Market is Flying Beyond Expectations
- The commercial aircraft market is projected to reach USD 173.08 billion by 2026, registering a CAGR of 12.32% during the forecast period (2021 - 2026).
- By Aircraft type, the wide body segment is expected to witness the highest CAGR of 16.89% during the forecast period.
- By engine type, the Turboprop segment is expected to witness the highest CAGR of 24.57% during the forecast period.
Market Touching Skies Despite the Backlogs
- Due to the ongoing COVID-19 pandemic, the passenger traffic is expected to take 3-4 years to recover completely. However, the large-scale backlog with aircraft OEMs is expected to drive the market during the forecast period.
- The existing order backlog with the aircraft OEMs is still high. By the end of November 2021, Airbus reported a backlog of 7,036 jets. Boeing’s backlog was 4,210 aircraft. These numbers reveal that despite the reduction in demand from the airlines, commercial aircraft deliveries will continue at a healthy rate during the forecast period.
Boeing is Back
- The demand for narrow-body aircraft is expected to recover faster than wide-body aircraft, as domestic demand is expected to return to pre-COVID-19 levels earlier than the international passenger demand. The return of the 737 MAX into service will help the growth of the narrow-body subsegment, which is the most dominating in the commercial aviation market.
- A notable growth rate is expected to be experienced within the narrow-body aircraft segment, particularly in the Asia-Pacific region. The increase in smaller and domestic routes and the adoption of low-cost carriers is the primary driving factor.
Impact of New Initiatives & Regulations in Aerospace
- The gradual recovery in passenger traffic is driving the airlines and aircraft operators to invest in fleet modernization programs. For instance, in June 2021, United Airlines announced accelerating the deferred aircraft order for 45 Boeing 737 MAX deliveries to 2022 and 2023 (from 2023 and beyond).
- With the aviation regulators allowing the 737 MAX to fly, Boeing expects to finally get back into its higher production rates at around 42 of its 737 MAX airplanes per month by the end of 2022. Such developments are expected to help revive commercial aircraft deliveries, driving the market growth.
Predictions of Top Chair
- The IATA (International air transport association) predicts that passenger traffic is anticipated to return to the pre-COVID level by 2024. Short-haul travel is expected to recover faster than long-haul travel.
- Several aircraft manufacturers like Boeing and Airbus have predicted that almost 80% of new aircraft deliveries will be in the narrow-body segment over the coming decade.
- As per the estimates by Airbus, air traffic is expected to recover fully and reach the pre-COVID level between 2023 and 2025. The revenue passenger kilometers (RPK) are expected to grow by 3.9% Y-o Y.
Bird’s Eye View on Vendor’s Vision
Mitsubishi Heavy Industries LTD is planning to invest in advanced technologies to introduce automated technologies and develop advanced materials for commercial aviation.
Rostec development strategy until 2025 is to expand into the EurAsEC (Eurasian Economic Community) market by exporting the company's products and to establish partnerships to obtain additional financing that will help to increase operational efficiency and enter new markets.
Embraer SA: The key focus is to strengthen its position in the executive jets market by streamlining its portfolio by continuously investing in product development and customer support for its executive jets. Also, to provide enhanced capabilities through a portfolio of defense-integrated solutions to consolidate its position as a key partner of the Brazilian Armed Forces and other international players.
Latest Developments in Aero Corner
In December 2021, ITA Airways placed a firm order for 28 aircraft, including 11 A320neo, 10 A330neo, and seven A220 aircraft.
In November 2021, Indigo partners portfolio airlines, Wizz Air (Hungary), Frontier (United States), Volaris (Mexico), and JetSMART (Chile, Argentina) have cumulatively placed an order for 255 additional A321neo Family aircraft under a joint Indigo Partners agreement. The Indigo Partners’ airlines order increased to 1,145 A320 Family aircraft.
In November 2021, Akasa Air, a brand of SNV Aviation, placed an order for 72 Boeing 737 MAX family aircraft (Boeing 737-8 and Boeing 737-8-200). The order was valued at approximately USD 9 billion.