Global Airline Fleet Will Grow Almost 50 Percent By 2029 According To Oliver Wyman

Jan 30, 2019

New Report Examines What Unprecedented Growth Means for the Industry

New York...The global aviation industry is experiencing unprecedented growth, with the worldwide fleet slated to expand 42 percent as China becomes the largest market for air travel due to a growing middle class. In 2029, the total fleet will be 39,175 aircraft, an increase of 11,600 from 2019, according to Oliver Wyman’s Annual Fleet & Maintenance, Repair and Overhaul Report (MRO) Forecast.

"With the expected growth in the industry, we are seeing participants in all sectors of the market evaluate their positions and many are making investments.  This ranges from airlines re-entering or building up repair and overhaul, to independent MROs expanding capacity, to OEMs acquiring and building out aftermarket services.”

The report provides a 10-year outlook for the commercial airline transport fleet and MRO market and can be viewed here. Key findings include: 

Changing Fleet

  • The majority of the fleet expansion will be narrowbody jets, such as Boeing’s 737 MAX and Airbus’ A320neo, increasing from 58 percent to 66 percent by 2029.
  • Narrowbody jets will replace regional jets and turboprops because they are more economically attractive and a better fit the business model of low-cost carriers.
  • As the global fleet grows, the average age of the aircraft will vary among regions.  For example, North America, Western Europe, Latin America, and Africa will see the age decrease. While fleets in China, India, Eastern Europe and Asia Pacific will see the age increase as aircraft stay in service longer to meet increased demand.
  • Decisions to keep older planes in service have slowed airline efforts to cut greenhouse gas emissions and reduce jet fuel consumption – at a time when fuel prices are climbing which puts pressure on profits.

MRO Market

  • The MRO market that supports the global aviation is also expected to grow. Total MRO spend is expected to rise to $116 billion by 2029, up from $81.9 billion in 2019.
  • Latin America MRO is expected to slightly exceed the market average, with 3.2 percent growth annually. The region is forecast to increase MRO spend by $1.5 billion, reaching $5.6 billion by 2029 and representing almost five percent of the global MRO market.
  • The Middle East, currently the fourth-largest MRO demand market in the world, will be surpassed by China and fall to fifth by 2024. The drop will be from rapid growth in China. By 2029, the Middle East will add $4.1 billion in MRO spend and represent more than 11 percent of the global market.
  • Outside of deliveries, aircraft are also sold between regions, and this migration of jets is another way that regional fleet size changes. That said, Africa is the only region where a significant percentage of fleet growth—about 75 percent—is the result of migrations.

“The airline industry has enjoyed five years of growth and strong profitability, and OEMs are currently challenged to deliver enough new aircraft to meet demand. Therefore, there is limited additional upside on top of our forecasted fleet and MRO growth baseline. Conversely, growth could be challenged by rebounding fuel prices, rising interest rates, tariffs, economic recession, and/or political disruption. Collectively, these factors represent more downside risk to the current forecast, which is inherently strong.”

In conjunction with the Global Fleet & MRO Market Forecast 2019–2029, Oliver Wyman also conducts an annual survey on hot topics, critical issues, and new opportunities in MRO. The annual MRO Survey will be released on April 8th.

About the Forecast

Oliver Wyman’s Global Fleet & MRO Market Forecast Commentary 2019–2029 marks our firm’s 19th assessment of the 10-year outlook for the commercial airline transport fleet and the associated maintenance, repair, and overhaul (MRO) market.  The forecast is one of the most credible go-to reports for many executives in the aviation industry as well as for those with financial interests in the sector, such as private equity firms, investment banks, and investment analysts.

About Oliver Wyman

Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 5,000 professionals around the world who work with clients to optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. For more information, visit Follow Oliver Wyman on Twitter @OliverWyman.