Global Fleet And MRO Market Forecast Commentary 2019-2029

The aviation industry and the businesses that support it are experiencing another year of unparalleled growth, thanks to an expansion in the global population able to afford air travel. Rising incomes and consumer spending are pushing passenger travel to record levels and fueling the largest year-over-year increase of the in-service fleet since 2008.

Looking ahead a decade, air travel demand is anticipated to be equally robust, with an additional 200 million people expected to enter the middle class across the planet. Growth in revenue passenger kilometers (RPK) will regularly exceed the annual expansion of gross domestic product (GDP) in most economies—particularly in high-growth areas like China and India. Even amid global trade tensions, the projections for commercial air travel remain optimistic across all regions of the world.

Record Fleet Growth

Consequently, the persistent demand is spawning record growth in the global fleet. For the beginning of 2029, our forecast projects a total fleet of 39,175 aircraft, up more than 11,600 from the 2019 total of 27,492. Between 2019 and the beginning of 2024, we anticipate the in-service fleet will grow annually at 3.9 percent—a pace that will slow to 3.3 percent for the next five years.

The order book and the corresponding delivery schedule associated with this expansion are translating into significant business for the world’s leading airframe manufacturers, Boeing and Airbus. The bulk of the fleet expansion will be narrowbody jets, such as Boeing’s 737 MAX and Airbus’ A320neo. By 2029, nearly 13,800 737 MAX and A320neo aircraft will have been delivered, at which time narrowbodies will represent over two-thirds of the entire global fleet.

Global Fleet Forecast By Aircraft Class, 2019-2029

Source: Oliver Wyman

Trickle Down Expansion of the Maintenance, Repair, and Overhaul Market

With the expansion of business in the commercial aviation industry, the maintenance, repair, and overhaul (MRO) market that supports it is also expected to grow. Total MRO spend is expected to rise to $116 billion by 2029, up from $81.9 billion in 2019. Aside from the growth in the fleet, the increase will be driven by more expensive maintenance visits and technology enhancements.

The annual average growth rate for the MRO market will be 3.5 percent over the decade. More of this growth will take place between 2024 and 2029, when MRO spend will grow $19 billion versus $15 billion between 2019 and the start of 2024. The slower initial five years will be driven by the escalating number of newer-generation aircraft that enter the fleet. These aircraft have longer maintenance intervals and replacement thresholds for such things as life-limited parts than older jets.

Growth in aviation will be more concentrated in Asia and the developing world, particularly China and India. By 2035, the Civil Aviation Administration of China projects, the number of airports in the nation will almost double, reflecting this spike in demand and the government’s big push to fund the necessary infrastructure. By the end of the decade, China will become the biggest global market for air travel and Asia will be the new center of global aviation activity.

Growth of MRO Spend, 2019-2029

Source: Oliver Wyman

The Evolution of the Global Fleet

Explore how the various aircraft fleets will change from 2019 through 2029 across the world's regions.

1Where will the aviation industry expand the most over the next decade?

A burgeoning middle class in Asia, especially in China and India, is generating more demand for air travel, which over time will shift the distribution of the global fleet. Besides buying aircraft, China and other Asian nations are also investing in new airport infrastructure and in aircraft manufacturing and aftermarket MRO services to accommodate the rising demand, much of which will be for domestic travel. As a result, Asia is likely to be responsible for a bulk of the growth in the global fleet and MRO expenditures. By the end of the decade, China will become the biggest global market for air travel, and as a region, Asia is expected to increase its share of the global fleet by almost nine percent.
2How will the growing percentage of new-generation aircraft affect airline operators financially and operationally?

As new-generation aircraft comprise a larger portion of the global fleet, airlines will see benefits from their operation. Between 15 and 20 percent more fuel efficient, these new aircraft can cut expenditures on jet fuel and potentially improve profitability. This becomes particularly helpful if fuel prices start to rise again. Improved fuel efficiency will also help carriers reduce greenhouse gas emissions. Aside from savings on fuel, new-generation jets with advanced technology and sophisticated avionics will provide airlines increased operational flexibility and improved productivity.
3What does the future look like for regional jets and turboprops?

Despite multiple new regional jet platforms entering service over the next few years, these aircraft classes will play a much smaller role in the global fleet moving forward. The operational flexibility and fuel efficiency of new-generation narrowbodies make them the class of choice for many different types of operators.
4As demand pushed manufacturers to increase production schedules, what was the impact of delays in deliveries of new-generation aircraft?

Delays in deliveries of new-generation aircraft prompted airlines to keep older planes in service longer than anticipated. As a result, retirements grew very slowly in 2018. In fact, many operators were forced to pull aircraft out of storage to accommodate demand. Adjustments in retirement schedules related to spikes in demand affected fuel use by airlines as the newer jets would have been more fuel-efficient and produced fewer greenhouse gas emissions. These decisions also trickled down to the aftermarket where MRO demand rose to handle the higher servicing needs of older aircraft.
5How does the addition of new-generation planes affect MRO spend?

As new-generation aircraft like the 737 MAX and A320neo enter service and replace older aircraft, there will be a slight deceleration in global MRO spend over the short-term. Equipped with the newest engine technology, these engines are expected to have longer intervals between shop visits. That said, the new technology and life-limited parts on newer aircraft will be more expensive to service and replace once needed, which will push MRO spend higher over time.

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. We’re proud that this annually produced research, along with our Airline Economic Analysis (AEA), has become a staple resource of aviation executives—whether in companies that build aircraft, fly them, or work in the aftermarket, as well as for those with financial interests in the sector through private equity firms and investment banks.

This research focuses on airline fleet growth and related trends affecting aftermarket demand, maintenance costs, technology, and labor supply. The outlook reveals significant changes that are important to understand when making business decisions and developing long-term plans.

Analytical topics covered include:

Economic GDP and traffic data (measured in revenue passenger kilometers or RPKs) by geographic region and specific countries
Historical financial performance (load factors vs return on invested capital, jet fuel spot prices, industry profitability)
Passenger and cargo traffic, and airport infrastructure growth in select markets
In-service fleet, retirements, orders, conversions by aircraft class (wide-body, narrow-body, regional jet, and turboprop)
Global aircraft fleet forecast and regional fleet growth rates
MRO market forecast by segment (line, component, engine, airframe) and aircraft platform spend
Forecast sensitivity analysis based on economic health, traffic, fuel prices, and interest rates