The world will need US$2.8 trillion worth of new aircraft over the next 20 years, despite the impact of the COVID-19 pandemic significantly reducing deliveries of new aircraft during 2020, according to a new report released by aviation analytics company, Cirium.

In its 2020 Fleet Forecast, Cirium said it predicts that 43,315 new passenger and freighter aircraft will be delivered between 2020 and 2039. This represents an 8% drop compared to the 20-year outlook in the 2019 Cirium Fleet Forecast and includes some 4,600 fewer deliveries in the next decade.

“Following ten consecutive years of uninterrupted demand growth, the 2020 COVID-19 crisis has led to a dramatic reduction in global traffic and record industry losses,” said Chris Seymour, Ascend by Cirium Head of Market Analysis.

“Worldwide deliveries during 2020 are expected to be 45% lower than in 2019. However, the numbers will gradually recover and surpass the previous peak (in 2018) during 2025, assuming traffic bounces back as predicted,” he added.

Cirium said engine flying hours will also fall by 45% in 2020 to 94 million, compared to 170 million in 2019. However, the use of more efficient aircraft this year means that total CO2 emissions are likely to be down by 50%. Over the next 20 years, total engine flying hours will increase to 310 million.

Unique conditions call for a new approach

The Cirium report said the recovery scenario in this year’s forecast assumes that traffic will level off at 60-70% down on 2019 during the winter of 2020/21, before recovering slowly until 2024, when 2019 traffic levels are achieved once again.

“It is clear that, for the foreseeable future, there will remain substantially more supply of aircraft than there is demand. This includes supply of new-build aircraft, mid-life assets returned to lessors, or aircraft simply parked by their airline owners,” said Richard Evans, Ascend by Cirium senior consultant.

“It also seems obvious that there will eventually be many airline failures, especially among smaller, non-government-backed carriers.”

Asia-Pacific on the rise

Asian markets will be the growth engine for the global aviation industry during the next two decades. Cirium said China is poised to be the biggest single destination for new commercial and passenger aircraft deliveries between 2020 and 2039, with a 22% share – one point ahead of the rest of Asia combined.

“Over the next 20 years these deliveries will drive the Chinese fleet to grow at the highest rate anywhere – almost 6% a year – to virtually equal the North American fleet with a 22% share in 2039, or ten points higher than today. Asia Pacific will grow two points to 20%, while Europe’s current 20% fleet share will shrink to 16%,” said Seymour.

Cirium said Airbus and Boeing are expected to remain the two largest commercial aircraft manufacturers (OEMs), between them delivering an estimated 77% of aircraft and 86% by value through 2039.

An uphill road to recovery

Looking long-term, reaching the forecast traffic growth will require the global passenger fleet to increase by just over 20,000 units. That equates to a 2.9% annual growth rate, taking the fleet to some 47,000 aircraft by the end of 2039.

Cirium said this still represents a reduction of some 5,000 aircraft (10%) over the numbers forecast in the 2019 Cirium Fleet Forecast, reflecting the loss of growth during the post-pandemic years.

The single-aisle fleet will grow faster at 3.5% annually, against 2.7% for twin-aisles due to long-haul traffic taking longer to recover. The regional aircraft fleet will grow more modestly at just over 1%.

About 82% of the current fleet is forecast to be retired from passenger service during the 20-year period, with 74% for the freighters, which have longer economic useful lives. Overall there will be over 21,600 retirements. The freighter fleet will grow at almost 2% annually to reach 4,100 aircraft.

“Our traffic modelling assumes a slow recovery, with 2019 traffic levels not being reached until 2024. Beyond 2024 we, therefore, expect to return to more traditional growth paths, but perhaps in a structurally different industry,” said Seymour.