Real Options Valuation in the Aerospace MRO Industry

This case study applies real options analysis to investment decisions in the aerospace Maintenance, Repair, and Overhaul (MRO) sector. Faced with volatile air travel demand, firms must carefully time and scale their investments. By treating equipment upgrades as sequential options, the study shows how phased investment strategies can mitigate risk. The approach offers government and private firms a framework to navigate uncertainty while maintaining operational flexibility.