I’m John Persinos, editor-in-chief of Aircraft Value News. I’m also a contributing editor at Avionics International Report. Welcome to my latest video presentation, posted November 4, 2024. The accompanying article is a condensed transcript; watch my video for additional details and several charts.
The global aviation industry is experiencing a period of remarkable growth and prosperity, driven by a combination of rising passenger demand, increased airline profitability, and expanding aircraft fleets across the world.
As economies recover, pent-up travel demand is unleashing waves of new customers eager to explore both domestic and international destinations. Emerging markets are also seeing a surge in travel, with countries in Asia and the Middle East, in particular, increasing their share of global air travel.
This rise in demand is fueling substantial order backlogs for the global duopoly of Airbus and Boeing, as well as stimulating interest in innovative aircraft designs focused on fuel efficiency and sustainability. Some of the most advanced innovations are occurring in avionics technology.
Airlines are increasingly investing in fleet modernization to meet stricter environmental regulations and reduce fuel costs, creating a further boon for aerospace companies. New aircraft models, like Airbus’s A321XLR and Boeing’s 777X, are being developed to offer longer range and greater efficiency, aligning with airline strategies to meet evolving passenger needs while cutting operational costs.
However, Boeing continues to face notable challenges despite these tailwinds in the aviation sector. Let’s take a closer look at global aviation trends, from now and 10 years into the future.
The latest forecast from the International Air Transport Association (IATA) estimates that industry revenues will reach an all-time high of nearly $1 trillion this year. Nearly five billion passengers are projected for 2024, surpassing the 2019 count by over 400 million.
According to Precedence Research, the global aerospace market size will account for USD 373.61 billion in 2024, grow to USD 402.75 billion in 2025, and is projected to surpass about USD 791.78 billion by 2034, representing a robust compound annual growth rate (CAGR) of 7.8% between 2024 and 2034.
The report’s key takeaways:
These trends are boosting aircraft manufacturing. The new Aviation Week Commercial Fleet and MRO Forecast is considered the “gold standard” of aviation forecasts.
According to the 2025 version of the annual report, released to the public in late October 2024, more than 21,900 new commercial aircraft deliveries will occur worldwide over the 10-year 2025-2034 forecast period. Narrowbody types are projected to lead this growth, with the Airbus A320neo family outpacing the Boeing 737 MAX family.
Among all the new aircraft that are expected to be delivered between 2025 and 2034, 70% will be from the neo and MAX aircraft families.
The Airbus-Boeing duopoly will account for 91% of aircraft deliveries globally over the forecast period. The forecast reveals a 3.1% CAGR fleet growth during the period, with 44,600 aircraft in service by 2033.
We’re witnessing a significant shift, with Airbus increasingly pulling ahead of Boeing. This trend is expected to continue in 2025 and beyond, boosting the base values and lease rates of Airbus aircraft but weighing on those for Boeing aircraft.
From product development setbacks and safety concerns to a changing competitive landscape, Boeing’s troubles have allowed Airbus to consolidate its lead.
Boeing’s recent leadership changes, including the potential impact of CEO Kelly Ortberg, offer hope for a fresh strategic direction that could help address the company’s issues. However, the problems at Boeing run deep and Ortberg so far hasn’t implemented the radical cultural changes needed to turn around the beleaguered company. The new year will prove pivotal for Boeing.
Well, that’s it for now. I have more to say about global aviation trends, and their ramifications for aircraft base values and lease rates, in the latest issue of Aircraft Value News.
Thanks for watching. If you have any questions or comments, don’t hesitate to send an email to me at: [email protected].
