Aircraft sales and fleet management have always been closely tied together and both have overcome numerous obstacles over the past several years to reach pre-pandemic levels with plenty of growth forecasted over the next decade as aviation takes off again.
“By the beginning of this year, global aviation had recovered much of the territory it lost to the COVID-19 pandemic — despite 2022’s widespread labor shortages, the Russian invasion of Ukraine, COVID-19 lockdowns in China, inflation, and dysfunctional supply chains,” said the OliverWyman “Global Fleet and MRO Market Forecast 2023-2033”. “The global fleet is at 98 percent of where it was pre-pandemic, airlines are returning to profitability, and aerospace manufacturers are gearing up for their most productive years yet.”
Meanwhile, the report said that aviation’s global aftermarket, which provides maintenance, repair, and overhaul (MRO) services to keep the fleet flying, will expand by 18 percent in 2022.
“It’s anticipated to grow 22 percent this year, topping $94 billion — a mere 2 percent below its 2019 peak. By 2033, it will reach $125 billion — a compound annual growth rate of 2.9 percent,” read the report summary. “Meanwhile, we expect a record number of aircraft deliveries over the next 10 years, despite current supply chain constraints that will make it hard to meet this year’s targets.”
Aircraft sales and fleet management growth is being driven by the return to air travel around the world.
“Total global capacity for the year has not quite recovered to the levels seen pre-pandemic (it's expected to finish up at 5.5bn, which will be 3.7 percent down on 2019), but strides were made in 2023 as those countries still maintaining travel restrictions through 2022 started to ease the rules,” reported OAG Aviation Worldwide Limited. “The overall theme of this year's airline data is one of growth and recovery, and while we hope soon to be in a position to stop comparing to 2019, the data will always tell a story.”
The OliverWyman report predicts that the worldwide commercial aviation fleet will expand 33 percent to over 36,000 aircraft by 2033 — a compound annual growth rate of 2.9 percent.
“Today the fleet numbers almost 27,400, just short of its size in January 2020 — the last month before COVID-19 changed the economy and everyday lives around the globe,” said the Global Fleet and MRO Market Forecast 2023-2033 report released in February 2023.
The OliverWyman report says there are still hurdles over the next decade that must be overcome for aircraft sales and fleet management to grow successfully.
Obstacles include:
OliverWyman: “Some of their biggest suppliers have already suggested the elevated production may be beyond what they and the rest of the supply chain can handle.”
OliverWyman: “While it has been overshadowed by more immediate pressures like COVID-19, labor shortages, and the supply chain, it will likely become a more important issue for aviation to tackle as the decade progresses.”
Despite these obstacles, OliverWyman forecasts the following growth over the next decade:
OliverWyman says the math is simple: more planes, more flying, more MRO.
The MRO forecast for the next decade:
MRO growth is projected to grow fastest in India (12.4 percent), Eastern Europe (7.1 percent), China (6.9 percent), the Middle East (4.9 percent), Africa (3.9 percent), and Latin America (3.0 percent).
Asia Pacific and North America are both projected at a more modest 1.8 percent growth with Russia at 1.1 percent and Western Europe a near stagnant 0.2 percent.
“While this represents a solid recovery, the MRO market faces challenges after three rocky years of pandemic, an overwhelmed supply chain, inflation, and the Russian war against Ukraine. Like the rest of the global economy, the MRO sector struggles with labor shortages and supply chain disruptions — two major capacity constraints just as deferred maintenance comes due on fleets back in service,” said OliverWyman.
OliverWyman sees the following strains on the MRO sector:
“Aircraft utilization is a primary driver of demand for MRO services — except for airframe maintenance that typically corresponds to calendar checkups. The engine, component, and line segments are tied to the hours flown and cycles aircraft operate,” said the OliverWyman report. “That means that market size and growth largely depend not only on the number of aircraft in service, but also on how these aircraft are being operated. But while utilization per individual aircraft has grown faster than the fleet, the recovery in total flight hours and cycles has still lagged fleet recovery and utilization, which translates into a slower MRO comeback.”