BrazilNumber of commercial airplanes to reach 40,000 by 2030
Despite the current Covid-19 crisis and a range of anticipated challenges up ahead, the global fleet of commercial aircraft is expected to grow at a compound annual growth rate (CAGR) of more than 3% over the next decade. This is according to research from strategic consultancy Oliver Wyman.
The commercial fleet currently active across the globe consists of just under 28,000 aircraft. Over the next decade, Oliver Wyman expects the delivery of more than 21,000 new aircraft in the commercial fleet, half of which will be replacements for ageing planes. As a result, the global fleet should stand at around 40,000 aircraft by 2030, marking a 3.4% CAGR.
The high level of replacement highlights an ageing global fleet, with around 9% of current in-service aircraft being over the age of 25. At the turn of the last decade, this figure stood at 10%. As a result, the researchers expect growth for the aircraft maintenance, repair and overhaul (MRO) market across the globe as well, as it services an ageing global fleet.
Passenger planes will make up the majority of this fleet, accounting for over 36,000 of the nearly 40,000 by 2030. Despite growth in the fleet, demand in the passenger fleet segment is on the decline. Revenue passenger kilometres (RPKs) refer to the distance traveled by passengers, and are used by the global aviation industry as a metric for demand. Oliver Wyman – a specialist in aviation services – points to International Air Transport Association (IATA) forecasts, which predict that RPKs will halve over the next ten years.
The slowing of economic growth in key markets is one reason for this, according to the consultancy. Booming markets in China and India were among the primary reasons for RPK growth in the last decade, and both economies appear to have entered a phase of slower economic growth.
The cargo segment
On the other hand, the cargo fleet – which currently makes up only 8% of the global commercial fleet – will grow faster over the next decade than in the previous one. One of the reasons for this is the rapid rise of ecommerce.
The authors of the report point out how the growth of ecommerce has challenged the use of freight tonne kilometres (FTKs) as a measure for cargo demand. “E-commerce cargo is lighter than typical air freight, which means it depresses FTKs and makes the metric less reflective of the state of cargo. Total shipments appear to have increased, which justifies the continued fleet growth for the largest parcel carriers,” stated the authors in their report.
In the cargo sphere, China and India continue to be drivers of strong growth, due to the booming ecommerce markets in these regions. Where global courier companies such as UPS and FedEx have previously made North America dominant in the cargo space, ecommerce in the Asia-Pacific is shifting the epicentre of cargo demand to a degree.
No doubt, the overall composition of the global commercial aircraft fleet remains heavily tilted towards North America and Western Europe. However, these regions have a roughly balanced ratio of new deliveries to retirements, whereas China and the Asia Pacific as a whole have far more new deliveries than retirements.
As a result, China remains the driver of growth in the global commercial fleet, albeit at a slower rate than in the last decade. While Western Europe dominates aviation for the European market, Eastern Europe's aviation sector is also growing at a rapid rate.
India is another market where growth will be centred over the next ten years. The Indian commercial fleet is growing at an average of more than 12% per year, and is expected to triple over the course of the next decade, making it the fastest growing country in Oliver Wyman’s analysis.
“The Asia Pacific, China, and India fleets total more than 8,600 aircraft, representing 31 percent of the global fleet. These fleets are expected to surge to over 15,400 aircraft by 2030 — 40 percent of the global fleet. In total, Asia will comprise 61 percent of global growth over the next decade,” said the report’s authors.
The report predicts that China alone will overtake the market share of Western Europe by 2030, as will the rest of the Asia Pacific Market combined. Meanwhile, North America will remain dominant in the global fleet over the next ten years, despite a decline in market share.
Over the last decade, North America has held approximately 30% of the global commercial fleet, with more than 8,000 aircraft. The region has also invited the most number of new deliveries in the last ten years. However, the new deliveries have been offset by an ageing fleet and a consequently high number of retirements. As a result, the fleet has only grown by 1% per year over the last decade, and will dip to around 25% of the global market share by 2030.
