Europe Aviation Market by Revenue Stream and Type - Forecast and Analysis 2024-2028

Europe Aviation Market Forecast 2024-2028

The Europe Aviation market size is forecast to increase by USD 83.25 billion, at a CAGR of 4.78% between 2023 and 2028. Market growth in the aviation sector hinges on several pivotal factors, including the implementation of measures aimed at enhancing operational efficiency, substantial investments directed towards expanding and modernizing airport infrastructure, and the expected surge in the number of air travelers. These aspects collectively contribute to fostering a conducive environment for sustained growth and development within the aviation industry. As airlines and airports continue to innovate and adapt to evolving demands, coupled with the projected rise in global travel demand, the outlook remains optimistic for the aviation market's expansion in the foreseeable future. Our market report examines historical data from 2018-2022, besides analyzing the current and forecasted market scenario.

Moreover, the companies are implementing various strategies to enhance their presence in the market. Additionally, BAE Systems Plc company offers aviation solutions, missiles, avionics, and other aerospace and defense products and aviation services, including systems and upgrades, training and simulation, unmanned aerial systems development, electronic warfare systems, and mission support services. DAHER company offers aviation services such as Kodiak, and TBM series high-performance turboprop airplanes. Also, the company offers services, including maintenance and aerospace systems development for both civil and defense applications.

Market Forecasting and Size

Market Forecast 2024-2028

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Market Dynamics

The market spans the commercial sector and encompasses diverse segments like passenger traffic, helicopters, business jets, and cargo transportation, including medical supplies. Catering to VIPs and charter operations, it witnesses fluctuations in orders and deliveries across general aviation aircraft and newer generation models. With a focus on fuel efficiency and safety, manufacturers prioritize features like situational awareness and tactical advantage. While commercial aircraft deliveries remain steady, travel restrictions affect air passenger traffic and pose challenges for major commercial aircraft OEMs. Our researchers studied the market research and growth data for years, with 2023 as the base year and 2024 as the estimated year, and presented the key drivers, trends, and challenges for the market.

Key Market Driver- Increasing efficiency of aircraft

Enhanced energy efficiency in aircraft is facilitated by improved utilization, characterized by increased average passenger counts and cargo weights per flight, thereby reducing energy consumption per useful service provided. Fleet renewal also contributes to efficiency enhancements, with a focus on updating aging aircraft with newer, more fuel-efficient models. While strides have been made, the aviation industry in Europe still requires advancements in energy efficiency, with existing infrastructure poised to support these objectives.

Moreover, achieving greater fuel efficiency will result in reduced emissions from aircraft, driving the industry's sustainability efforts. Leveraging flexible navigation systems and real-time updates allows aircraft to navigate around adverse weather conditions, optimizing routes and minimizing fuel consumption. Innovations such as the blended wing body (BWB), currently under development, hold promise for further reducing fuel consumption and emissions. These factors collectively contribute to driving market growth in the commercial aviation sector during the forecast period, emphasizing the importance of safety, situational awareness, and manufacturers' advancements in meeting evolving industry demands. Hence, such factors are driving the market growth during the forecast period.

Significant Market Trends- Integration of RFID in aircraft

Radio-frequency identification (RFID) is a method in which electromagnetic fields are used to transfer data using a wireless network to track tags attached to objects. Some tags contain electronically stored data, while others are power-driven by electromagnetic induction that is generated by magnetic fields. RFID tags are beneficial and are used to track them electronically. RFID tags are widely used in the military, aerospace, and retail industries. Using RFID tags can improve manufacturing efficiency, as these tags allow manufacturers to manage their spare parts inventory.

Additionally, RFID-based security solutions contribute to airport security by providing efficient access control and monitoring. Airline operators and aircraft manufacturers in Europe leverage RFID for supply chain management, ensuring the traceability and authenticity of components throughout the manufacturing and distribution processes. Overall, the adoption of RFID technology enhances efficiency, safety, and passenger experience, which will drive the growth of the market during the forecast period.

Major Market Challenge- Fluctuations in oil and gas prices

The aviation sector is highly affected by the price of crude oil, and its success or failure depends on the pricing of crude oil. Crude oil prices increased in 2016 before crashing again in March 2020 following the COVID-19 pandemic. Also, the Russia-Ukraine war that started in 2022 again impacted crude oil prices. Crude oil prices rose sharply as a result of the war between Russia and Ukraine and the events that followed. WTI and Brent crude oil are two major benchmarks for global oil pricing. WTI, extracted in the US, is known for its light and sweet characteristics. Brent, sourced from the North Sea, is slightly heavier. 

Additionally, volatility in crude oil prices is a major risk for airline operators. An increase in crude oil price increases the input cost for the downstream sector and, in turn, increases the cost of aviation fuel. However, during a phase of low global crude oil prices, the operating costs for the aviation industry decrease. Low aviation fuel prices increase the profits of airline companies and lead to reduced airfares. Consequently, the demand for air travel increases when global crude oil prices are low, which compels airline companies to increase their capacity. Thus, such wide fluctuation in global crude oil prices and their impact can hinder market growth during the forecast period. 

Market Segmentation 

The market in Europe encompasses various segments, including the commercial sector that caters to passenger traffic with a diverse fleet, ranging from helicopters and business jets to aircraft transporting medical supplies and cargo. Additionally, it serves VIPs through charter operations, focusing on orders and deliveries of both general aviation aircraft and newer generation aircraft known for their fuel efficiency and safety features. Manufacturers in the region are keen on developing aircraft with advanced technologies that enhance situational awareness and provide a tactical advantage. Despite challenges such as travel restrictions, the commercial aircraft segment remains dynamic, with major commercial aircraft OEMs driving innovation and adapting to market demands. The market in Europe reflects a blend of efficiency, safety, and technological advancements, catering to diverse aviation needs and contributing significantly to regional and global air passenger traffic.

Revenue Stream Segment Analysis

The passenger segment will account for a major share of the market's growth during the forecast period.? The demand for air travel continues to rise in Europe due to factors such as economic growth, rising disposable incomes, and changing consumer preferences. This trend drives the need for passenger aircraft to accommodate the growing number of air travelers. European airline companies are investing in fleet expansion and modernization to meet growing demand from passengers by replacing aging aircraft and enhancing operational efficiency. 

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The passenger segment was valued at USD 231.45 billion in 2018. Furthermore, European countries such as the UK and Germany are focusing on enhancing regional connectivity through air transportation, leading to increased demand for passenger airplane to operate on regional and domestic routes, connecting smaller cities and towns across Europe. Overall, a combination of economic growth, tourism activities, business travel, fleet expansion, environmental considerations, and the presence of low-cost carriers is expected to drive the demand for passenger aircraft, which will boost the growth of the aviation market in Europe through the passenger segment during the forecast period.

Type Segment Analysis

Based on type, the market has been segmented into commercial aircraft, military aircraft, and general aircraft. The commercial aircraft segment will account for the largest share of this segment.  The surge in air travel demand, both domestically and internationally, propels the segment growth. Economic expansion and rising incomes drive more passengers to choose air travel, necessitating additional plane. European airlines are updating their fleets for efficiency and environmental compliance. The rise of low-cost carriers boosts demand for smaller, fuel-efficient aircraft like Airbus A320 and Boeing 737. Technological advancements, including fuel-efficient engines, cater to growing needs. Meanwhile, e-commerce and globalization fuel cargo traffic, requiring more freight aircraft. This multi-faceted growth trajectory anticipates sustained expansion in the aviation market in Europe.

Who are the Major Market Companies?

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.

Dassault Aviation SA: The company offers solutions, including the design and production of advanced fighter jets like the Rafale, business jets like the Falcon series, and military UAVs.

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

Air France KLM SA, Airbus SE, Collins Aerospace, Deutsche Lufthansa AG, Diehl Stiftung and Co. KG, Draken International, LLC, Embraer SA, GKN Aerospace Services Ltd., Honeywell International Inc., Leonardo S.p.A., MTU Aero Engines AG, Rolls Royce Holdings Plc, RUAG International Holding Ltd., Ryanair Holdings plc, Safran SA, Thales Group, and The Boeing Co 

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 analysis and report forecasts market growth analysis and provides an analysis of the latest trends and growth opportunities from 2018 to 2028. 

• Revenue Stream Outlook
  • Passenger
  • Freight

• Type Outlook
  • Commercial aircraft
  • Military aircraft
  • General aircraft

Market Analyst Overview:

The market is a critical component of global transportation networks, regulated by organizations like IATA, ICAO, and Airports Council International (ACI). Supported by bodies such as the UN World Tourism Organization (UNWTO) and the World Trade Organization (WTO), it contributes significantly to the international air passenger traffic and revenue passenger kilometers (RPK) metrics. Advancements in technology facilitate the operation of newer generation aircraft on both major routes and new routes, albeit with challenges like the grounding of Boeing B737 MAX aircraft. Additionally, the market serves e-commerce operations and the air cargo market, utilizing freighter aircraft like Luxembourg's Cargolux airlines and B777-8 freighters. Economic indicators such as Eurostat, European Union, and NATO assessments impact the sector, reflecting on global GDP (Gross Domestic Product) trends.

Furthermore, the market in Europe is a dynamic sector characterized by the commercial sector handling extensive passenger traffic. Organizations such as the International Air Transport Association (IATA), the International Civil Aviation Organization (ICAO), and the Airports Council International (ACI) play vital roles. The region sees significant international air passenger traffic and revenue passenger kilometers (RPK). It encompasses various airplanetypes like helicopters and business jets, catering to medical supplies, cargo, and VIPs. Manufacturers focus on newer generation aircraft for enhanced fuel efficiency and safety. Despite challenges like travel restrictions, the Europe Aviation Market continues to grow, supported by key players like Airbus and Boeing

Europe Aviation Market Scope
Report Coverage	Details
Page number	150
Base year	2023
Historic period	2018-2022
Forecast period	2024-2028
Growth momentum & CAGR	Accelerate at a CAGR of 4.78%
Market Growth 2024-2028	USD 83.25 billion
Market structure	Fragmented
YoY growth 2023-2024(%)	4.23
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Air France KLM SA, Airbus SE, BAE Systems Plc, Collins Aerospace, DAHER, Dassault Aviation SA, Deutsche Lufthansa AG, Diehl Stiftung and Co. KG, Draken International, LLC, Embraer SA, GKN Aerospace Services Ltd., Honeywell International Inc., Leonardo S.p.A., MTU Aero Engines AG, Rolls Royce Holdings Plc, RUAG International Holding Ltd., Ryanair Holdings plc, Safran SA, Thales Group, and The Boeing Co
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, and market condition analysis for the 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 Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2023 and 2028
• Precise estimation of the market growth and trends and its contribution to the market in focus on the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Market growth and forecasting across Europe
• A thorough market analysis and report of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market  companies

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