliver durable shareholder value.