Boeing projects demand for $3.2 trillion in aviation services through 2030, with commercial customers accounting for $1.7 trillion, or 53%, the company’s latest services forecast reveals.
The spending will be dominated by MRO needs of both civil and military customers, which will make up 70%, or about $2.2 trillion, of the total. Boeing sees commercial customers generating slightly more than half of the MRO demand, at $1.2 trillion, compared to $1 trillion of government work.
The commercial MRO market is in recovery mode following the steep drop in travel demand in 2020 linked to the COVID-19 pandemic. Boeing sees the MRO market as needing “around two to three years to recover to pre-COVID-19 levels,” the forecast said.
An expected spike in retirements will drive some aftermarket activity, including part-outs and accumulation of used serviceable material inventory. Boeing sees 54% of projected 18,850 passenger-aircraft deliveries through 2030 as being used to replace existing airframes, according to its latest Commercial Market Outlook. Some of the 10,200 displaced airframe will be converted to freighters, but most will be retired.
"While 2020 saw an abrupt increase in percentage of grounded fleet worldwide, many analysts anticipate an increase in the retirement of these older, less efficient grounded aircraft when asset values return and the business case for selling or scrapping an aircraft makes good business sense,” Boeing said. Following recent major downturns, airlines have responded by retiring 15-20% of the global fleet within five years as part of revised business strategies.
“Coming out of this latest industry shock it would not be surprising to see an average of 20-25% of the fleet to retire over the same period,” Boeing said. That translates into 6,475 retirements by 2025, using Boeing’s 2019 fleet size of 25,900 as a baseline.
The remaining 15% of the services market will be roughly split between training and “digital solutions and analytics” such as fuel-optimization and fleet-management software.
"Digital solutions were instrumental during the early stages of the pandemic as operators sought rapid adaptation to a leaner environment where finances were strained,” Boeing said. "Many airlines in the industry see the value in investing in digital solutions and digital transformation to bring rapid change to their business and take advantage of the efficiencies analytics and harnessing their data can bring.”
Boeing also sees growing interest in using operational data to optimize maintenance and reduce unscheduled events as well as fine-tune inventory levels to minimize spending without risking operational reliability.
On the training front, Boeing sees more rapid adoption of virtual learning. The trend has been exacerbated by COVID-19 restrictions that forced many industry stakeholders to adjust how they ensured their workforces had proper training without the benefit of in-person classes.
This story has been updated with additional data.
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