COMMERCIAL AIRCRAFT MARKET ANALYSIS

Market Size and Trends

The commercial aircraft market is estimated to be valued at US$ 158.83 Bn in 2024 and is expected to reach US$ 245.79 Bn by 2031, growing at a compound annual growth rate (CAGR) of 6.4% from 2024 to 2031.

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The commercial aircraft market is witnessing positive trends with increasing passenger air traffic globally. Low cost carriers are driving the demand for narrowbody aircraft while oils continue to see strong orders from established airlines. While COVID-19 impacted commercial aviation, vaccination programs and renewed economic activities have fueled optimism among aircraft manufacturers and airlines. Orders for new fuel efficient aircraft models and expansion of fleets suggest that the long term outlook remains robust. However, supply chain challenges, geopolitical issues, and rising costs could impact the market growth in the near term.

Growing international trade and tourism

The international trade and tourism industry has experienced robust growth due to increasingly globalized supply chains and lower trade barriers. This has driven significant demand for passenger and cargo air travel between countries. Major economies with well-developed transportation infrastructure have become hubs for the movement of goods and people across borders. The expansion of middle-classes in emerging markets has also boosted discretionary spending on international leisure travel and business trips abroad. Carriers require new aircraft to meet this rising cross-border traffic and freight volumes. Additionally, low-cost carriers have emerged as an affordable option for locally-based flyers to travel within and between regions. This has expanded the overall commercial aviation customer base. Overall higher incomes and greater desire to explore other cultures have played a role in air travel becoming an integral part of the global trade and tourism ecosystem, helping drive the demand for widebody and narrowbody aircraft.

Market Concentration and Competitive Landscape

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As commercial aircraft fleets age, airlines are increasingly undertaking fleet replacement and modernization programs to reduce maintenance and fuel costs through the adoption of new-generation fuel-efficient planes. While some carriers extend the operational lives of older planes through refurbishment and component replacements, most full-service network carriers prefer replacing their oldest and least economical jets with new aircraft featuring state-of-the-art engines and aerodynamic designs. This allows substantial reductions in operating expenses through lower maintenance and fuel burn. Additionally, newer aircraft meet enhanced safety and emission regulations while providing enhanced passenger comfort and services. Low-cost carriers too are standardizing their operations around specific modern aircraft types to benefit from common pilot/crew training, inventories, and maintenance practices. Global aircraft fleet age profiles indicate a large number of aircraft built in the 1990s and early 2000s will need replacement in the coming decade. This is driving requirements for new narrowbody and widebody deliveries to support fleet revamp programs across Asia Pacific, North America, Europe, and other regions.

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Air travel demand has slowed due to economic uncertainties caused by trade wars and fears of recession. Aviation companies are also dealing with the grounding of Boeing's 737 MAX aircraft due to safety concerns, which has disrupted supply chains. Additionally, geopolitical tensions have increased risks for airlines operating in conflict zones. Environmental regulations are tighter with a push for more fuel-efficient planes, driving up costs of development and manufacturing.

Market Opportunities: Rising demand of air travel

Long-term prospects remain bright as passenger traffic is projected to double over the next 20 years. As more people begin to travel by air, especially in developing economies, the demand for new aircraft will continue. The demand for low-cost carriers is growing and requires new fuel-efficient planes. Technological advancements in automation, electric, and hybrid-electric aircraft may lower operating costs and emissions to boost opportunities.

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The passenger travel segment accounts for the vast majority owing 37.4% in 2024 of commercial aircraft utilization globally. This is due to the long term growth in the demand for air transportation of people worldwide, especially on domestic and international routes connecting major cities and countries.

Rising standards of living in emerging markets have lifted hundreds of millions out of poverty, increasing their ability to afford air travel for the first time. Meanwhile, low cost carriers have made flying accessible even to budget travelers in developed nations through unbundled fares and secondary airports. Liberalization policies have also spurred competition and new entrant airlines promoting heavily discounted tickets.

Businesses too have come to rely on airplanes for efficiently moving their employees, customers, and supply chain partners around large territories. International tourism has boomed as passport holding continues to spread, attracting record numbers eager to experience other cultures through air vacation packages. Online travel agencies now make flight and hotel bookings easier than ever before.

As this global air passenger market matures and gains new participants, aircraft manufacturers are focusing on designing planes optimized especially for consumer comforts on longer routes. While cargo traffic maintains important, it is the everyday movement of people that truly drives demand and the future outlook for the commercial jet industry remains closely tied to projecting population growth, income levels, and societal mobility trends.

Insights By, Size- Narrow Body Dominates the Size Segment Due to Cost Effectiveness and Flexibility

The narrow body aircraft segment accounts for the largest share owing 60.3% in 2024 of the commercial aircraft market by size. This is primarily due to narrow bodies being the most cost effective option for airlines operating short and medium haul routes. Narrow body aircraft like the Boeing 737 and Airbus A320 families can fly routes of up to 5,000 kilometers with higher passenger capacity than regional jets but at lower operating costs than wider aircraft.

This cost effectiveness comes from narrow bodies having a smaller fuselage size that requires less fuel and maintenance costs per flight. Their single aisle configuration also allows for faster turnaround times at airports. Moreover, spare parts and pilot training costs are lower due to the large fleets of narrow bodies in operation worldwide. Several airlines have entirely replaced older fleets with new fuel efficient narrow bodies to reduce trip expenses.

Narrow bodies are also very flexible for airlines to deploy on their route networks. With higher passenger volumes than regional jets but lower costs than wide bodies, they can profitably serve a wide range of shorter domestic and regional international routes. Airlines can easily add or remove narrow body flights to quickly adapt schedules according to demand fluctuations. This has kept narrow bodies first choice for the densest traffic flows within regions like Europe, Asia Pacific, and North America.

Newer narrow body models from Boeing and Airbus now have similar maximum ranges as older wide bodies while burning 15-20% less fuel. This has allowed even some longer thinner routes to now be flown economically by narrow bodies instead of larger aircraft. Further technological improvements are set to solidify narrow bodies' dominance of the short and medium haul market segments for the foreseeable future.

Regional Insights

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North America has dominated the commercial aircraft market for decades owing 47.3% in 2024 to a strong presence of major Original Equipment Manufacturers (OEMs) like Boeing and key industry participants across the value chain. The U.S. is home to the largest aircraft manufacturers, suppliers as well as airlines which has created a robust ecosystem driving the regional market growth. Majority of commercial aircraft orders are fulfilled by American companies which cater to both domestic as well as international carriers. This has established the region as manufacturing and technological hub for commercial aviation. The supply chain is highly integrated with components and engineering expertise available locally. Several aircraft assembly lines and manufacturing facilities are located across different states which ensures smooth production and delivery.

Asia Pacific has emerged as the fastest growing regional market for commercial aircraft in recent years. China especially has witnessed exponential air passenger traffic on the back of expanding economy, rising incomes, and growing international trade. This has fuelled the demand for new aircraft from Chinese as well as other Asian airlines. In order to capture this huge market opportunity, global OEMs have started setting up manufacturing plants and engineering centers to cater to the regional requirements. Original equipment manufacturers have also partnered with local component manufacturers to leverage low cost manufacturing and integrate them in global supply chain. This is significantly boosting production rates and lowering overall costs. Meanwhile, other Southeast Asian countries with major aircraft lessors and carriers like Singapore, Malaysia, and Indonesia are also emerging markets driving the overall regional commercial aviation growth.

The North America region continues to enjoy strong order pipeline from its airlines coupled with support from the government which is positively impacting the commercial aircraft industry. On the other hand, the Asia Pacific region is poised to surpass North America in the coming decade led by market expansion in China and other developing economies. Rapid infrastructure development and urbanization makes this region attractive for long term business prospects.

Market Report Scope

Key Developments

• In July 2022, AerCap Holdings is a company that specializes in leasing aircraft to airlines and other aviation companies. ordered five additional Boeing 787-9 Dreamliners, increasing its total orders to 125 aircraft, including those owned and on order. The fuel-efficient 787 Dreamliner family is supporting the sustainability and opening of new long-haul routes in the airline and aircraft leasing sectors.
• In September 2023, Air France-KLM is a major player in the airline industry, formed by the merger of two prominent European airlines, Air France and KLM. made a groundbreaking purchase of 50 Airbus A350 aircraft, covering both the A350-1000 and A350-900 models. With the additional 40 aircraft, deliveries are expected between 2026 and 2030, enhancing their fleet capabilities.
• In September 2023, Embraer is a company known for designing, manufacturing, and selling aircraft, primarily focusing on commercial, executive, and defense aviation. and FlightSafety International is a renowned company in the aviation industry, specializing in providing training services for pilots, aircraft maintenance technicians, flight attendants, and other aviation professionals. unveiled the latest Praetor full-flight simulator in Florida, U.S. which is expected to reach Europe by 2024. The Praetor 500 to 600 aircraft is highly advanced, according to Embraer, and the simulator is FAA-certified.
• In September 2023, following the mysterious disappearance of F-35 stealth fighter jets in South Carolina, the U.S., initiated an official investigation. The F-35 fighter jet is one of the most advanced and costly stealth aircraft in the U.S. military. The development took nearly 30 years, and the jet is capable of extended autopilot flights. 

*Definition: The commercial aircraft market consists of the designing, developing, manufacturing, selling, and leasing of large airplanes for transporting passengers and cargo by airlines and cargo carriers. Major manufacturers in this market produce a variety of commercial aircraft ranging from narrow-body jets used for short and medium-haul flights to wide-body jets used for long-haul international routes to turboprop airliners used for regional routes. Key players compete based on aircraft performance, passenger experience, operating costs, and environmental friendliness.

Market Segmentation

• Application Insights (Revenue, US$ BN, 2019 - 2031)
  • Passenger
  • Cargo
•  Size Insights (Revenue, US$ BN, 2019 - 2031)
  • Narrow Body
  • Wide Body
  • Regional & Business Jet
  • Freighter
• Regional Insights (Revenue, US$ BN, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Rest of Middle East & Africa
• Key Players
  • Boeing Company
  • Airbus SE
  • Embraer S.A.
  • Bombardier Inc.
  • Lockheed Martin Corporation
  • General Dynamics Corporation
  • United Technologies Corporation
  • Rolls-Royce Holdings plc
  • Honeywell International Inc.
  • Safran SA
  • Thales Group
  • Raytheon Technology