Global Aviation Requires $4 Trillion of Capital for Fleet Transformation
According to leasing firm Avolon, global aviation is in need of $4 trillion in capital over the next two decades to support new commercial deliveries and revolutionize the world’s fleet. In a recent forecast, Avolon revealed that airlines and leasing companies are expected to acquire 44,300 commercial passenger aircraft by 2042, with approximately half allocated for replacement and the other half for growth.
Avolon further predicted that the commercial passenger aircraft fleet will nearly double to 46,880 aircraft by 2042. This report coincides with the upcoming Paris Airshow from June 19-25, where aerospace companies will emphasize their plans to achieve the industry-wide target of net-zero emissions by 2050, while simultaneously addressing short-term supply chain challenges.
To attain this ambitious goal, the aviation industry must decouple its environmental impact from the robust travel demand, projected to grow at a rate of 3.5% compared to a 2.5% GDP growth, as highlighted by Avolon. Critics express concerns that such rapid growth in commercial aviation conflicts with environmental objectives.
Avolon emphasizes the significance of focusing on increasing the supply of Sustainable Aviation Fuels to address environmental concerns. The firm asserts that a thriving industry will attract the necessary capital to drive aviation’s transition toward sustainability.
The projected growth in the aviation industry will be dominated by narrow-body jets such as the Airbus A320neo and Boeing 737 MAX. Avolon predicts that Europe’s Airbus will maintain its leadership in the narrow-body market, with its current 53% fleet share rising to 58% by 2042. Boeing is expected to maintain its dominance in the widebody market, holding a 59% share.
Recently, Avolon has also agreed to a deal with Boeing, ordering 40 Boeing 737 MAX aircraft. This deal, valued at over $4 billion, highlights Avolon’s commitment to expanding its fleet and supporting the advancement of commercial aviation.
Additionally, Avolon anticipates a resurgence of smaller turboprops. Due to the age of existing turboprop planes, more deliveries of turboprops are expected in the coming years compared to regional jets. This shift marks a reversal of the trend observed over the past 25 years and may invite new entrants with innovative designs, according to Avolon.
Notably, China is developing a new turboprop aircraft, while plans for Brazil’s Embraer to introduce its own new turboprop are currently on hold. The market is presently dominated by the French-Italian manufacturer ATR.
Sources: AirGuide Business AirGuide.info, US News, Independent.ie, MSN