Market Trends of APAC Aviation Industry
This section covers the major market trends shaping the APAC Aviation Market according to our research experts:
Commercial Aircraft Segment Projected to Witness the Highest CAGR During the Forecast Period
The commercial aircraft segment is projected to witness the highest CAGR during the forecast period. Though the demand for commercial aircraft came down in 2020 because of the COVID-19 pandemic, airlines in the region still have a huge order backlog for commercial aircraft. The demand for domestic travel has been gradually increasing from late 2020 and in 2021. The domestic passenger traffic in China, India, South Korea, and Australia, among others, has increased by over 20% compared to the previous year. As domestic travel is showing signs of recovery, the low-cost airlines in the region are acquiring smaller aircraft like narrow-body aircraft and regional jets, which are expected to drive the growth of the segment in the region. For instance, IndiGo, a low-cost airline in India, has been rapidly expanding its fleet over the past few years and did not slow down deliveries even during the COVID-19 pandemic (estimated that its fleet increased by more than 300% during the pandemic period) as it plans to expand the seating capacity while attracting passengers at a lower cost per seat. As of 2021, 282 aircraft were in service and had more than 580 aircraft on order. In the coming years, the introduction of new airlines in the countries like India, South Korea, Indonesia, and Thailand, among others, is expected to generate demand for new aircraft. Such factors are anticipated to accelerate the growth of the market during the forecast period.
China Expected to Dominate the Aviation Market During the Forecast Period
China has become a major hub for the aviation industry over the years due to high demand from civilian and military customers. China has experienced double-digit growth rates over the past two decades in the commercial aviation market. Even during the pandemic-affected 2020, China's relatively stable domestic traffic helped the financial recovery of airlines in the country. According to the Civil Aviation Administration of China (CAAC), in 2021, the domestic passenger traffic in the country was over 570 million, which is about 85% of its pre-COVID volume of domestic passenger traffic. Also, according to Boeing, about 8,700 aircraft are expected to be delivered by 2040 in the country.
In the military segment, China has been increasing its aircraft fleet, in line with its plans to strengthen its airborne military capabilities. The country has also strengthened its indigenous military aircraft manufacturing capabilities. While the J-20B, a new variant of China's first fifth-generation fighter J-20, was unveiled in July 2020 as well as the country's second fifth-generation fighter jet, FC-31, is also expected to enter service during the forecast period. Also, the country is building a new carrier-based fighter jet to replace its J-15 fighters after a series of crashes and mechanical failures. China plans to create at least four aircraft carrier groups to fulfill its navy ambitions. The maiden flight of the new aircraft is expected to take place in 2021, and it may enter service between 2025 and 2028. This new aircraft will be a medium-sized stealth aircraft to supplement the heavy J-20 stealth fighter jet. On the other hand, the general aviation industry is one of the strategic emerging industries in China, and the government has taken measures to boost its development over the years. With the growing demand from the civilian and military segments and the growing capabilities in aircraft production, the country is expected to dominate the market in the Asia-Pacific region during the forecast period.
