NEW YORK, Jan. 28, 2021
/PRNewswire/ -- By 2031, the global aviation fleet will be
smaller than once projected because of the impact of COVID-19, and
a decade of smaller fleets will mean constrained growth and
consolidation, according to Oliver
Wyman's Global Fleet & Maintenance, Repair, and Overhaul
(MRO) Forecast 2021-2031.
Airlines will not return to 2019 levels of operations until at
least 2022, with recovery in parts of the aerospace market
lagging by a year or two. For consumers, the slow recovery may mean
fewer direct and less frequent routes — at least until the pandemic
is under control and normal economic activity returns.
"COVID has created a long list of challenges never seen before
in modern commercial aviation," said Tom
Cooper, an Oliver Wyman vice
president and one of the authors of the report. "It will take the
next few years for the fleet to adjust and return to stable growth,
but even after 10 years, the industry will never fully regain all
that it has lost from the pandemic. Right now, with many airlines
still burning through millions of dollars each day, the focus must
be cash flow management."
At its lowest point during the pandemic, the global fleet had
only about 13,000 aircraft in service, less than half the number
flying in January 2020 as the
outbreak began to spread. Today, the 2021 fleet is up to more than
23,700 aircraft. By 2031, we forecast the fleet will number more
than 36,500. But it is still a far cry from pre-COVID projections,
which put the 2021 global fleet at 28,800 and the 2030 fleet at
more than 39,000.
Impact of less aircraft
Fewer aircraft flying means fewer planes need to be produced or
repaired. Given the inventory backlog of new planes that are built
but undelivered or unsold, more aircraft will be delivered to
airlines over the next several years than will be produced by
aerospace manufacturers. While production and deliveries are
closely aligned in normal years, this imbalance reflects
conflicting pressures on airframe manufacturers to balance the
realities of lower market demand with needs of key suppliers to
maintain enough production.
The impact of COVID on the MRO market will also be significant
-- both in the short and long terms. Short term, demand in
2020 and 2021 is expected to be 33 percent, or $60 billion, below pre-COVID projections for the
combined two years. Over the next 10 years, the industry will lose
more than $95 billion in revenue
compared with pre-COVID expectations.
Bright spots
Despite the challenges, there are some hopeful signs. Deliveries
of narrowbody aircraft are expected to hold up reasonably well,
with cumulative deliveries approximately 90 percent of pre-COVID
expectations over the 10 years. This class of aircraft tends to
carry under 200 passengers and is benefiting from their smaller
size, which makes them easier to fill during periods of lower
travel demand.
In contrast, widebody aircraft deliveries and production could
be as much as 40 percent below what had been predicted. This is due
to falloff in international and business travel driven by changing
corporate travel policies and government restrictions.
Despite significant short-term losses, the long-term outlook for
MRO is a bright spot. Aftermarket providers will begin to see
consistent growth over the mid and long terms, as the size of the
fleet expands and the overall age increases. This will drive
interest from private equity and other investors.
About the Global Fleet & MRO Market Forecast
The 2021-2031 edition of Oliver
Wyman's Global Fleet & MRO Market Forecast Commentary
represents our more than two-decade commitment to the understanding
and assessment of the commercial airline transport fleet and the
associated maintenance, repair, and overhaul (MRO) market outlook.
The commentary is the go-to resource of aviation executives—whether
a manufacturer, operator, or aftermarket provider, as well as for
those with financial interests in the sector through private equity
firms and investment banks.
This year's research focuses on the aviation industry's recovery
from COVID-19, subsequent growth and related trends affecting
aftermarket demand, maintenance costs, technology, and labor supply
after a devastating 2020. The outlook reveals significant
challenges the industry faces as it develops and expands its
recovery and rebound plans. An interactive tool also
accompanies the report for further exploration of the forecast.
About Oliver Wyman
Oliver Wyman is a global leader
in management consulting. With offices in 60 cities across 29
countries, Oliver Wyman combines
deep industry knowledge with specialized expertise in strategy,
operations, risk management, and organization transformation. The
firm has more than 5,000 professionals around the world who work
with clients to optimize their business, improve their operations
and risk profile, and accelerate their organizational performance
to seize the most attractive opportunities. Oliver Wyman is a business of Marsh &
McLennan Companies [NYSE: MMC]. For more information, visit
www.oliverwyman.com. Follow Oliver
Wyman on Twitter @OliverWyman.
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SOURCE Oliver Wyman