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The Latin America Commercial Aircraft Market is expected to register a CAGR of more than 10% during the forecast period (2022-2027).
Due to the impact of COVID-19, the aviation industry in the Latin America region was severely affected as the total air passenger traffic decreased greatly in 2020, which led to a reduction in the revenues of airlines. The pandemic coupled with an earlier financial crisis led to the bankruptcy of several airlines and the ceasing of their operations. However, in 2021, the passenger traffic in the region began to gradually recover, which led to the restructuring of airlines from bankruptcy.
As the passenger traffic in the region began to recover in 2021, the airlines and aircraft operators are undertaking fleet modernization plans to expand their fleet and introduce new generation aircraft by replacing aging aircraft fleet. In addition to the passenger aircraft fleet, the growing demand for cargo over the past few years is propelling the demand for the procurement of new and advanced cargo aircraft. This is expected to drive the growth of the market during the forecast period.
Scope of the Report
Commercial aviation is a part of civil aviation involving scheduled airline services that involve operating aircraft to transport passengers and cargo. The study gives a brief description of the commercial aircraft market worldwide and includes details on air passenger traffic, new routes, investments in airport infrastructure, air freight, and procurement of new aircraft.
The commercial aircraft market is segmented by application into passenger aircraft and freighters. Passenger aircraft are further segmented into narrow-body aircraft, wide-body aircraft, and regional aircraft. The report also offers the market size and forecasts for the aviation market in major countries in the Latin America region. For each segment, the market size and forecasts are provided in terms of value (USD billion).
|Rest of Latin America|
Key Market Trends
Passenger Aircraft Segment held the Largest Share in 2021
The passenger aircraft segment has accounted for the highest share in 2021 due to the robust procurement of new generation passenger aircraft as a part of fleet modernization initiatives of the airlines. The aviation market in the region is gradually recovering from the COVID-19 pandemic with passenger traffic increasing significantly in 2021 compared to the previous year. According to Airbus, about 2,460 passenger and freighter aircraft are expected to be delivered to the Latin America region during the period of 2022 – 2040. Out of the total aircraft deliveries, approximately 44% of aircraft will replace aging and less fuel-efficient aircraft. The company also estimated that 88% of the new aircraft deliveries will be narrow-body aircraft with the Airbus A320 family, the Boeing 737 family, and the Embraer E190 being the major models. Recently in April 2022, Aerolíneas Argentinas announced its plan to fully restore its fleet size to pre-COVID fleet levels in 2022. The airline is expected to receive two new A330-200s for the long-haul routes and two Boeing 737 MAX aircraft. The airline is also looking into the replacement of aging Embraer E1 aircraft. Similarly, in November 2021, Volaris placed an order of 39 A321neo aircraft and negotiated with Airbus to convert 20 aircraft from A320neo to A321neo of its current order. Such orders from the airlines and aircraft operators to expand their fleet is anticipated to boost the growth of the market during the forecast period.
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Brazil Accounted for Highest Share in the Market in 2021
Brazil currently dominates the market and is expected to continue its dominance over the market during the forecast period. This is primarily due to the rapid growth in the passenger traffic of the country, which propelled the investments of the airlines towards the procurement of new generation aircraft. The airports in the country handled more than 62.5 million passengers in 2021 compared to 51.9 million in the previous year. Due to the COVID-19 pandemic, major airlines in the country have undertaken various initiatives to mitigate their loss. In this regard, Azul reached an agreement with Embraer and Airbus in May 2020 to postpone the deliveries of 82 aircraft that were originally scheduled to be delivered between 2020-2023. The deliveries of these aircraft are expected to begin in 2024. The agreements for deferring its orders were part of its recovery plan to ensure liquidity. LATAM Brasil, GOL Airlines, and Azul Airlines are the major airlines in the country in terms of passenger traffic in 2021. Currently, all three airlines have over 180 aircraft on order. In addition to the acquisition of new passenger aircraft, the airlines in the region are also expanding their cargo fleet. For instance, in February 2022, Azul Airlines announced that the company completed the conversion and certification of the world's first E195 dedicated freighter. Such procurement plans of new airlines as well as the growth in emphasis on the expansion of their route network is anticipated to propel the growth of the market in the coming years.
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The market of Latin America commercial aircraft is highly consolidated with few players accounting for the majority share in the market. The prominent players in the Latin America commercial aircraft market are Airbus SE, The Boeing Company, Embraer SA, ATR, and Rostec. About 60% of the existing commercial fleet in the region is composed of Airbus aircraft and the remaining fleet majorly includes aircraft from Boeing, Embraer, and ATR. Airbus and Boeing are expected to continue their dominance in the market in the coming years as they have over 350 aircraft and over 150 aircraft on order (as of March 2022), respectively. The largest order for Airbus is from Mexico’s Volaris, whereas the largest order for Boeing is from GOL Linhas Aereas of Brazil. In addition to the demand for passenger aircraft, the aircraft OEMs are expanding share their share in the market through the deliveries of new and advanced cargo aircraft. On this note, in March 2022, LATAM group announced that its cargo division received the second of 10 Boeing 767 converted freighters. The aircraft were ordered as a part of plans to expand its cargo business and will serve Colombia, Brazil, and Central America markets. The remaining aircraft are planned to be delivered by the end of 2023. Such orders and deliveries of aircraft are expected to support the growth of aircraft OEMs in the commercial aircraft market.
In June 2022, LATAM Brazil announced that the airline received its first Airbus A320neo since the start of the COVID-19 pandemic. The aircraft is the seventh of this model in the LATAM fleet in Brazil and is one of the 70 Airbus A320neo family aircraft ordered by the LATAM group.
In May 2022, GOL Linhas Aereas Inteligentes SA and Avianca announced that the companies will create a joint holding company called Abra Group. The new group is expected to begin operations by the end of 2022 and following the creation of the new group, both the airlines will continue to operate independently and retain their respective brands.
Table of Contents
1.1 Study Assumptions and Market Definition
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 Industry Attractiveness - 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 and Forecast by Value - USD billion, 2018 - 2027)
5.1.1 Passenger Aircraft
220.127.116.11 Narrow-body Aircraft
18.104.22.168 Wide-body Aircraft
22.214.171.124 Regional Jets
5.2.4 Rest of Latin America
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Airbus SE
6.1.2 The Boeing Company
6.1.3 Embraer SA
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The Latin America Commercial Aircraft Market market is studied from 2018 - 2027.
What is the growth rate of Latin America Commercial Aircraft Market?
The Latin America Commercial Aircraft Market is growing at a CAGR of >10% over the next 5 years.
Who are the key players in Latin America Commercial Aircraft Market?
Airbus SE, The Boeing Company, Embraer SA, ATR, Rostec are the major companies operating in Latin America Commercial Aircraft Market.