Commercial Airlines Market Analysis APAC, Europe, North America, Middle East and Africa, South America - US, China, UK, Germany, India - Size and Forecast 2024-2028

Commercial Airlines Market Size 2024-2028

The commercial airlines market size is forecast to increase by USD 370.2 billion at a CAGR of 8.09% between 2023 and 2028. The commercial aviation market experiences growth driven by various factors. Notably, the surge in air passenger traffic, fueled by increasing global connectivity and travel demand, significantly contributes to market expansion. Additionally, the burgeoning need for air cargo, driven by e-commerce and global supply chain requirements, creates new opportunities for market growth. Furthermore, the establishment of new air routes, tapping into untapped market potential, enhances market competitiveness and expansion. Our report examines historic data from 2018 - 2022, besides analyzing the current and forecasted market scenario.

The market in APAC is experiencing substantial growth due to rising air travel demand from a vast consumer base, driven by an expanding middle class and increasing GDP. Key contributors to this market include China, Japan, India, South Korea, Singapore, and Australia. Vendors in the region are capitalizing on this growth through investments in new airport constructions and upgrades. Additionally, Air China Ltd. company offers commercial airline services such as flights to over 200 domestic and international destinations, with a focus on the Asia-Pacific region.

Market Forecasting and Size

Market  Forecast 2024-2028

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Market Dynamics

The market encompasses a diverse range of passenger aircraft and sub-aircraft types, each distinguished by unique body types and engine programs. Major players like Delta Airlines and Mitsubishi Heavy Industries are driving innovation with new aircraft technologies and Body Type such as the SpaceJet. In collaboration with companies like ROSTEC and ATR, advancements in turbofan engines are enhancing cargo transportation capabilities. From the fuselage to the landing gear, every component of commercial aviation including commercial helicopters and gliders plays a crucial role in ensuring safe and efficient air travel. Sub-Aircraft Type and Commercial gliders are equipped with wings, cockpit, propeller, and tail assembly for efficient and controlled flight. Our researchers studied the market research and growth data for years, with 2023 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.

Key Market Driver

The creation of new air routes to tap market potential is the key factor driving the growth of the market.  Airlines are always looking for new ways to increase their revenue streams. This includes launching services on new routes to serve untapped markets. Most airlines use aviation market research tools to analyze the available data extracted from industry-wide analysis, passenger inflows, and outflows, timing, and connectivity to assess likely routes. Identify trends such as options. Airlines choose the type of aircraft to use and the frequency of operations on new routes based on projected outcomes such as revenue and profitability.

The launch of new routes bolsters the entire aviation infrastructure. For instance, over 2,000 new routes were launched in 2021 involving airports in Europe, to which 134 airlines contributed. Besides initiating procurement and retrofitting of aircraft fleets, it encourages participation by regional component manufacturers in scheduled and unscheduled maintenance. The increased frequency of flights also results in the establishment of aircraft repair units nearby, which source their requirements from certified local vendors to minimize operational costs. To capitalize on the seasonal demand, British Airways launched a biweekly service between Charleston, South Carolina, and London Heathrow Airport in April 2019. The launch of new service routes will create new revenue sources for airline operators and help them offer commercially viable services to customers, which, in turn, will boost the market in focus during the forecast period.

Significant Market Trends

Growing demand for luxury air travel is the primary trend shaping the market growth. The US, China, France, Indonesia, Japan, and India are among the countries that have increased the demand for air travel. Commercial airline companies constantly monitor and adapt to consumer expectations to provide efficient service as part of the luxury air travel package. With growing affluence, individuals are increasing their spending on unique experiences rather than accumulating material goods. It is becoming highly challenging for airlines to cater to individual luxury customers while remaining exclusive and relevant. Aircraft interior designers are experimenting with modern systems. New, luxurious seats are integrated into the business-class and first-class segments of modern aircraft such as the A350 and B787, which enables airlines to offer customized services to their high-net-worth individual passengers.

The increasing demand for luxury has led to the placement of business-class cabins on most wide-body aircraft that are scheduled for intercontinental flights. As more air passengers seek the material aspects of luxury travel, mature markets such as the US and China are demanding a new, evolved type of luxury air travel. Thus, offering luxury customers a relevant, personal, and exclusive experience has become crucial. Airlines remain committed to surpassing passenger expectations in terms of the level of comfort offered at a certain price point. Additionally, advancements in technology, including commercial aviation and military headsets, enhance communication and situational awareness for both passengers and personnel. These headsets provide high clarity of voice transmission, noise cancellation features, and sometimes integrated communication capabilities crucial for aviation and military operations.

Major Market Challenge

Increasing operating expenses are major challenges impeding the growth of the market. Rising fuel prices and increasing labor costs are major factors increasing the overall operating expense (OPEX) of commercial airline operators. The surge in fuel prices is attributable to geopolitical events such as US sanctions on Iran oil exports and production cuts in the Organization of the Petroleum Exporting Countries (OPEC). Labor costs are fixed costs for commercial airline companies in the short term; however, fuel costs are prone to fluctuations as they are based on crude oil prices. Unit labor costs are now rising significantly after being stable for many years. Along with rising fuel costs, increasing labor costs are contributing to upward pressure on unit costs and adversely affecting the profit margins of airline operators.

Factors such as a significant increase in the number of LCCs and several consolidation deals are making the airline industry more competitive. Online travel agencies (OTAs) and other intermediaries are investing in technology solutions for establishing their digital presence and market penetration, which are challenges for the commercial airlines market. Airline operators may incur additional costs to keep up with digitization and remain competitive. Therefore, increasing competition and rising OPEX are eroding the profit margins of airline operators and forcing them to implement strategies such as competitive ticket pricing, which is not a feasible long-term solution. Thus, increasing fuel prices and labor costs, coupled with growing competition, may hamper revenue generation by commercial airline operators. This may challenge the growth of the market during the forecast period.

Market Segmentation

By Revenue Stream 

The passenger segment will account for a major share of the market's growth during the forecast period. The commercial airlines market witnessed strong growth in 2021, mainly because of the increasing number of air passengers. In 2021, global passenger footfall reached around 4.6 billion in the airport, representing an increase of 28.3%, primarily because of rapid growth in air travel in APAC. Hence, major aircraft OEMs have initiated the revamping of their existing production facilities to ensure scheduled deliveries. Most LCCs are trying to modernize the existing fleet to exploit new market opportunities in the global commercial airlines market. The increasing number of air passengers is a major factor driving the procurement of new aircraft

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The passenger segment was valued at USD 530.00 billion in 2018.  A major challenge for commercial airline operators is controlling operating costs. Rising fuel cost has drastically affected the profit margin of commercial airline companies. Vendors are focusing on using fuel-efficient aircraft to control operational expenditure. Aircraft OEMs are constantly improving their product offerings to cater to a wider segment of a booming market. In December 2022, Boeing's newest souped-up version of the 777 can carry between 384 to 426 passengers in a multi-class layout-about the same as the 747. Boeing is currently designing the B797 to rejuvenate its narrow-body aircraft offerings post the recent global grounding of the B737 MAX. Meggitt Plc (Meggitt) supplies the advanced electronic bleed air system for B737MAX. Such developments are expected to improve the efficiency of the aircraft and help operators increase their profit margin during the forecast period.

By Type 

Based on type, the market has been segmented into international and domestic. The international segment will account for the largest share of this segment. International commercial airlines are an integral part of the global transportation network, connecting people and goods around the world. These airlines operate on a large scale, transporting millions of passengers and cargo shipments every year. One of the most important aspects of international commercial airlines is safety. These airlines adhere to strict regulations and procedures to ensure the safety of their passengers and crew. This includes rigorous maintenance schedules, regular safety inspections, and extensive training for pilots and other staff. International commercial airlines also offer a wide range of services to passengers, including in-flight entertainment, meals and snacks, and various seating options. Some airlines even offer amenities such as Wi-Fi, lie-flat seats, and private suites. Such factors will increase segment growth during the forecast period.

By Region

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APAC is estimated to contribute 53% to the growth by 2027.  Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period.

The fast growth of the commercial airlines market in the region can be primarily attributed to increased air passenger transportation. APAC, which comprises about half of the global population, has a large consumer base with an increasing number of middle-class households. The total GDP of APAC has risen from 9 trillion in 2000 to 35 trillion in 2021, with APAC now accounting for around 37% of the global GDP. India and China, two of the emerging economies in APAC, witnessed a surge in air passenger travel in 2021, primarily because of the increased spending capacity of middle-class households. With a large population untapped across the region, the number of air passengers traveling at domestic and international levels is expected to increase during the forecast period. 

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Air France KLM SA: The company offers commercial airline services which combine an outbound flight via Paris with an inbound flight via Amsterdam or vice versa.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:

Air China Ltd., Air France KLM SA, Air Transport Services Group Inc., American Airlines Group Inc., Ana Holdings Inc., China Eastern Airlines Co. Ltd., China Eastern Airlines Corp. Ltd., Copa Holdings SA, Delta Air Lines Inc., Deutsche Lufthansa AG, easyJet plc, Green Africa Airways Ltd., Hahn Air Lines GmbH, InterGlobe Aviation Ltd., International Consolidated Airlines Group SA, Japan Airlines Co. Ltd., John Swire and Sons Ltd., Qantas Airways Ltd., Southwest Airlines Co., and United Airlines Inc. 

Technavio market forecast the an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Revenue Stream Outlook
  • Passenger
  • Cargo
• Type Outlook 
  • International
  • Domestic
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is a dynamic sector within the commercial aviation industry, influenced by various factors such as economic conditions, domestic passenger traffic, and airline profitability. As cross-border travelers increase, airlines strategize fleet management and fleet expansion plans, catering to both the business and leisure sectors. Emerging countries witness growth in infrastructure and regional aircraft demand, including turboprops and freighters. Technologies like drones and urban air mobility shape the future, emphasizing sustainable aviation and fuel-efficient engines. Amidst health and safety considerations, advancements in technology integration with machine learning and artificial intelligence enhance aircraft safety and efficiency, ensuring compliance with environmental regulations and legal frameworks.

Furthermore, the market is a vital component of the air transport industry, encompassing various sub-aircraft types and body types. Influenced by factors like UNWTO data, per capita income, and geopolitical stability, airlines make strategic decisions on aircraft orders and fleet composition. As infrastructure grows, carriers like Wizz Air, Frontier, and Volaris expand operations, utilizing turboprops, freighters, and advanced aircraft engines. Both the business and leisure sectors benefit from increased ease of travel restrictions, driving demand for commercial aircraft and civilian aircraft. With a focus on innovation and advanced materials, the industry embraces commercial drone use, supported by regulations like special waiver provisions, ensuring safe and efficient operations.

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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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