|Study Period:||2018 - 2026|
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The European aviation market was valued at USD 37.78 billion in 2020, and it is projected to reach USD 68.41 billion in 2026 with a CAGR of 7.47% during the forecast period (2021-2026).
Europe is one of the earliest and most affected regions in the world due to the COVID-19 pandemic. The aviation industry is a strategically important industry for several countries in the region. The decline in passenger traffic and flight activity in 2020 resulted in huge losses for the airlines in the region. Several airlines, including some of Europe’s most prominent flag carriers, requested substantial economic support from governments for their survival. Major commercial airlines have grounded a majority of their fleets and have canceled orders of new aircraft, thereby hampering the growth of the market studied during the forecast period.
Also, the advent of the second wave of the pandemic and the renewed border restrictions has hugely impacted the general and commercial aviation flight activity in major markets in the region, while the military sector remained resilient.
Due to the increasing pressure from the United States on the NATO members to achieve their defense expenditure target (2% of GDP), several countries in Europe plan to increase their military budget allocation in the coming years. It is estimated that a major share of the allocation is expected to be for the development and procurement of military combat and non-combat aircraft, as several major countries in the region are involved in the development of next-generation military aircraft while many countries require rapid fleet modernization to maintain technological superiority over their adversaries.
Scope of the Report
The European aviation market encompasses the sales of fixed-wing and rotary-wing aircraft across the commercial, military, and general aviation sectors in the Europe region. The market offers an overview of air passenger traffic, aircraft orders and deliveries, defense spending analysis, the introduction of new routes, and investments by country into the aviation sector in the region. The European aviation market is segmented by type into the commercial aircraft, military aircraft, and general aviation segments. The commercial aircraft segment is further segmented into passenger aircraft and freighter. The military aircraft segment is further segmented into combat and non-combat aircraft, while the general aviation segment is further segmented into helicopters, turboprop aircraft, piston fixed-wing aircraft, and business jets. The report also offers the market size of and forecasts for the aviation market in major countries in the region. For each segment, the market size and forecasts are represented by value (USD billion).
Key Market Trends
Rise in Defence Expenditures to Drive the Military Segment Growth During the Forecast Period
In Europe, both the commercial and general aviation segments were affected due to the border restrictions and the decline in passenger demand in 2020 and the first quarter of 2021. However, the demand from the military segment is expected to remain relatively unaffected by the pandemic. Despite the effect of the pandemic on the economies of the countries in the region, most of the countries in Europe increased their defense expenditures in 2020. The average spending among European NATO members increased from 1.52% of GDP in 2019 to 1.64% of GDP in 2020. In addition, the commitment by major European defense markets, like France, Germany, Italy, and the United Kingdom, may continue to increase defense budgets during the forecast period. This factor is expected to make Europe the fastest-growing region, globally, in terms of defense spending. Driven by this factor, several countries in Europe have drafted plans to modernize and enhance their military aircraft fleets over the next decade. The United Kingdom, France, Germany, Poland, Italy, Spain, Finland, Slovakia, Romania, Bulgaria, and Croatia, among others, announced plans and orders for procuring new combat and non-combat aircraft during the forecast period. In addition, countries in the region are enhancing their local aircraft manufacturing capabilities. While France, Germany, and Spain are working together on the Future Combat Air System (FCAS), the United Kingdom’s BAE System is working on the Tempest Sixth Generation Fighter Aircraft. Meanwhile, Russia is also working on several next-generation combat and non-combat aerial platforms. All these factors are expected to drive the military segment of the market during the forecast period.
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United Kingdom is Expected to Dominate the Europe Aviation Market During the Forecast Period
In the European aviation market, the United Kingdom currently accounts for a major share in terms of revenue. The United Kingdom has some of the busiest international airports in Europe like London-Heathrow airport, Gatwick airport, Manchester airport, etc. Despite a huge reduction (about 72%) in passenger traffic in 2020, the London-Heathrow airport remained one of the busiest airports in Europe. Though the COVID-19 pandemic has drastically affected the future growth plans of carriers like EasyJet and Virgin Atlantic, a few airlines were defying the industry’s pessimism over the COVID-19 impact and have expanded their order book in 2020. For instance, in December 2020, Ryanair placed an order for 75 B737 MAX aircraft worth over USD 9 billion in hopes that its customer base would grow from 149 million by 2022 and reach 200 million by 2026. British Airways' fleet of new aircraft is also growing as the airline is taking deliveries of the Airbus A350 aircraft following the retirement of its Boeing 747 in early 2020. The airline, however, pushed back the initial deliveries of the Boeing 777X aircraft from 2022 to 2024 due to delay from Boeing. Apart from commercial aviation, the United Kingdom government had invested heavily in the modernization of its fighter aircraft fleet. The Royal air force and Royal Navy planned to procure 138 Lockheed Martin F-35B STOVL aircraft in total, out of which 21 aircraft were in service as of 2020, out of 48 envisioned to be procured by 2025. The government has also announced to invest GBP 2 billion on Tempest, a new fighter aircraft project (under development) by 2025. Moreover, the UK business aviation sector has also witnessed a huge growth rate over the years. The country has two of the top ten busiest business aviation airports in Europe, Farnborough airport and London Luton airport. VistaJet, Ravenair, Wijet, and the Luxaviation United Kingdom, are some of the main charter jet service providers in the United Kingdom. With the growing number of people opting for charter service for business travel in Europe, charter jet service providers are procuring new aircraft to increase their fleet. For instance, in July 2020, Luxaviation UK added an Embraer Legacy 650 to its fleet. However, with the outbreak of the second wave of the COVID-19, the growth of the United Kingdom aviation market is expected to be hampered in 2021, as aircraft operations have come down, and aircraft operators are facing severe losses, which might result in cancellations and deferrals of aircraft orders in the commercial and general aviation sectors.
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Airbus SE, Boeing, Lockheed Martin Corporation, Leonardo SpA, and Dassault Aviation SA are some of the major players in this region. Airbus dominates the market in Europe in commercial as well as military aviation. The market is highly competitive and is majorly dominated by a few players. The aircraft industry is expected to see new innovations getting implemented in aircraft design, which is expected to change the meaning of safety, comfort, and efficiency for both passengers and aircraft manufacturers. Companies are looking forward to grabbing the opportunities offered by the new technological innovations, thereby increasing their respective market shares. Multiple countries are partnering to develop new military aircraft models, which is expected to bolster the prospects of the local players in those countries. For instance, Germany, France, and Spain are involved in the development of a next-generation fighter jet named Future Combat Air System (FCAS). Such programs are expected to drive the growth of the local players in these countries during the forecast period.
- In June 2021, Swiss regional carrier Helvetic Airways received its first Embraer E195-E2 aircraft. This is part of the fleet renewal program that started in 2018 when an order for 12 E190-E2s was placed. Later in July 2020, the carrier announced its plan that four of the remaining seven aircraft to be delivered were to be converted to the larger E195-E2s.
- In May 2021, France, Germany, and Spain reached a deal over the next steps of the development of a new fighter jet, Europe's largest defense project at an estimated cost of more than 100 billion euros (USD 121.4 billion). The next development phase for the Future Combat Air System (FCAS) is expected to cost 3.5 billion euros (USD 4.25 billion), to be shared equally by the three countries.
- In December 2020, Ryanair placed an order for 75 B737 MAX aircraft worth over USD 9 billion. The airline announced that it is anticipating that its customer base would grow from 149 million by 2022 and reach 200 million by 2026.
- In November 2020, the German government approved a budget of USD 6.35 billion (EUR 5.4 billion) for the procurement of 38 Eurofighter aircraft from Airbus. These 38 aircraft will replace the Tranche 1 Eurofighter aircraft.
Table of Contents
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION (Market Size by Value - USD billion)
5.1.1 Commercial Aviation
22.214.171.124 Passenger Aircraft
5.1.2 Military Aviation
126.96.36.199 Combat Aircraft
188.8.131.52 Non-combat Aircraft
5.1.3 General Aviation
184.108.40.206 Piston Fixed-wing Aircraft
220.127.116.11 Turboprop Aircraft
18.104.22.168 Business Jet
22.214.171.124 United Kingdom
126.96.36.199 Rest of Europe
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Airbus SE
6.1.2 Saab AB
6.1.3 Pilatus Aircraft Ltd
6.1.4 Dassult Aviation SA
6.1.5 Leonardo SpA
6.1.6 Lockheed Martin Corporation
6.1.7 The Boeing Company
6.1.8 Bombardier Inc.
6.1.9 Textron Inc.
6.1.10 General Dynamics Corporation
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Europe Aviation Market market is studied from 2018 - 2026.
What is the growth rate of Europe Aviation Market?
The Europe Aviation Market is growing at a CAGR of 7.47% over the next 5 years.
What is Europe Aviation Market size in 2018?
The Europe Aviation Market is valued at 38 Billion USD in 2018.
What is Europe Aviation Market size in 2026?
The Europe Aviation Market is valued at 68 Billion USD in 2026.
Who are the key players in Europe Aviation Market?
Lockheed Martin Corporation, Leonardo SpA, Dassault Aviation, The Boeing Company, Airbus SE are the major companies operating in Europe Aviation Market.