Commercial Airlines Market by Revenue Stream, Type, and Geography - Forecast and Analysis 2023-2027

The commercial airlines market size is estimated to decline at a CAGR of 6.31% between 2022 and 2027, and the size of the market is forecast to increase by USD 260 billion. The growth of the market depends on several factors, such as the increase in air passenger traffic, the rising demand for air cargo, and the creation of new air routes to tap market potential.

This report extensively covers market segmentation by revenue stream (passenger and cargo), type (international and domestic), and geography (APAC, Europe, North America, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

What will be the Size of the Commercial Airlines Market During the Forecast Period?

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Technavio’s Exclusive Commercial Airlines Market Customer Landscape

Our analysis of the adoption life cycle of the market indicates its movement between the innovator’s stage and the laggard’s stage. The report illustrates the lifecycle of the market, focusing on the adoption rates of the major countries. Technavio has included key purchase criteria, adoption rates, adoption lifecycles, and drivers of price sensitivity to help companies evaluate and develop growth strategies from 2022 to 2027. 

Global Commercial Airlines Market Customer Landscape

Key Drivers, Trends, and Challenges

Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market. Although there has been a disruption in the growth of the market during the COVID-19 pandemic, a holistic analysis of drivers, trends, and challenges will help companies refine marketing strategies to gain a competitive advantage.    

Key  Driver
 

The creation of new air routes to tap market potential is the key factor driving the growth of the global commercial airlines 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 Trends

Growing demand for luxury air travel is the primary trend shaping the global commercial airlines 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. The demand for premium air tickets is expected to drive the growth of the global commercial airlines market during the forecast period.

Major  Challenge

Increasing operating expenses are major challenges impeding the growth of the global commercial airlines 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.

Who are the Major Commercial Airlines Market Vendors?

Vendors 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 China Ltd.: The company offers commercial airline services such as flights to over 200 domestic and international destinations, with a focus on the Asia-Pacific region.

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 vendors, including:

• Air Transport Services Group Inc.
• American Airlines Group Inc.
• Ana Holdings Inc.
• China Eastern Airlines Co. Ltd.
• China Southern Airlines Co. 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.
• United Airlines Inc.

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

Commercial Airlines Market Segmentation by Revenue Stream, Type, and Geography 

Revenue Stream Segment Analysis

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 521.33 billion in 2017 and continued to grow until 2021.  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.

Type Segment Analysis

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.

Regional Analysis

APAC is estimated to contribute 52% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.  

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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. 

Covid Recovery Analysis:

In 2020, COVID-19 negatively impacted the regional commercial airlines market. However, with the relaxation of lockdown restrictions in late 2020, the commercial airlines market slowly paved its way for growth. As traveling resumed nationally and internationally, countries in APAC experienced significant growth in the commercial airlines market during the forecast period.

Segment Overview

The commercial airlines market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Revenue Stream Outlook (USD Billion, 2017 - 2027)
  • Passenger
  • Cargo

• Type Outlook (USD Billion, 2017 - 2027)
  • International
  • Domestic

• Region Outlook (USD Billion, 2017 - 2027)
  • 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

Commercial Airlines Market Scope
Report Coverage	Details
Page number	164
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Decelerate at a CAGR of 6.31%
Market growth 2023-2027	USD 260 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	7.15
Regional analysis	APAC, Europe, North America, Middle East and Africa, and South America
Performing market contribution	APAC at 52%
Key countries	US, China, India, UK, and Germany
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	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 Southern Airlines Co. 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.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Commercial Airlines Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the commercial airlines market between 2023 and 2027
• Precise estimation of the commercial airlines market size and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market across APAC, Europe, North America, Middle East and Africa, and South America
• A thorough analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive analysis of factors that will challenge the growth of commercial airlines market vendors

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