Asia-Pacific Commercial Aircraft Market - Growth, Trends, and Forecasts (2022 - 2027)

The Asian-Pacific commercial aircraft market is projected to register a CAGR of more than 13% during the forecast period.

Post COVID-19 pandemic, the effect is expected to continue even during the forecast period. Passenger traffic is expected to recover completely in three-four years. However, the large-scale backlog with aircraft OEMs is expected to drive the market during the forecast period. In addition, passenger traffic numbers are expected to recover by 2024. Thus, the commercial aviation industry outlook for the latter half of the forecast period is positive.

The aviation industry's growth is projected to be the highest in Asia-Pacific, as the region is a significant hub for the aviation industry. The emerging economies in the region, like India and China, are experiencing a massive surge in their respective civil aviation markets due to an increased demand for air travel in these countries. Hence, the revenues from Asia-Pacific are projected to witness a high growth rate during the forecast period.

Furthermore, the demand for narrow-body aircraft is expected to recover faster than for wide-body aircraft, as domestic demand is expected to return to pre-COVID-19 levels earlier than the international passenger demand.

Key Market Trends

The Revitalization in Aircraft Orders and Deliveries is Driving the Market

In 2021 and mid-2022, air passenger traffic increased gradually globally, mainly owing to the robust vaccine programs in several regions, which helped the governments ease the air travel regulations. Domestic passenger traffic is recovering faster than the international market-especially in countries like China and India.

The gradual passenger traffic recovery drives airlines and aircraft operators to invest in fleet modernization programs. For instance, in May 2022, China Eastern issued new shares for fleet purchases. In its fleet plan for 2022 through 2024, China Eastern Group (including Shanghai Airlines and OTT Airlines) anticipates introducing 35 Airbus A320neo's, nine Boeing 787-9s, nine A350-900s, 28 COMAC ARJ21s, and five C919s.

Such aircraft fleet modernization and destination expansion plans of the airlines are leading to the gradual revival of aircraft demand, thereby strengthening the order books of aircraft OEMs like Boeing and Embraer. The existing order backlog with the OEMs is still high. By November 2021, Airbus reported a backlog of 7,036 jets. Boeing's backlog was 4,210 aircraft. These numbers reveal that despite the reduction in demand from the airlines, the deliveries of commercial aircraft are expected to continue at a healthy rate during the forecast period.

India is Projected to Exhibit the Highest Growth Rate in the Market

India is one of the fastest-growing aviation markets globally and has significant potential for growth in the future. Furthermore, an increase in the budget allocation for improving airport infrastructure and establishing new airports may support the growth of the aviation sector over the next decade.

Indigo is the largest airline in the country (in terms of passengers carried and fleet), and as of August 2021, the airline had a domestic market share of 57%. As of December 2021, Indigo operated a fleet of 274 aircraft, a mix of Airbus A320 family aircraft and ATR 72. The airline also has 561 aircraft on order. For instance, in May 2022, IndiGo retired 100 A320-200/CEO as fleet modernization was nearing completion. The airline started retiring aircraft in 2020, a move that was not impacted the fleet size owing to the airline's rapid introduction of modern replacements. In the last two years, the A321neo fleet increased from 10 to 58. The airline has been rapidly expanding its fleet over the past few years and did not slow down deliveries even during the COVID-19 pandemic (estimated that its fleet increased by more than 300% during the pandemic period) as it plans to expand seat capacity while attracting passengers at a lower cost per seat. In addition to expanding new domestic routes, the airlines are also planning to launch flight services to new international destinations following the ease of restrictions.

Furthermore, a new ultra-low-cost airline, Akasa Airline, also received the initial clearance from the civil aviation ministry to start the airline. The airline plans to have a fleet size of 70 aircraft by 2026. On this note, in November 2021, Alaska Airlines placed an order for 72 Boeing 737 MAX airplanes worth more than USD 9 billion at list prices. The order included a mix of Boeing 737-8 and Boeing 737-8-200. The deliveries of the aircraft are expected to begin in mid-2022.

Such robust aircraft procurement plans and planned aircraft deliveries during the forecast period are anticipated to propel the market growth in the country.

Competitive Landscape

The Asian-Pacific commercial aircraft market is a highly consolidated market, with prominent players dominating and controlling the industry entirely. Some prominent companies in the Asia-Pacific Commercial Aircraft Market are Airbus, The Boeing Company, Mitsubishi, and Comac (CAIC). Mitsubishi and Comac (CAIC) both plan to launch their regional jets sometime in 2022-2023 and hope to gain 200-300 orders during the forecast period as countries connect their non-metro and remote cities to the larger airports domestically. China and India are both leading in this market and are expected to be key consumers of regional jets during the forecast period. Companies are investing heavily in research and development to innovate new and advanced aircraft that may be safe and reliable. Such breakthrough technologies are expected to help the companies gain new contracts and increase their market presence.

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