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A strong backlog and plenty of new aircraft coming into production will support the rapid multi-billion dollar growth of the commercial aviation market, according to new market forecasts from IHS Inc., the leading global source of critical information and insight.
The introduction of new aircraft types and sizeable order backlogs point to significant expansion and changes to support requirements in the next five years. “Production in 2013 was $161.7 billion, that number is forecast to jump to $317.5 billion by 2018,” said Ben Moores, senior analyst at IHS Aerospace, Defence & Security. “A long run of high oil prices and low interest rates had a dramatic impact on orders and deliveries. This backlog will ensure that the market remains on a growth trajectory for the next few years.”
Narrowbody and widebody market
The market for narrowbody and widebody aircraft saw spectacular growth over the past five years, with further change to come from the introduction of three new narrowbody (the C Series, the B-737 MAX, and A320neo) and three new widebody types (B-777X, A330Neo and A350). A long run of high oil prices increased demand for more fuel efficient aircraft, a factor that has been compounded by low interest rates to fuel further demand. The total global backlog is now so large that production could remain at the current rate for seven years without needing any additional orders.
Global business jets make a comeback
IHS Aerospace, Defence & Security forecasts a comeback for business jets in the developing world and in mature markets. Overall, the total global market for business jets was worth $22.34 billion in 2014, but IHS forecasts total market value of $24.61 billion by 2018 as 22 new aircraft types will come into the market between now and 2019 and the 15 aircraft types currently being delivered are forecast to remain in production through 2019.
The market for small business jets was worth $5.06 billion in 2014, with deliveries of 387 aircraft. This is forecast is to rise to $8.18 billion with deliveries of Boeing 777 aircraft in 2018. A total of 13 new aircraft types will come into the market between now and 2019. Currently there are 15 aircraft types being delivered and all of them are forecast to remain in production through to 2019.
The world aircraft market has a strong backlog, plenty of new types coming into production and relatively few risks over the next five years. The chances of over-ordering in the commercial transport market are real but highly localised and unlikely to emerge until 2019, when significant deliveries will have occurred and returns on investment start to fall fast in some markets. The market for large business jets could become very competitive with more types chasing similar levels of demand, whilst the smaller jet market could return to glory days as the world economy continues to grow, particularly if Chinese legislation changes.
“Market trends identified by IHS Aerospace, Defence & Security are not only relevant to airlines, but also to airport operators,” said Ben Vogel, editor of IHS Jane’s Airport Review. “In planning capital investment decisions for the future, airport authorities must be able to assess likely aircraft demand patterns. Airports need to know what kind of aircraft will be in use, in order to plan the appropriate runway and terminal infrastructure.”
IHS is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. Businesses and governments in more than 150 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs about 8,800 people in 32 countries around the world.