The in-service commercial airline fleet is forecast to grow from nearly 25,000 aircraft at the beginning of 2017 to over 35,000 by 2027. Aircraft deliveries to airlines will total about 20,000 over the period, so retirements of older technology will accelerate to about 10,000 during that time. The accelerated rate of new aircraft deliveries will result in a massive technology shift over the period. By 2027, 58% of the fleet will be new-generation aircraft.
Meanwhile, the retirement of aircraft will remain brisk. Small regional jets and narrow-bodies have been the predominant source of aircraft retirements, resulting in a surprisingly young retirement age of about 18 years. However, with many of these smaller-capacity aircraft now purged from the fleet, the industry can expect retirement ages to climb again as retirement selections will naturally revert to older, larger-capacity aircraft. The significant increase in retirements will continue to fuel the growing Used Serviceable Material (USM) market. Increased USM has the potential of reducing material costs for airlines and the Maintenance, Repair, and Overhaul (MRO) sector.
Net fleet growth by world region will be uneven, resulting in changes in regional size rankings over the period. The major growth engine will be Asia, especially China and India, which will become the largest region, nearly doubling in in-service fleet and related MRO demand. By contrast, North America will experience little absolute growth, although there will be a significant upgrading of the fleet over the period. North America will slip to the third-largest region, behind Asia and Europe.
Fleet mix will change appreciably over the period. Narrow-body aircraft will grow faster than the other classes. The regional jets and turboprop fleets will shrink in their share of the fleet, while wide-body aircraft will hold flat. By 2027, the shifts will result in a narrow-body share of 65 percent and wide-body share of 21 percent, while the smaller regional jet and turboprop fleets will slide 10 points to a combined 14 percent share.
New-generation aircraft (designed and built after 2000) are introducing improved operating costs and new technology that will require significant investment.
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Full Article: Oliver Wyman
Source : Oliver Wyman