According to the report, air traffic is expected to double over the next 20 years, surpassing global economic activity driven by increasing tourism demand and improved service levels. This growth presents significant opportunities for industry stakeholders, particularly in emerging markets.
Undeniably, the COVID-19 pandemic adversely impacted numerous industries, including air services. While the replacement of 2-3% of the commercial jet fleet is typically an annual occurrence, the pandemic caused delays in this process. As a result, the active fleet is currently approaching the size it was four years ago, yet challenges persist in meeting demand due to the aforementioned issues.
Nevertheless, airlines are now actively accelerating fleet replacement and streamlining their fleets to reduce costs. The current generation of airplanes enables airlines to achieve this objective while concurrently reducing their exposure to volatile fuel prices and making progress toward sustainability goals.
Over the past few decades, commercial airline productivity has increased by maximizing the number of seats per aircraft, increasing daily flight hours per airplane, and improving load factors.
Boeing forecasts that the number of middle-class households is expected to increase by approximately 500 million by 2042, with 90% of this growth occurring in emerging markets. Consequently, this projected increase in the middle class will contribute to the rising demand for air services.
Lower fares make air travel more accessible to people worldwide, and this accessibility has been a key driver behind long-term air travel growth outpacing economic growth. By 2042, the market share of low-cost carriers is expected to reach 41% of the single-aisle fleet.
Airlines are projected to acquire more than 42,000 new aircraft to fuel future expansion. The demand for regional jets is expected to predominantly replace the existing fleet, as an increasing number of airlines opt to retire regional jet fleets in favor of larger single-aisle aircraft with superior seat mile economics.
Regarding air cargo traffic, despite having higher cyclical volatility compared to air passenger markets, it has experienced long-term growth due to factors such as expanding e-commerce networks and evolving supply chains. Manufacturers and logistics firms are diversifying their supply chain strategies, with geographic diversification being a key approach to improve reliability and resilience. This shift is evident in the growth of air export volumes from manufacturing centers.
There is pent-up demand for freighter replacements, around 300 large and 200 medium widebody freighters are reaching retirement age while 700 older technology standard body freighters remain in service with an average age of 30 years. To streamline operations and reduce costs, many airlines are simplifying their fleets by phasing out specific aircraft families.
Boeing forecasts the commercial services market to reach a value of $3.8 trillion between 2023 and 2042. Fleet utilization and cycles serve as key drivers for the majority of Maintenance, Repair, Overhaul, and Modifications (MRO) activities, including Parts and Distribution Services. The MRO market represents nearly 70% of the total market value, with parts accounting for almost 58% within this specific segment.
North America is a prominent player in the commercial air traffic market, carrying over 900 million passengers annually. It boasts the largest domestic traffic flow and the largest long-haul flow to Europe.
In the context of Latin America and the Caribbean, air travel assumes a critical role as an indispensable service, primarily due to the geographical challenges that impede other modes of transportation.
Comments by the experts:
This market report represents an opportunity for the industry in general, as more airplanes will be required to manufacture, and processes in the sector will also increase its demand. We’ve seen the competitiveness of being near the OEMs of aerospace, close to Boeing, the top 3 revenue aerospace company worldwide, among other leaders in the list.
Tijuana now aims to carry aerospace suppliers worldwide to provide services for the region’s aerospace Tier 1 and Tier 2 companies. The supply chain regionally represents 15% in total, aiming to reach 20% or 25% at the end of 2025.
Regionally speaking, we consider 14 of the 15 top revenue companies of aerospace & defense, which explains why this region is so capable for the sector. And adding the increase of commercial flights for the future, as Boeing claims for 2042 with 42,000 aircraft, It will be necessary to work on a strategy.