Market Research Report
North America Aviation Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
|North America Aviation Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)|
Published: April 21, 2021
Mordor Intelligence Pvt Ltd
Content info: 75 Pages
Delivery time: 2-3 business days
The North America Aviation Market was valued at USD 59.20 billion in 2020 and is projected to reach USD 100.99 billion in 2026 with a CAGR of 7.12% during the forecast period (2021-2026).
The United States, as of Q1 2021, was facing huge challenges due to the COVID-19 pandemic across all sectors. According to IATA, North American airlines' full-year passenger traffic fell 75.4% compared to 2019, making it the third-largest region after Asia-Pacific and Europe, in terms of passenger traffic. However, the passenger traffic has slowly started to recover, which is expected to help the revival of the commercial aviation sector in North America in the years to come.
The aviation industry in North America is matured and has the presence of several aircraft OEMs. The defense sector is benefitted mainly due to this fact, owing to the growing government investment in R&D and the procurement of advanced fighter jets, helicopters, transport, and trainer aircraft from the regional players.
The growing focus toward enhancing the infrastructure of private airports, along with favourable changes in regulations, may support the growth of the general aviation market in North America in the years to come.
Commercial Aircraft Segment is Expected to Grow with the Highest CAGR During the Forecast Period
Though the COVID-19 pandemic has affected the commercial airline industry in the country, airlines in the region are expected to be benefitted from strong domestic demand from the US, one of the largest domestic aviation markets in the world. This may result in an earlier recovery of the region's commercial airline industry. Airlines in the region have strong strategies in place and have restructured extensively, which is expected to help the recovery of the commercial airline industry in the region. Before the advent of the pandemic, airlines based in the United States and Canada have placed orders for several hundred aircraft, which are scheduled to be delivered during the forecast period. While airlines like Air Canada and Delta Airlines have canceled and deferred their aircraft deliveries to the latter half of the forecast period, American and United Airlines have started taking the deliveries of the previously ordered aircraft from the OEMs. United Airlines also plans to expand its fleet on a large scale during the forecast period, despite the impact of the pandemic on its operations. Cargo carriers based in the region are also expanding and modernizing their fleets aggressively. In July 2020, FedEx Express agreed to purchase 50 additional 767-300F aircraft from Boeing, as it continues to modernize its aircraft fleet. In addition to the 50 confirmed orders, FedEx also has options to purchase a total of 50 767F aircraft. In December 2020, ATR announced that FedEx Express received its first-ever purpose-built turboprop regional freighter. Six such aircraft per year will be delivered over the next five years. Such plans, along with the order deferrals to the second half of the forecast period, are expected to result in the growth of the segment with the highest CAGR during the forecast period.
United States is Expected to Dominate the Market During the Forecast Period
The United States is one of the largest aviation markets in the world. The passenger traffic to and from the United States has been increasing steadily before the advent of the COVID-19 pandemic. According to the Bureau of Transportation Statistics, in 2019, the US airlines and foreign airlines in US carried a total of 1,052.8 million scheduled service passengers, an increase of 3.9% from that of 2018. Though the COVID-19 has greatly affected the airline demand in the country, United Airlines, one of the largest airlines in the country, has continued to maintain a robust order book, with over 800 aircraft in its fleet and over 300 aircraft on order as of Q4 2020. The demand for air cargo increased in the United States in 2020. Correspondingly, the air cargo carriers in the country have ordered new aircraft to expand their fleet. In January 2021, DHL Express increased the number of 777Fs it had on firm order with Boeing by eight units and added options for four more. The resumption of the services of the Boeing 737MAX aircraft from December 2020 is expected to help Boeing, a local player in this region, as the aircraft was the fastest-selling airplane in the company's history. In December 2020, American Airlines started taking the delivery of Boeing 737 MAX aircraft, following the lifting of the type's grounding in the country. In the defence sector, the United States is expected to deliver steady growth over the next decade, as it is planning to replace its aging fighter jets with advanced jets. The US Marine Corps has plans to procure about 340 F-35B and 80 F-35C models that can replace the AV-8B Harrier II and the aging F/A-18 Hornet jets. The country is also modernising its transport aircraft fleet. In January 2020, Lockheed Martin Corp. said that it has been awarded a USD 3 billion order from the U.S. government for 50 C-130J transport planes. The aircraft will be delivered between 2021 and 2025. Such aircraft orders by the US military forces may continue to drive the growth of the aviation market in this region. In general aviation, though the COVID-19 pandemic has affected the business aviation operations, the renewed interest in charter flights to avoid contracting the virus is expected to drive the demand for general aviation demand in the short future. Also, charter services are also expanding their destinations from the United States and are offering flights at competitive prices to attract passengers during the pandemic, which is attributing to the growth of the market in the country.
The prominent players in the market are The Boeing Company, Airbus SE, Lockheed Martin Corporation, General Dynamics Corporation, and Textron Inc. The aviation market in North America is highly competitive due to the presence of several aircraft manufacturing giants. Also, as most of the aircraft manufacturing is concentrated in this region, several global aerospace suppliers have manufacturing, sales, and support facilities based in this region. The adoption of innovative methods, increasing products and service offerings, efficient workforce, strategic acquisitions of supply chain players, mergers, tapping into new markets, and competitive pricing are some of the growth strategies adopted by the established players to increase their dominance in the region's aviation market. Several North America-based aerospace manufacturers are collaborating with companies based in other parts of the world to share their expertise and technical know-how in developing new technologies and products. For instance, Boeing and Lockheed Martin have partnered with Bell over the years to develop tiltrotor aircraft. Such partnerships are expected to drive the growth of the players in the market.