European Commercial Outlook
Transcript of European Commercial Outlook
European Commercial Outlook2022 Fleet & MRO Forecast
October 2021
1
Brian R. Kough, Senior Director, Forecasts & Aerospace Insights
Intelligence & Data Services | Aviation Week Network Washington, D.C.
Information Classification: General
Economic Impact of COVID-19
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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
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Most severe global economic contraction since the second world war with all regions affected.
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GDP Change 2020 2021
Asia Pacific -1.0% 6.9%
Europe -5.2% 4.5%
Latin America -7.3% 5.2%
Middle East -2.9% 3.7%
United States -3.5% 6.1%
COVID-19 pandemic has caused GDP to contract in all regions but Asia and North America have outperformed other regions.
Global GDP fell by 1.5% in 2009 due to the 2008 financial crisis. In 2020, it is expected to fall by 5.1% due to COVID-19.
Most severe global economic contraction since WWII with all regions affected, strong recovery expected.
Information Classification: General
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Scheduled & Historic Available Seat Kilometres – By Region
Analysis: Airport Strategy & Marketing (ASM) Consulting, Aviation Week Network
RegionQ4
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YearJan-Dec
2021 vs. 2020 % Change
Europe 116% 20%
Asia-Pacific 49% -14%
U.S. & Canada 77% 32%
China 14% 19%
LATAM & Caribbean 79% 37%
Middle East 84% 12%
Africa 75% 29%
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Middle East
Africa
Scheduled airline capacity through December 2021 (as of 7 October 2021)
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Asia-Pacific China Europe Latin America Middle East North America
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Wuhan lockdown
Recovery strengthened in Europe, Latin America, Middle East and North
America. China saw utilization decline dramatically in February & August before
climbing back.
Utilization Change – RegionIndexed flight hour utilization for commercial aircraft fleets by operator region vs. July 2019
Source: AWIN Flight Tracking Data, Copyright 2021
EU / US lockdown
Information Classification: General
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Hours Cycles5
Aircraft Utilization – Major European AirlinesUtilization rates in hours and cycles for major European airlines, including LCCs – January to August 2020
Wuhan lockdown
Europe / US lockdown
Hours fell by 81% and cycles 84% in the month following the Europe / US lockdown.
Recovery in hours and cycles underway since
March 2021 has gathered pace in August.
As of August, flight utilization stands at
around 30% below pre-pandemic levels.
Source: AWIN Flight Tracking Data, Copyright 2020
Information Classification: General
Aviation Week Network Forecast
Global annual deliveries historical & forecasted
Forecast: New Deliveries Commercial Aviation
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
• 20,000+ worldwide deliveries over 10-year 2022-31 period.
• Narrowbodies lead recovery efforts, 77% share of deliveries – Airbus A320 outpaces Boeing 737.
• MAX delivery status since MCAS grounding March 2019: 143 delivered to date out of 447 built, 304 awaiting final delivery.
• Wildcards: A220-500, Boeing 5X, Embraer CPX, 777X & A350 freighters.
1,821
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Highlights
Narrowbody77%
Widebody14%
Regional Jet5%
Turboprop4%
2022-31 Share of Deliveries
737 MAX Re-certified
Information Classification: General
Aviation Week Network Forecast
-803
-688
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% ActiveFleetRetirements
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NorthAmerica
WesternEurope
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EasternEurope Africa
LatinAmerica
MiddleEast China India
Regional Retirements 2022-31
Forecast: Aircraft Retirements
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Annual retirements historical & forecasted
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
665 average/year 2.2% of the fleet
2015-21
• Retirement projections top out at 1,180 in year 2029.
• Contrary to impressions, 2019 & 2020 were NOT record years.
• Historic high percentage of fleet rates dominate the 2H decade.
• Used spare parts/green time engines may flood markets for popular legacy types depressing pricing.
~10,700 retirements over 2022-
2031
Up ~500 previous period
Boeing 767 and Others Await Recycling
1,025 average/year 2.8% of the FleetForecast 2022-31
Credit: Nigel Howarth, Aviation Week
Highlights
Information Classification: General
Aircraft forecast returns from long-term storage post-pandemic
Aircraft Returning from Storage
8Source: 2022 Commercial Aviation Fleet & MRO Forecast, Fleet Discovery, Aviation Week Network, Copyright 2021.
Long range widebody fleet will see the slowest return to service with aircraft gradually leaving storage
over the next five years.
Highlights
• 12k aircraft stored in May 2020, 6.7k in July 2021.
• Almost two thirds of the aircraft returning from storage in the forecast period will return by the end of 2022.
• International travel associated with widebody aircraft will be the slowest to return to active service.
• Through the first three years of the forecast, a total of over 3,100 aircraft are expected to return from storage as passenger demand increases.
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Single Aisle Twin Aisle Regional Turbofan Turboprop
Historical Commercial Aircraft In Storage
Jan 2020 3,096
Feb 2020 3,631
Mar 2020 10,062
Apr 2020 11,749
May 2020 12,057
Jun 2020 11,152
Jul 2020 9,641
Aug 2020 9,302
Sep 2020 9,065
Oct 2020 8,907
Nov 2020 8,773
Dec 2020 8,501
Jan 2021 8,656
Feb 2021 8,727
Mar 2021 8,389
Apr 2021 8,014
May 2021 7,561
Jun 2021 6,923
Jul 2021 6,404
Aug 2021 6,069
Information Classification: General
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Aircraft In Service Aircraft Parked Aircraft Parked/Reserve
Historic In-Service Active AircraftCommercial jets and turboprop aircraft in-service, by month (includes parked, excludes stored)
Air
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Wuhan lockdown
Source: Fleet Discovery, Aviation Week Network, Copyright 2021
Long range widebody fleet will see the slowest return to service with some aircraft
gradually leaving storage over the next 1-3 years.
10%, (-3k) fewer active aircraft than December 2019.
Commercial aircraft in-service seeing a gradual but steady recovery since June 2020.
15% parked or parked/reserve of the current, active in-service fleet by flight
activity observed vs. 26% parked in March 2021.
New York lockdown
Note: In-service totals for months prior to Sep 2021 include parked and parked/reserve aircraft. Excludes stored aircraft
Peak ISF
Lowest ISF
Credit: Brian Kough
Credit: Mike Hopwood
26,990ISF
Credit: Nigel Howarth
Information Classification: General
Aviation Week Network Forecast
29,581
32,58633,465
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2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Aircraft
Forecast3.1% CAGR 2022-31
2.9% CAGR 2015-19
737 MAX Re-certified
Annual count of active commercial aircraft, historical & forecasted
Forecast: World Trends In-Service Aircraft Fleet
10Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
• 3.1% future CAGR expected after 2.9% historical fleet growth.
• Pandemic influences: return from stores (3-4k), P2F freighters (1K). In May 2020, 12k aircraft were in storage!
• In-service fleet in mid-2021 recovers to more than 29,000 aircraft in line with 2015 levels.
• Narrowbodies are key growth driver over decade: MAX recertified + A320s take delivery lead.
Highlights
-78%-77%-60%
-39%-39%-36%-30%-24%
3%9%13%23%
44%67%84%
128%312%
A380
757
CRJ
EMB135/140/145
747
DHC-8
767
DHC-6
A330/340
ATR 42/72
ERJ Family
777
737
A320
787
A350
A220
ISF % Change for Select Aircraft
Information Classification: General
CFM Interntional
57%Pratt &
Whitney
22%
General
Elertric
10%
Rolls-Royce
6%
Pratt & Whitney Canada
4%
Powerjet
1%Perm
0.2%
Forecast: New Build Engine Deliveries: 2022-31
11Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2020.
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CFM’s LEAP engine alone is projected at over 23,000
engine deliveries.
CFM International engines account for 57% of all engine deliveries (not
including spares…)
Aircraft Family Engine Model
737 Max LEAP-1B
A320neoLEAP-1A
PW1100G-JM
MC21PD-14
PW1400G
A220 PW1500G
ERJ175-E2 PW1700G
ERJ190/195-E2 PW1900G
C919 LEAP-1C
ARJ21 CF34-10A
SUPERJET SAM146
ERJ170/175/190/195 CF34-8E
A350 Trent XWB
787GEnx-1B
Trent 1000
A330neo Trent 7000
Credit: Guy Norris, Aviation Week
Information Classification: General
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Airframe Heavy Modifications Line Maintenance Components Engine Maintenance
MRO Demand - AnalysisGlobal MRO aftermarket and the impacts from the pandemic
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
2022-313.2% - Overall MRO Demand CAGR3.7% - Engine MRO Demand CAGR
• MRO grows at 3.2% CAGR 2022-31, worth $1.013 trillion, without inflation.
• Engine MRO demand is $474 billion over decade and grows at 3.7% CAGR. Green time/USM influences…
• Components MRO grows fastest at 4.2% CAGR.
• Airframe work expected to be cyclic.
• Recovery rates vary by region, role, and by aircraft category (NB, WB, regionals, turboprops, etc.)
Highlights
Engine Maintenance
47%
Components21%
Line Maintenance
20%
Modifications7%
AirframeHeavy
5%
Pre-COVID-19 Forecast
Information Classification: General
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$ B
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Africa Asia Pacific China
Eastern Europe India Latin America
Middle East North America Western Europe
MRO Demand by Region & Aircraft Category
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Fleet Discovery, Aviation Week Network, Copyright 2021.
Single
Aisle
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Regional
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Turboprop
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By Aircraft Category (2022-31)
RegionMRO Demand
2022-31Share
North America $220.5 B 22%
Western Europe $195.5 B 19%
Asia Pacific $184.9 B 18%
China $132.1 B 13%
Others $280.2 B 28%
• North America alone is expected to generate $220.5 billion.
• Fastest growth in China and Asia-Pacific; expected to expand at a 4.3% and 5.7% CAGR respectively.
• Eastern & Western Europe combined generate a total of $252 billion MRO demand.
• Single Aisle MRO will dominate the global fleet despite the higher costs associated with larger twin aisle aircraft.
• A320 family alone is expected to generate $257 billion demand, equivalent to almost 25% of all MRO activity.
Highlights
Credit: Brian Kough, Aviation Week
Information Classification: General
MRO Demand Shift – Airframe Heavy Maintenance Global
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‘MRO-Roller’ Coaster?• Grounding and storage of commercial aircraft created deferrals
of thousands of calendar/utilization airframe checks.
• As aircraft return to service needing required checks, they’ll
create sine wave demand cycles – roller coaster…
• ~15,400 checks needed in 2022, falling to around 10,100 by
2024 before increasing again.
• $55 billion is expected to be spent on C & D Checks over decade.
• Demand increasing at a 1.1% CAGR – the slowest growth rate.
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
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Heavy Airframe Demand
Other ATR Yabora/Embraer Embraer/Yabora Airbus Boeing 8,000
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Airbus
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Information Classification: General
MRO Demand Shift – By Engine Family Global
15Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
Trent 1000 GEnx RB211
• CFM56 accounts for almost a quarter of all demand, ~$113B.
• TRENT family sees rapid growth: TRENT 1000 (787) & TRENTXWB (Airbus
A350) maintenance spend rises from $4.8B to $8.8B for Rolls Royce.
• Demand for V2500 MRO declines before the end of the decade.
• GEnx (787) demand more than doubles over the decade rising from $2.5B in
2022 to over $6.1B by 2032.
• PW1000G & LEAP shop visits ramp up in the latter half decade generating
$4B and $5B in annual demand respectively.
• Decline in demand for CF6-80 (767, A330), GP7000 (A380) maintenance
linked with decline of widebodies & RB211 (B757).
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World MRO Demand by Engine Family
2022 2031
Highlights
Information Classification: General
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Deliveries Retirements
Europe’s Engines
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Deliveries vs. retirements in Europe 2022-31
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
• Europe (west + east) projected for 22% of world’s delivery share of firm and expected orders.
• Retirements peak in 2025 at +600/year.
• Deliveries outpace retirements 1.7:1
~8,600 new engines required in next 10-years
~5,140 retirements expected
Europe22%
Asia Pacific
21%
North America
21%
China10%
Middle East9%
Latin America
9%
India7%
Africa2%
World Delivery Share
PW1100G/NEO
Highlights
Information Classification: General
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New Generation Engines Legacy Engines
LEAP
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PW1000G
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TRENT1000
/7000/XWB
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GENX
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GE9X
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NEW GEN DELIVERIES
Engine Fleet Europe
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New generation vs. legacy in-service fleet share & deliveries forecast
Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
• New generation engines will exceed legacy types by 2030.
• LEAP family will hold 51% share of new deliveries (A320 + B737).
• Europe’s fleet grows below average at 2.3% CAGR.
• Legacy engine fleet holds +50% share at the end of 2029.
• Fleet ends 2031 at ~18,800 engines.
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Lead by LEAP, new generation engines will account for over
half of the active fleet in Europe by
2030
Highlights
Information Classification: General
• Retirements of legacy aircraft significantly impacts engine MRO market demand.
• Topping the list: 6,400 CFM56, 1,800 CF34 and 1,700 V2500 powerplants
• Trends through 2021 suggest that both airframe and engine maintenance events avoided by switching aircraft between parked and active fleet as well as green time swaps to delay maintenance events/costs.
• Assuming these aircraft remain in service, this deferred maintenance may delay retirements or accelerate some.
• Potential to apply downward pressure on the cost of spares or shop visits as USM becomes available.
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Others JT8D TPE331 RB211 TRENT PW4000
PT6A CF6-80 V2500 PW100 CF34 CFM56
Commercial Engines/Parts with Green Time?
18Source: 2022 Commercial Aviation Fleet & MRO Forecast, Aviation Week Network, Copyright 2021.
Engines worldwide associated with retiring aircraft: available as spares/USM?
Credit: Brian Kough
Highlights
Information Classification: General
M A R K E T
S U M M A R Y
R E P O R T
19
European Commercial OutlookFleet & MRO Forecast
For more information, contact:
Brian [email protected]
20
Intelligence & Data Services | Aviation Week Network Washington, D.C.