The next decade will be more challenging for the aviation industry than the past 10 years, despite prospects for rising passenger demand, according to Oliver Wyman’s annual Global Fleet & MRO Forecast.
By the beginning of 2030, the global fleet is expected to grow at a compound annual growth rate (CAGR) of 3.4%, to over 39,000 aircraft annually. This growth is despite looming challenges such as slower economic expansion, increased congestion in the air and at airports, trade-related issues, and pressure on the industry to address climate change more actively. The fleet growth will also fuel increased demand for maintenance, repair and overhaul (MRO) services.
In the short-term, the industry is also facing potential impacts from the rapidly spreading coronavirus, as well as the grounding of the Boeing 737 MAX. While in last year’s report, we expected 1,400 B737 MAX aircraft to be in service around the world by 2020, the 2019 grounding and subsequent production halt will reduce that number to somewhere between 150 and 700, depending on when the aircraft passes re-certification requirements, is cleared for service, and pilots are trained on any new updates.
Even with these challenges, along with some expected slowing in the growth rate of passenger demand as well as changes in the mix of traditional freight and ecommerce freight, the industry should still see solid fleet growth in both passenger and freighter aircraft over the next 10 years. Manufacturers will produce over 21,000 aircraft, at an annual average of 2,100, which is more than 30% above production for the previous decade, and demand for MRO is expected to expand by 3.7% CAGR over the next 10 years.
In terms of aircraft class, narrowbodies will see the most growth at well over 5%, which is more than any other class. Additionally, the engine category will continue to be the primary driver of overall MRO market growth.
In-service fleet forecast:
- Globally, the fleet will grow at an average of 3.4% annually, with Asia driving most of the growth. China’s fleet is expected to double in size by 2030.
- The global fleet is relatively older than ever before. Currently, there are 2.5-times more aircraft over the age of 25 in use than in 2010. In the next decade, there will be an increase in retirements compared to the previous 10. The B737 MAX and A320neo will represent most of the new aircraft deliveries, despite the current issues facing the MAX.
- The global aging fleet will have a positive effect on MRO demand – pushing it to US$130 billion in 2030 from US$90 billion in 2020, an average annual growth of 3.7%. Engine MRO is the largest and fastest growing segment.
- MRO demand will continue to be concentrated in the top 10 types of aircraft (85%), but by 2030 the A320neo and B737 MAX will represent two of the four largest platforms by MRO demand.
- The impact of the B737 MAX grounding and corresponding production pause will have effects on MRO demand and will be first seen two to three years down the line when the first round of heavy maintenance is due.
- A significant number of factors are contributing to a riskier outlook for Europe, including concerns about climate change, Brexit, and financial troubles of some airlines.
- The B737 MAX challenges have had a significant impact on the in-service fleet forecast. By the beginning of 2022, there will be between 30 and 45% fewer MAXs in operation than expected at the start of last year.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 60 cities across 29 countries, Oliver Wyman combines deep industry knowledge with specialised expertise in strategy, operations, risk management and organisation transformation. The firm has more than 5,000 professionals around the world who work with clients to optimise their business, improve their operations and risk profile, and accelerate their organisational performance to seize the most attractive opportunities.