Airbus expects services to grow faster than aircraft deliveries

October 06, 2022, © Leeham News: Airbus today presented its 20-year Global Services Forecast (GSF) for the global airliner industry. It is a complement to the Global Market Forecast (GMF) for aircraft that Airbus presented in July.

Services business for the 100+ seat airline market grows from $105 billion pre-COVID to $232 billion by 2041, an increase of 221% or CAGR (compound annual growth rate) 3.7%, figure 1.

Figure 1. The growth of services to the global air transport market of more than 100 seats. Source: Airbus.

The services market is growing faster than aircraft deliveries

Airbus Global Services Forecast (GSF) complements the aircraft market forecast, predicting growth from 23,000 airliners in flight today to 47,000 in daily flight by 2041, Figure 2.

Figure 2. Airbus Global Market Forecast (GMF) for the 100+ seat aircraft market. Source; Airbus.

By 2041, 80% of aircraft will be single-aisle and 20% jumbo. The latest generation of airliners will represent 95% of the fleet after nearly 40,000 new deliveries replace older aircraft, Figure 3.

Figure 3. The airliner replacement curve over the next 20 years, according to GMF. Source: Airbus.

Passenger traffic (in RPK, Revenue Passenger Kilometers) increased by 3.6% CAGR during this period, and annual aircraft deliveries by 3.2% CAGR. Services related to this growing passenger and cargo market outpace them both, with a CAGR of 3.7%.

The effects of the COVID pandemic disappear faster than expected and we will return to a regular services market in late 2023 or early 2024. The effect of the pandemic will not be noticeable as the market will expand from 2022 to 2041.

The largest service markets shift from Europe and CIS and North America to Asia-Pacific during this period, Figure 4.

Figure 4. Regional growth of the services market. Source: Airbus.

Maintenance dominates the services market

The largest part of the services market is the maintenance of aircraft and their engines, figure 5. In fact, the order should be reversed; engine maintenance is the largest maintenance expense for airlines.

A growing component of the maintenance market is the dismantling and recycling of older aircraft. Airbus strives to facilitate this process both in the design of the aircraft and the methods to do it cleanly and to reuse up to 90% of the materials in the aircraft used. It includes reconditioned spare parts that return to the market. Today, the reuse of scrapped airliners is around 70%.

Figure 5. The three main service markets and their growth. Source: Airbus.

The Train and Operate market is currently under severe pressure as many flight, cabin and maintenance crew members have left the industry during COVID, as have other ground support personnel.

Traffic has returned faster than expected, with summer 2022 surpassing pre-pandemic levels for weekly flights in Europe and the CIS. Picture 6.

Figure 6. Weekly flights, comparing January 2020 to today by region. Source: Airbus.

Over the past 20 years, around 2 million people need to be trained for their roles in the airline industry, with almost 600,000 pilots needing training and certification as airline pilots, figure 7. This creates a training market for 30,000 air transport pilots (ATPL) per year.

Figure 7. Workforce training demand from 2022 to 2041. Source: Airbus.

In Train and Operate, the continuous improvement of airline operational efficiency through smarter and more efficient flights will enable us to achieve an additional 5% reduction in CO2 emissions.

An important part of the Enhance business is the refurbishment and upgrade of cabins over the 23 year life of an aircraft.

Examples of the types of services that will be required in 2041 are given in Figure 8. The more than 5,000 aircraft maintenance inspections are just the heavy checks carried out at mid-life for an airliner, also called checks D. The most frequent C controls, also based on hangars, are not included in these figures.

Figure 8. Examples of services provided by 2041 to support the 440,000 daily flight hours. Source; Airbus.

The 7,000+ engine checks are the shop overhauls needed to restore engine performance and replace Limited Life Cycle (LLP) parts. Spare parts for these overhauls are the main source of revenue for the aircraft maintenance business.

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