Global services market set to double over the next 20 years
The world's passenger aircraft fleet above 100 seats is set to more than double in the next 20 years to over 40,000 aircraft as traffic is set to grow at 4.4% per year, according to Airbus' latest Global Market Forecast 2017-2036.
This forecast predicts that over the next 20 years the total industry aftermarket services spend will reach around $3.2 trillion. The services market is mainly driven by MRO, which for aircraft above 100 seats will represent 1.85 trillion over the next 20 years. Training, cabin and systems upgrades are also major contributors to the overall services market.
MRO is the largest activity represented under services market and is expected to double in the next 20 years. On an annual basis, Airbus predicts that the MRO spend will grow from $60 billion to over $120 billion per year; For this segment, there will be a necessity to manage mixed-fleet with ageing aircraft and new technologically advanced aircraft. In addition, the development of low-cost-carriers (LCCs) will further drive outsourcing strategies to allow airlines focusing on their core business of transporting their passengers. Asia Pacific will see the largest growth in MRO demand over the period.
As the world fleet grows, so does the need for more pilots and technicians: Over one million pilots and technicians to be trained over the next 20 years, according to the forecast. Airbus has already tripled the number of its global training locations in the last three years and will continue to grow to propose tailor-made solutions to customers, right on their ‘doorstep’ while integrating latest technologies and web-based solutions.
Airbus projects that over the next 20 years the upgrade market will be worth $180 billion, driven in part by high competition between airlines who value the ‘passenger experience’ as a differentiator (e.g. comfort and connectivity), as well as systems upgrades. Notably, 38% of this market will be Asia Pacific.