In this “fast facts” video snapshot, John Persinos examines a new report, Market Outlook, 2025-2044, recently disseminated by the International Bureau of Aviation (IBA Group), a provider of aviation advisory services to commercial and business aviation operators, including aircraft/engine manufacturers and airlines.
The report’s key takeaways:
- Over the next 20 years, IBA projects that the global economy will expand 1.6 times to reach US$ 142 trillion in real terms. This will result in origin-destination (OD) traffic doubling to 8.5 billion passengers by 2044. Unsurprisingly, based on population and middle-class growth, the APAC region is a key driver for global traffic and accounts for almost half of all OD demand. This will be fueled by high-growth markets such as China and India.
- To achieve this, IBA forecasts that the global passenger commercial fleet will grow at a compound annual growth rate (CAGR) of 2.7% to 2044. That will take the current fleet of 30,500 aircraft to 51,500 by the end of the forecast period. From a regional standpoint, the APAC fleet is expected to observe the strongest growth at a CAGR of 4.5% to 2044. Middle East, Latin America and Africa will see more moderate fleet growth rates ranging from 2.6%-4.1%, while the North American and European fleets will see softer fleet growth at 1.1% and 1.2% respectively. The industry will need to supply 45,000 new passenger aircraft over the 20-year horizon.
- Of that number, 21,000 (47%) will contribute to growth, and 24,000 (53%) will be for replacement. In determining these figures, IBA has considered the constraints of the near-term supply chain and take a moderately conservative view of OEM ramp-up targets. While it’s IBA’s opinion that passenger deliveries are set to recover to 2018 levels by 2026, it will take until the end of the decade before the industry can achieve an annual delivery rate of 2,200 aircraft.
- The global airline earnings before interest and taxes (EBIT) margin is expected to remain broadly stable at 6.8%-7.0% through 2027.
- The share of new-generation aircraft, currently at 26%, is projected to increase to 50% by 2030 and 75% by 2038. As a result of this, the current generation will see their share of the global fleet contract to 30% by 2035, from 62% today.
