The global air travel industry is expected to recover between 2023 and 2025, driven by increasing demand for air travel and a shift towards greater efficiency and sustainability.

As the industry rebounds, aircraft manufacturers are entering a new phase of competition and innovation, with a focus on developing new, fuel-efficient aircraft.

Airbus and Boeing are the leading aircraft manufacturers, with Airbus receiving 408 new aircraft orders in Dubai and expecting to sell 39,000 planes in 20 years.

Boeing, on the other hand, expects to sell 43,000 planes in 20 years, but has faced challenges due to the grounding of its 737 Max aircraft.

The global aerospace composites market is also growing, with a market size of $29.95 billion in 2023 and a projected market size of $51.83 billion by 2027, driven by demand for high-strength lightweight materials.

The market is expected to grow at a Compound Annual Growth Rate (CAGR) of 14.7% from 2023 to 2027, with North America being the largest region in 2022 and Asia-Pacific being the fastest-growing region.

Key players in the aerospace composites market include Solvay, Toray, Mitsubishi, Hexcel, and Teijin, with technological advancements focusing on next-generation aircraft development.

The aviation industry is also shifting towards sustainable aviation, with a goal of achieving net-zero emissions by 2050, requiring significant changes and investments in alternative fuels and technologies.

Atkins predicts that 44,000 TWh of energy will be needed annually by 2070 for sustainable aviation fuel, which is almost double the world's current electricity demand.

Etihad Airways is aiming to achieve net-zero emissions by 2050, with a goal of cutting 2019 emissions in half by 2035, and has already flown its most sustainable flight ever with 72% reduced emissions.

The airline used 38% sustainable aviation fuel for the flight, but notes that sustainable aviation fuel is currently too costly for widespread use.

The United Nations is also aiming for net-zero emissions by 2050, with the aviation industry contributing 2% of global emissions, and Azul airline aiming for net-zero emissions by 2045.

The First Movers Coalition has 120 commitments for decarbonization, and ammonia is being considered as a potential low-carbon aviation fuel.

The International Civil Aviation Organization (ICAO) has set a goal of net-zero emissions by 2050, and carbon pricing and subsidies are being used to support sustainable aviation.

The aerospace industry is also being driven by technological advancements, with a focus on digitalization and connectivity, and airlines prioritizing fuel-efficient and environmentally friendly aircraft.

The global single-aisle aircraft market is expected to reach $222.20 billion by 2030, growing at a CAGR of 12.5% from 2023-2030, with Asia-Pacific being the largest region.

The market is driven by growing global demand for air travel, and aircraft manufacturers are investing in next-generation fuel-efficient models.

Boeing expects 41,170 aircraft demand over 20 years, while Airbus forecasts 39,490 aircraft sales by 2041, with Boeing cutting its demand estimate due to a saturated aviation market.

Airbus, on the other hand, has increased its forecast by 470 aircraft from last year, predicting higher demand for new aircraft.

The aircraft leasing market is also growing, with a market size expected to exceed $453.2 billion by 2026, growing at a rate of 6.8% during the forecast period.

Europe is the highest revenue-generating region in aircraft leasing, while Asia-Pacific is expected to exhibit substantial growth.

Leading companies in the aircraft leasing market include Aviation Capital Group and Boeing Capital Corporation.

The market is driven by increasing air travel rates and demand for fuel-efficient aircraft, with dry leasing and wet leasing being the primary lease types.

Fossil fuels currently account for 12% of total energy demand in the transport sector, but the aviation sector is shifting towards low-carbon jet fuel, which is at least 10% less carbon-intensive than commercial jet fuel.

The International Civil Aviation Organization (ICAO) has long-term objectives for the aviation industry's carbon reduction, and airlines are aiming to increase efficiency through passenger load factor.

Competition in the aviation sector has intensified due to new airlines and routes, and urban air mobility solutions depend on the right policy framework.

Renewable energy can reduce the carbon intensity of low-carbon aviation fuel, and sustainable aviation fuel production is critical to reducing carbon emissions.

Based on these trends and forecasts, it appears that Airbus is well-positioned to capitalize on future demand for new, fuel-efficient aircraft, with a strong order book and a focus on sustainable aviation.

Airbus is expected to account for 60% of narrow-body plane deliveries until 2026, and has a significant lead over Boeing in terms of net cash and net assets.

Boeing, on the other hand, faces significant challenges, including a net loss of $2.2 billion in 2023 and a high level of indebtedness.

However, Boeing is also making strategic moves, including the acquisition of Spirit AeroSystems for $4.7 billion, which is expected to support its growth and competitiveness.

Overall, the aerospace market is expected to continue growing, driven by increasing demand for air travel and a shift towards greater efficiency and sustainability, with Airbus and Boeing competing for market share.

The key trends driving this growth include the shift towards sustainable aviation, the development of new, fuel-efficient aircraft, and the growth of the aircraft leasing market.

Regional market dynamics are also important, with Asia-Pacific being a key region for growth, and Europe being a significant market for aircraft leasing.

The strategic moves of major manufacturers, including Airbus and Boeing, will be critical in determining their success in the coming decades.

The global air travel industry is expected to recover between 2023 and 2025, driven by increasing demand for air travel and a shift towards greater efficiency and sustainability.

Title:

Content: Orders for Airbus are superior to Boeing.
T + T - normal size
The first major air transport exhibition, since the beginning of the spread of the coronavirus in Dubai, showed a great disparity in terms of trade performance between the European Airbus and the American Boeing as the sector emerges from the crisis that hit it for months.
As with every high-level international gathering in the sector, attention has focused on the two major aircraft manufacturers, who are scrambling to attract orders, but competition in Dubai has not been very intense, as Airbus appeared to have overcome the COVID-19 crisis with orders and agreements announcing intentions to sell 408 new aircraft, surpassing orders from the Paris exhibition in 2019, in exchange for contracts to sell 78 Boeing aircraft. G ".
The European manufacturer has hit hard since the first day of the Dubai show on Sunday with a firm order for 255 single-aisle A-321s, a plane whose range and capacity offer passengers flexibility that increases its appeal to airlines.
Airbus president Guillaume Fawry in Dubai said: “The prospects are beginning to blossom.
Airlines are also starting to look further ahead and prepare for the post-crisis period. ”
While global travel, still at half its 2019 level, is expected to recover between 2023 and 2025, demand for new aircraft should rise in the next 20 years, according to aircraft manufacturers.
Airbus expects to sell 39,000 planes and Boeing 43,000 to cope with the increase in travel and get planes that consume less fuel and thus emit less carbon dioxide.
The U.S. aircraft maker appeared conservatively at the show, announcing in a statement a major order for 72 single-aisle 737-MAX aircraft for India ’ s newly established Akasa Air.
The 737 Max crashes, 787 production problems and delays in the adoption of the future 777X wide-body aircraft caused the company to stumble.
Boeing Commercial Director Ehsan Munir told reporters that “safety and quality will be the guiding principles of everything we do. ”
The company showed at the exhibition the 777X aircraft for the first time outside the United States, in an indication of the near licensing, especially as the Dubai-based Emirates airline alone accounts for a third of the orders on the expected aircraft, but « Boeing » did not announce the start of the process of manufacturing a cargo version of the aircraft, as was hoped in Dubai, noting that this will be « soon ».
Airbus CEO Guillaume Fawry said the range of orders the company received at the Dubai Airshow this week had boosted its hopes of increasing production.
Airbus received 265 confirmed orders at the Dubai show, narrowing the gap with Boeing, which has topped sales this year as its 737 MAX emerges from a safety crisis.
A further 139 temporary orders raised Airbus ’ Dubai tally to more than 400 aircraft, while Boeing picked up firm orders for 72 MAX jets.
Airbus has agreed to increase production to 65 single-aisle aircraft per month by 2023 from an average of 45 scheduled for this quarter.
In addition, Airbus has asked suppliers to consider production rates of 70 aircraft by early 2024 and 75 by 2025, but has not yet made a decision.
Some suppliers have criticized the plans, expressing concern that recovery from the coronavirus epidemic remains incomplete.
Fawry told Reuters in an interview this week: “We are in the process of evaluating the application.
What happened (in Dubai) is important, because it gives, along with expectations and other upcoming deals, evidence that the demand we see for 70 / 75 will continue for many years. ”
The view of demand based on orders received by Airbus and its own assumptions based on conversations with airlines is in line with the picture provided by the new Airbus market outlook published at the show.
Airbus deliveries have fallen in the past three months, partly due to supply chain disruptions.
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As the industry rebounds, aircraft manufacturers are entering a new phase of competition and innovation, with a focus on developing new, fuel-efficient aircraft.

What impact shall the carbon tax to be imposed by EU in 2026 have on aircraft market?

It is conducive to the sales of new aircraft with better fuel efficiency.

What impact shall the carbon tax to be imposed by EU in 2026 have on airlines?

They will accelerate the demand for aircraft replacement.

What is Airbus doing to achieve sustainable aviation?

It is making efforts to improve aircraft efficiency.

It is working on adopting innovative strategies.

Airbus and Boeing are the leading aircraft manufacturers, with Airbus receiving 408 new aircraft orders in Dubai and expecting to sell 39,000 planes in 20 years.

Boeing, on the other hand, expects to sell 43,000 planes in 20 years, but has faced challenges due to the grounding of its 737 Max aircraft.

The global aerospace composites market is also growing, with a market size of $29.95 billion in 2023 and a projected market size of $51.83 billion by 2027, driven by demand for high-strength lightweight materials.

Title:

Content:
Navigating The Skies Of Growth: Global Aerospace Composites Market Insights

(MENAFN- EIN Presswire)

Aerospace Composites Global Market Report 2024 : Market Size, Trends, And Global Forecast 2024-2033

The Business Research Company's Aerospace Composites Global Market Report 2024 – Market Size, Trends, And Global Forecast 2024-2033

The 2024 Global Market Report on Aerospace Composites by The Business Research Company offers insights into market size, trends, and a global forecast spanning 2024-2033.” - The Business Research Company

LONDON, GREATER LONDON, UK, December 25, 2023 /EINPresswire / -- Year End Offer By The Business Research Company - Get 33% Discount On Opportunities And Strategies Reports And 25% Discount On Global Market Reports

Market Overview: Ascending from $26.25 Billion to $29.95 Billion in 2023
The global aerospace composites market experienced robust growth, advancing from $26.25 billion in 2022 to $29.95 billion in 2023, showcasing a remarkable Compound Annual Growth Rate (CAGR) of 14.1%. As the market evolves, it is poised for sustained expansion, projecting a market size of $51.83 billion by 2027, with a CAGR of 14.7%.

The global aerospace composites market is soaring to new heights, characterized by diverse fiber types, aircraft categories, manufacturing processes, resin varieties, and applications:
1 Fiber Type:
.Carbon Fiber Composites
.Ceramic Fiber Composites
.Glass Fiber Others
2 Aircraft Type:
.Commercial Aircraft
.Business & General Aviation
.Civil Helicopter
.Military Others
3 Manufacturing Process:
.AFP/ATL
.Lay-Up Process
.Resin Transfer Moulding Process
.Filament Winding Others
4 Resin Type:
.Benzoxazine
.Cyanate Ester
.Bismalimide
.Ceramic and Metal Matrix
.Thermosetting Others
5 Application:
.Interior
.Exterior

Explore the market with a detailed sample report:

Driving Force: Demand for High-Strength, Lightweight Materials The surge in demand for high-strength and lightweight composite materials is steering the aerospace composites market forward. The pursuit of energy efficiency and reduced fuel consumption is achieved through the use of lightweight materials, minimizing the aircraft's mass. This, in turn, leads to enhanced flight performance, structural strength, and stiffness, contributing to reduced carbon footprints. According to the '2020 State of the Industry Report' by Composites Manufacturing Magazine, the US composite end products market is anticipated to reach $33.4 billion by 2025, with glass fiber-based composites dominating the market.

Key Players Shaping the Horizon Major players shaping the aerospace composites market include Solvay, Toray Industries Inc., Mitsubishi Chemical Holdings, Hexcel Corporation, Teijin Limited, SGL Group, Spirit AeroSystems, Materion Corporation, Owens Corning, Spirit AeroSystems Inc., LEE Aerospace Inc., Gurit Holding AG, General Electric Corporation, Rolls-Royce Motor Cars Ltd., Kineco-Kaman Composites, and Nippon Graphite Fiber Corporation. These industry leaders contribute to market dynamics and foster innovation in composite material and process technologies.

Innovation Trends: Technological Advancements and Consortium Initiatives Companies in the aerospace composites market are steering their focus towards technological advancements to accelerate the development of next-generation aircraft and future mobility. Technologically advanced and modern aircraft, equipped with increased payload capacities and cost-efficiency, are replacing outdated models. For instance, GKN Aerospace, a UK-based company, launched the ASCEND consortium to advance lightweight structures, positioning the UK as a technology leader in future aerospace technologies. This initiative contributes to reducing carbon emissions and energy consumption in the aerospace industry.

Explore detailed insights into market trends, innovations, and growth opportunities with the complete report:

Regional Dynamics: North America Takes the Lead in 2022
In 2022, North America emerged as the largest region in the aerospace composites market. As the market evolves, Asia-Pacific is poised to be the fastest-growing region, offering significant opportunities for market players. The regions covered in the aerospace composites market report include Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.

Aerospace Composites Global Market Report 2023 from TBRC covers the following information:
.Market size date for the forecast period: Historical and Future
.Market analysis by region: Asia-Pacific, China, Western Europe, Eastern Europe, North America, USA, South America, Middle East and Africa.
.Market analysis by countries: Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.

Trends, opportunities, strategies and so much more.
The Aerospace Composites Global Market Report 2023 by The Business Research Company is the most comprehensive report that provides insights on aerospace composites market size, aerospace composites market drivers and trends, aerospace composites market major players, competitors' revenues, market positioning, and market growth across geographies. The aerospace composites market report helps you gain in-depth insights on opportunities and strategies. Companies can leverage the data in the report and tap into segments with the highest growth potential.

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The market is expected to grow at a Compound Annual Growth Rate (CAGR) of 14.7% from 2023 to 2027, with North America being the largest region in 2022 and Asia-Pacific being the fastest-growing region.

Key players in the aerospace composites market include Solvay, Toray, Mitsubishi, Hexcel, and Teijin, with technological advancements focusing on next-generation aircraft development.

The aviation industry is also shifting towards sustainable aviation, with a goal of achieving net-zero emissions by 2050, requiring significant changes and investments in alternative fuels and technologies.

Title:

Content: Powering the sustainable aviation revolution

Atkins aerospace experts predict 44,000TWh of energy will be needed annually by 2070 to produce new, sustainable aviation fuell

A recent report released by sustainable aviation experts at Atkins, a member of the SNC-Lavalin Group, has cautioned that meeting the net zero targets set for 2050 in the aviation industry will necessitate significant changes in sustainable energy and fuel production infrastructure, particularly if commercial air transport continues to expand as expected.

The white paper, titled "Alternative Fuels for Sustainable Aviation," highlights that reducing carbon emissions in the aviation sector is not solely dependent on aircraft emissions. The report recommends the use of a mixture of alternative fuel options such as SAF, eFuel, Hydrogen, and batteries to achieve the most effective solution.

However, it also warns that the industry must be ready for the significant implications of utilising these alternative fuels and batteries to achieve the most effective solution. However, it also warns that the industry must be ready for the significant implications of using these alternative fuels and emphasises the significant impact on future energy demand that will be required to produce them.

Will we be generating enough aircraft fuel?

Based on estimated energy efficiencies and the predicted fuel mix, Atkins predicts that generating the necessary global aircraft fuel demand will require 44,000 TWh of energy per year by 2070. This represents a 5700% increase from current aviation energy generation requirements and is almost double the world’s current electricity demand.

It's not just energy generation that is now a concern, other considerations, such as fuel transportation and storage requirements, will also have to be taken into account.

Andrew Caughey, Sustainable Aviation Lead – Aerospace, Atkins says: “Aviation emissions are hard to abate, but not impossible. The sector is making huge strides in its efforts to accelerate the development of new fuels and aircraft that will help deliver zero emission flight. These advances have a wider impact beyond the aerospace industry. Whilst the future mix of low carbon alternative fuel is yet to be determined, the production, storage and transportation of fuels has implications for energy and airport infrastructure and their emissions need to be considered across the whole lifecycle, from ‘source to force’.

“Regions, governments, airports and the wider industry must adopt a holistic approach to scenario modelling when creating masterplans for the infrastructure and ecosystems that will drive the future of sustainable aviation. By understanding the full fuel mix and energy demands for sustainable aviation, governments can use the insight to inform their policy makers and actions – whether that be introducing emissions KPIs, green fuel subsidies, demand management or investing in innovation and development. Integrated system-level planning is vitally important in achieving the transition and must take into account future energy predictions.”

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Atkins predicts that 44,000 TWh of energy will be needed annually by 2070 for sustainable aviation fuel, which is almost double the world's current electricity demand.

Etihad Airways is aiming to achieve net-zero emissions by 2050, with a goal of cutting 2019 emissions in half by 2035, and has already flown its most sustainable flight ever with 72% reduced emissions.

Title:

Content: An Etihad Airways Boeing 787-10 Dreamliner nicknamed the "Greenliner" at the Dubai Airshow 2021
Thomas Pallini/Insider
  • Etihad Airways CEO Tony Douglas believes that airlines that don't focus on sustainability may be forced out of business.
  • More leisure travellers and businesses are focusing on the emissions of their travel and choosing green airlines.
  • Etihad is one of the airlines leading the charge in creating a sustainable future for aviation.
  • For more stories go to www.BusinessInsider.co.za.

Etihad Airways is betting all of its chips on sustainable aviation, and says that airlines that aren't doing the same might soon be "history."

Tony Douglas, Etihad's chief executive officer, told Insider at the Dubai Airshow in November that airlines will soon compete on environmental performance, and those that aren't making changes now could lose future customers.

"Increasingly, travellers will make choices that do include carbon emissions and therefore, the environmental performance [of their airline,]" Douglas said. "The people that don't respond in the sort of ways that we've been doing may well be history."

Etihad's ultimate goal is to achieve net-zero emissions by 2050 and cut its 2019 emissions in half by 2035.

The airline knows how to cut back on emissions but mastering the balancing act between environmental sustainability and economic sustainability remains elusive.

On October 23, Etihad flew its self-described "most sustainable flight ever" from London to Abu Dhabi, UAE in which it reduced emissions by 72% to a similar flight two years prior. From reducing plastic waste by using plant-based water bottles to reducing fuel burn by obtaining a more direct air route, the airline was able to reduce waste and save around 64 tonnes of carbon dioxide emissions.

A mixture of 62% traditional jet fuel and 38% sustainable aviation fuel, or SAF for short, powered the flight for additional carbon savings.

But replicating those sustainable conditions on every flight would be too costly for Etihad and the airline "would be insolvent within about 20 minutes," Douglas said, based on the cost of sustainable aviation fuel alone.

"The reason why we actually do these flights is to draw people's attention to the much larger challenges here," Douglas said. "Whilst I can predict an end to the pandemic… I actually don't predict an end to the challenge of commercial aviation sustainability."

Sourcing and using sustainable aviation fuel was a challenge as the fuel was brought in from Amsterdam and Etihad wasn't even able to fill the plane with as much of the biofuel as it wanted.

"There's no infrastructure to be able to deliver [SAF] directly to aircraft," Douglas, the former chief executive officer of Heathrow Airport, said. "You can't get prices down until availability goes up, but you're not going to get availability to go up until you get prices down."

Etihad's focus on sustainability came as a result of a restructuring plan undertaken by the airline after failed investments in foreign carriers such as Alitalia, Jet Airways, and Air Berlin, all of which have permanently ceased flying.

"The fallout from that was a transformation plan which had to radically reshape, resize, and get us on a sustainable footing," Douglas said of the investments. "It was analogous to open-heart surgery on the balance sheet."

That plan included a fleet renewal centered around leading next-generation aircraft from Airbus and Boeing.

Boeing's  787 Dreamliner, which Etihad nicknamed the "Greenliner," is currently Etihad's leading long-haul aircraft. Airbus' A350-1000 XWB aircraft, or the "Sustainable Fifties" in Etihad parlance, joined the fleet in 2019 but won't fly passengers until 2022.

An Etihad Airways Boeing 787-10 Dreamliner nicknamed the "Greenliner" at the Dubai Airshow 2021
Thomas Pallini/Insider

Etihad travellers are now being incentivised to make sustainable choices with the launch of the airline's "green loyalty" programme. Travellers with smaller carbon footprints, whether it be those travelling without extra luggage, will receive extra frequent flyer miles.

"The idea that this gets passed through to ticket prices to our guests, the travelling public, I actually find reprehensible," Douglas said of so-called green taxes on travellers. "There is a societal need to travel and therefore, penalising the passenger through increased ticket pricing I actually struggle with conceptually in one sense."

Competing airlines are "welcome" to copy Etihad's sustainable game plan, Douglas said, warning that those that don't might lose major corporate clients that are adopting new environmentally-friendly travel policies.

"I kind of feel for them because not everybody has the ability to do so," Douglas said of competitors that aren't taking sustainable measures. "Having said that, I think going forward it will be the principle differentiator of who succeeds and who fails.

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The airline used 38% sustainable aviation fuel for the flight, but notes that sustainable aviation fuel is currently too costly for widespread use.

The United Nations is also aiming for net-zero emissions by 2050, with the aviation industry contributing 2% of global emissions, and Azul airline aiming for net-zero emissions by 2045.

Title:

Content: Advertisment

UN Secretary-General Urges Aviation Industry to Embrace a Carbon-Neutral Future

UN Secretary-General António Guterres called for the aviation industry to transition to clean energy and align with the ICAO's goal of net-zero emissions by 2050 at the Sustainable Regional Aviation Forum.

BNN Correspondents
New Update

United Nations Secretary-General António Guterres issued a clarion call to the aviation industry at the Sustainable Regional Aviation Forum in São Miguel, Portugal. Amidst a backdrop of the hottest year on record, Guterres highlighted the need for the aviation industry to transition from fossil fuels to clean energy sources and align with the International Civil Aviation Organization's (ICAO) ambitious goal of net-zero emissions by 2050.

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Aviation's Decarbonization Challenge

Despite being a significant pillar of global connectivity and economic sustainability, the aviation industry is notorious as one of the most challenging sectors to decarbonize, contributing to 2% of global emissions. Guterres underscored that the path towards a carbon-neutral future entails more than just offsetting emissions. The industry must actively reduce its carbon output.

Leading the Charge Towards a Carbon-Neutral Future

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The Sustainable Regional Aviation Forum presented an ideal platform for industry leaders and policymakers to deliberate on practical strategies towards achieving a carbon-neutral future. Guterres emphasized the need for developing clean fuel sources, implementing smart economic policies, and enacting regulations to support a just and equitable transition. This transition should include carbon pricing and subsidies for sustainable aviation fuels.

Significant Strides Towards Sustainability

Positive steps are already underway. Brazilian airline, Azul, has been lauded for its climate neutrality plans, approved by the Science Based Targets Initiative (SBTi). Azul aims to achieve net-zero emissions by 2045, five years ahead of the broader industry target. Furthermore, the First Movers Coalition, a global public-private partnership, has garnered over 120 commitments from 96 members to decarbonize the world's heavy-emitting sectors, with a collective estimated annual demand of $16 billion for emerging climate technologies.

In addition to these, a report titled 'The Potential Role of Ammonia as a Low Carbon Aviation Fuel' has highlighted the potential of ammonia as an alternative low carbon fuel for the aviation sector, further expanding the horizons of sustainable aviation. Guterres' call to action at the Forum is a pivotal moment in the ongoing narrative of aviation and sustainability, indicating a renewed global commitment to tackling the climate crisis head-on.

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The First Movers Coalition has 120 commitments for decarbonization, and ammonia is being considered as a potential low-carbon aviation fuel.

The International Civil Aviation Organization (ICAO) has set a goal of net-zero emissions by 2050, and carbon pricing and subsidies are being used to support sustainable aviation.

The aerospace industry is also being driven by technological advancements, with a focus on digitalization and connectivity, and airlines prioritizing fuel-efficient and environmentally friendly aircraft.

Title:

Content: IIMB & TBS host eighth edition of International Conference on the Future of Aviation and Aerospace

The conference had keynote addresses and six expert panels on subjects, ranging from MROs to drones to talent management in the aviation sector

April 24, 2024 09:00 am | Updated 09:00 am IST - Bengaluru

Dignitaries from the event.  | Photo Credit: SPECIAL ARRAGEMENT

Over 300 senior executives from the aerospace and aviation sector participated in the 2024 edition of the International Conference on the Future of Aviation and Aerospace, hosted by IIM Bangalore and Toulouse Business School France, recently. The conference had keynote addresses and six expert panels on subjects, ranging from MROs to drones to talent management in the aviation sector.

The first panel on ‘The Impact of Macroeconomic Environment on Aviation and Aerospace’ featured Prof. Chetan Subramanian, RBI Chair Professor of Economics at IIMB, Dr. Srinivasan Dwarakanath, Former CEO & MD, Airbus India Operations, and Kallappa Pattada, Executive Director, Boeing India Engineering.

In his presentation on the macroeconomic view, Prof. Subramanian highlighted some of the headwinds like COVID, inflation caused by shortage of supply, wars and elections, and their connection with the aviation sector. Dr. Dwarkanath discussed the impact of black swan events like COVID, geopolitical challenges, currency rate, and regulatory environment on growth in the aerospace and aviation sector, said a release.

The panel on the ‘Future of Global and Local Aviation Market’ featured Dr. Srinivasan Dwarkanath, Former CEO & MD, Airbus India Operations, and Sunil Bhaskaran, Director, Air India Aviation Academy, and was moderated by Prof. S. Raghunath.

Sunil Bhaskaran, who spoke of the trends that will define the shape of the airline industry in the years to come, listed customer-centricity, data and analytics, sustainability, distribution capability, fleet and network, alliances and partnerships, and talent.

Amber Dubey, Senior Advisor, McKinsey & Company, and the man who piloted the drone policy for India as Joint Secretary, Ministry of Civil Aviation, Govt of India, commented, “The drone sector has grown exponentially, especially for use in agriculture. We were aiming at ‘har haath mein phone; har khet mein drone’. Women practising agriculture in villages are given training free of cost and incentivized to use this technology. The biggest benefit of drones is the ability to supply medicines in remote areas. But the biggest issue continues to be with security and tracking.”

The panel on ‘Fly Net Zero by 2050’ featured Chris Krishnaswamy, Systems Engineering Principal (Digital 145), Sasikumar Muthusamy, Senior Director, Global Engineering at Collins Aerospace, and Uma Maheshwar, Chief Consulting Engineer, GE Aerospace Engineering India, who discussed the challenges that disruptive technologies must overcome to reach net zero goals.

The other two panel discussions included, ‘High Stakes in the Sky’ and ‘The Era of the Evolved Employee.’

Among the dignitaries were the Consul General of France Thierry Berthelot, Prof. Christopher Benaroya, from Toulouse Business School France, and the top leadership of IIMB.

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What impact shall the carbon tax to be imposed by EU in 2026 have on aircraft market?

It is conducive to the sales of new aircraft with better fuel efficiency.

What is Airbus doing to achieve sustainable aviation?

It is making efforts to improve aircraft efficiency.

It is working on adopting innovative strategies.

The global single-aisle aircraft market is expected to reach $222.20 billion by 2030, growing at a CAGR of 12.5% from 2023-2030, with Asia-Pacific being the largest region.

Title:

Content: Friday, 08 September 2023 05:25 GMT

Global Single-Aisle Aircraft Market Is Projected To Reach The Value Of $222.20 Billion By 2030 X Herald

(MENAFN- Ameliorate Digital Consultancy) According to the latest report by Virtue Market Research, in 2022, the Global Single-Aisle Aircraft Market was valued at USD 86.6 billion and is projected to reach a market size of USD 222.20 billion by 2030. Over the forecast period of 2023-2030, the market is projected to grow at a CAGR of 12.5%.

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A prominent long-term driver for the Single-Aisle Aircraft market is the growing global demand for air travel. Even though the COVID-19 pandemic had a severe impact on the aviation industry, the long-term trend remains robust. The demand for single-aisle aircraft is fueled by several factors, including the expansion of low-cost carriers, increasing urbanization, and rising middle-class populations in emerging economies.

The COVID-19 pandemic had an unprecedented impact on the aviation sector, leading to grounded fleets, reduced passenger demand, and financial strain on airlines. This setback prompted airlines to rethink their fleet strategies, with some deferring aircraft orders and retiring older aircraft to cut costs. Additionally, the pandemic accelerated the adoption of safety and hygiene measures in aircraft cabins, leading to increased investments in cabin air filtration and touchless technologies.

A notable short-term driver for the Single-Aisle Aircraft market is the rebound in domestic and regional air travel. As countries reopen their borders and vaccination efforts progress, there is a growing preference for shorter flights, leading to increased demand for single-aisle aircraft. Airlines are reactivating grounded aircraft and placing orders for new, fuel-efficient models to meet this surge in regional travel.

An exciting opportunity in the Single-Aisle Aircraft market is the development of next-generation, fuel-efficient aircraft. With a growing emphasis on sustainability and reducing carbon emissions, aircraft manufacturers are investing in research and development to create more eco-friendly models. This includes the use of advanced materials, aerodynamic improvements, and more efficient engines. Airlines that invest in these next-gen aircraft can not only reduce their environmental footprint but also benefit from lower operating costs in the long run.

One of the prominent trends observed in the Single-Aisle Aircraft industry is the rise of digitalization and connectivity. In-flight Wi-Fi, entertainment systems, and integrated passenger services are becoming standard features in modern single-aisle aircraft. Airlines are leveraging these trends to enhance the passenger experience and gain a competitive edge. Additionally, digitalization plays a crucial role in aircraft maintenance and operations, helping airlines optimize their fleet performance and reduce downtime.

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Segmentation Analysis:

The global Single-Aisle Aircraft Market segmentation includes:

By Type of Aircraft: Narrow-Body, Wide-Body, Regional Aircraft

Among these, the Narrow-Body aircraft category stands out as the largest segment. These aircraft are designed for short to medium-haul flights and are favored by airlines for their versatility and cost-efficiency. Narrow-Body aircraft are well-suited for both domestic and international routes, making them the preferred choice for many carriers.

In terms of growth, the Narrow-Body segment takes the lead yet again. The market for Narrow-Body aircraft is witnessing significant expansion due to the increasing demand for regional and domestic travel. Airlines are looking to replace older aircraft with more fuel-efficient and environmentally friendly Narrow-Body models, driving the growth of this segment.

By Engine Type: Turbofan, Turboprop

Among these categories, Turboprop engines are the largest segment. These engines are commonly found in regional aircraft that operate shorter routes and require a different set of performance characteristics compared to their Turbofan counterparts. Turboprop engines are known for their fuel efficiency and reliability, making them a preferred choice for regional carriers.

However, when it comes to growth, Turbofan engines take the lead. The demand for Turbofan-powered Single-Aisle Aircraft is on the rise, driven by the need for higher efficiency, reduced emissions, and greater operational range. Airlines are increasingly opting for Turbofan engines in their narrow-body aircraft to meet the growing demand for longer-haul regional and international flights.

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Regional Analysis:

The Single-Aisle Aircraft market spans across variregions, including North America, Europe, Asia-Pacific, South America, and the Middle East & Africa. Each of these regions has its unique characteristics and influences on the market.

Asia-Pacific emerges as the largest region in this segment. This region encompasses numerfast-growing economies, a burgeoning middle class, and a robust travel and tourism industry. As a result, airlines in Asia-Pacific have been expanding their fleets to meet the increasing demand for air travel. With a foon domestic and regional routes, narrow-body aircraft have been particularly favored in this region, contributing to its leadership in the Single-Aisle Aircraft market.

In terms of growth, Europe takes the lead. Despite being a mature aviation market, Europe is experiencing a surge in demand for narrow-body aircraft, primarily due to the need for more fuel-efficient and environmentally friendly options. European airlines are increasingly looking to modernize their fleets with state-of-the-art single-aisle aircraft, thereby driving the growth of this segment in the region.

The Middle East & Africa region also shows promise in terms of growth, driven by the emergence of airlines in the Middle East as major global players. These airlines are expanding their networks and investing in modern, fuel-efficient narrow-body aircraft to meet the growing demand for long-haul travel.

North America, with its well-established aviation industry, continues to be a significant market for single-aisle aircraft. While it may not be the fastest-growing region, North America remains a stable and vital market for these aircraft, catering to both domestic and international routes.

South America, although a smaller market compared to the other regions, also contributes to the demand for single-aisle aircraft. Airlines in South America are focusing on modernizing their fleets to enhance operational efficiency and reduce emissions.

Latest Industry Developments:

  • One of the key strategies adopted by companies is a strong emphasis on fuel-efficient and environmentally friendly aircraft. With the aviation industry facing increasing pressure to reduce carbon emissions, manufacturers are investing in the development of next-generation single-aisle aircraft with improved fuel efficiency. This includes the use of advanced materials, aerodynamic design enhancements, and the incorporation of more fuel-efficient engines. Furthermore, there is a growing trend towards the electrification of aircraft systems, including electric taxiing systems and more electric aircraft architectures. These innovations aim to reduce the overall carbon footprint of single-aisle aircraft, aligning with global sustainability goals.
  • To enhance their market share, aircraft manufacturers are expanding their global reach and customer base. They are targeting emerging markets with fast-growing air travel demand, such as Asia-Pacific and the Middle East. These regions represent significant opportunities for fleet expansion, especially with narrow-body aircraft designed for short- to medium-haul routes. Another trend is fleet modernization. Airlines, particularly in mature markets like North America and Europe, are retiring older aircraft and replacing them with state-of-the-art single-aisle aircraft. This trend is driven by the need to improve operational efficiency, reduce maintenance costs, and enhance passenger comfort. Manufacturers that offer the latest technology and fuel-efficient options have a competitive advantage in this regard.
  • Connectivity and digital solutions are becoming increasingly important in the aviation industry. Airlines are seeking aircraft equipped with advanced connectivity options to enhance the passenger experience, provide in-flight entertainment, and enable seamless inteaccess. Manufacturers are responding by integrating cutting-edge connectivity solutions into their single-aisle aircraft offerings. Additionally, the use of data analytics and predictive maintenance has gained prominence. Airlines are leveraging data from their aircraft to optimize operations, reduce downtime, and lower maintenance costs. Aircraft manufacturers are incorporating these features into their products to meet the demand for data-driven solutions.

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The market is driven by growing global demand for air travel, and aircraft manufacturers are investing in next-generation fuel-efficient models.

What impact shall the carbon tax to be imposed by EU in 2026 have on aircraft market?

It is conducive to the sales of new aircraft with better fuel efficiency.

What is Airbus doing to achieve sustainable aviation?

It is making efforts to improve aircraft efficiency.

Boeing expects 41,170 aircraft demand over 20 years, while Airbus forecasts 39,490 aircraft sales by 2041, with Boeing cutting its demand estimate due to a saturated aviation market.

Title:

Content: ECONOMY
Boeing cuts its estimate of demand for new aircraft for the next 20 years
Thank you for reading the news that Boeing is reducing its estimate of the demand for new aircraft for the next 20 years and we assure you that we are always seeking to satisfy you and now with the details
Boeing expects global demand for new aircraft to rise until 2031, but has cut its industry-wide forecast for the next 20 years in the company's latest market outlook.
Boeing said in an annual market forecast released ahead of the Farnborough International Airshow in England that aircraft manufacturers are expected to deliver about 19,575 new passenger and cargo aircraft between 2022 and 2031.
Boeing now expects global demand to reach 41,170 aircraft over the next two decades, up from 43,610 a year ago, a drop even when taking into account Russian aircraft.
It based its forecast on lower growth and a more saturated aviation market in the second decade.
Unlike Boeing, Airbus expects there will be a greater need for new aircraft over the next 20 years than at last.
In its market forecast published a few days ago, it forecast sales of 39,490 aircraft by 2041, 470 more than last year's estimate to 2040.
Prospects for aircraft sales in the next 20 years:
Boing
AERBUS
Expect lower demand
41.17 thousand aircraft.
43.61 thousand aircraft a year ago
AERBUS
Expect high demand.
39.49 thousand aircraft
39.02 aircraft a year ago.
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Airbus, on the other hand, has increased its forecast by 470 aircraft from last year, predicting higher demand for new aircraft.

The aircraft leasing market is also growing, with a market size expected to exceed $453.2 billion by 2026, growing at a rate of 6.8% during the forecast period.

Title:

Content: Aircraft Leasing Market Overview by Recent Opportunities, Growth Size, Regional Analysis and Forecasts to 2032

The global aviation industry is experiencing unprecedented growth, fueled by increasing air travel rates and the demand for efficient aircraft. In tandem with this growth, the aircraft leasing market has emerged as a critical component of the aviation ecosystem, providing airlines with flexible leasing options to meet their fleet requirements. A recent report by Report Ocean forecasts that the aircraft leasing market size is poised to exceed USD 453.2 billion by 2026, with a robust growth rate of 6.8% during the forecast period.

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Driving Factors Behind Market Growth

The surge in air travel rates is a primary driver propelling the demand for aircraft leasing. Airlines are opting for leasing arrangements to expand their fleets and meet the escalating demand for air travel. Aircraft leasing offers flexibility and cost-effectiveness compared to outright aircraft purchases, enabling airlines to optimize their fleet size based on fluctuating market conditions.

Aircraft leasing encompasses two primary lease types: dry lease and wet lease. In dry leasing, aircraft are leased without crew members, while wet leasing involves leasing aircraft along with trained crew, maintenance, and insurance. This flexibility allows airlines to tailor leasing agreements to their specific operational needs, further driving the adoption of aircraft leasing.

Additionally, factors such as the growth in global aviation industry, increasing regulations, demand for fuel-efficient commercial aircraft, attractive tax policies, and affordable lease rates contribute to the burgeoning aircraft leasing market. Emerging economies present significant growth opportunities for aircraft leasing, with technological advancements further enhancing the appeal of leasing options.

Regional Insights and Market Dynamics

Europe emerged as the highest revenue-generating region in the aircraft leasing industry in 2019, driven by high disposable income, advanced living standards, and the development of new aircraft. The region witnessed increasing adoption of aircraft leasing due to the operation of efficient commercial aircraft and technological advancements. However, North America is also a significant market for aircraft leasing, with well-established aviation infrastructure and a robust demand for air travel.

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Asia-Pacific is poised to exhibit substantial growth in the aircraft leasing market, propelled by countries such as China, India, and Japan. Rising air traffic, economic development, and increasing demand for air travel in the region contribute to the growing adoption of aircraft leasing. Latin America, the Middle East, and Africa also present lucrative opportunities for market players, driven by factors such as infrastructure development and tourism growth.

Competitive Landscape and Key Players

The global aircraft leasing industry is characterized by the presence of both international and small to medium-sized vendors. Leading companies such as Aviation Capital Group, Boeing Capital Corporation, Air Lease Corporation, and International Lease Finance Corporation dominate the market. These companies continually innovate and collaborate with other industry players to meet the evolving needs of consumers and launch new products to stay competitive.

Segmentation and Market Outlook

The aircraft leasing market is segmented based on lease type, aircraft type, and region. Dry leasing and wet leasing represent the primary lease types, catering to the diverse needs of airlines. Aircraft types include wide-body aircraft and narrow-body aircraft, each serving specific operational requirements. Regionally, North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa constitute the key market segments, offering insights into regional market dynamics and growth prospects.

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Future Outlook and Conclusion

In conclusion, the global aircraft leasing market is poised for significant growth driven by increasing air travel rates, demand for fuel-efficient aircraft, and favorable market conditions. As airlines seek to optimize their fleets and enhance operational efficiency, aircraft leasing emerges as a strategic solution to meet evolving market demands. With technological advancements and infrastructure development, emerging economies present lucrative opportunities for market players. As the aviation industry continues to soar to new heights, aircraft leasing remains a vital component facilitating the expansion and modernization of airline fleets worldwide.

These responses will function a complete examination of the:

  • The markets’ present-day infrastructures
  • Market possibilities and challenges
  • Future plausible for increase in particular industries
  • Major geographic and market segments to target, and end-user goal organizations and their viable operational volumes
  • Representative and a price chain probability breakdown
  • Market dimension and boom price during the expected time frame.
  • The market’s important using forces
  • Key market traits are impeding market expansion.
  • Obstacles to market expansion.
  • Market’s pinnacle merchants.
  • Thorough SWOT analysis
  • Threats and possibilities confronted with the aid of the modern carriers in the world market.
  • Trending elements that affect the markets in the quite a number region.
  • Initiatives with a strategic center of attention on the pinnacle vendors.
  • PEST find out about of the five essential market regions.

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(*Note: The historical years and projected period in the report are flexible and can be tailored upon request. Additionally, the scope of the published report is adjustable to meet specific requirements, and customized analyses based on particular geographies or countries can be included as part of the customization.)

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Europe is the highest revenue-generating region in aircraft leasing, while Asia-Pacific is expected to exhibit substantial growth.

Leading companies in the aircraft leasing market include Aviation Capital Group and Boeing Capital Corporation.

The market is driven by increasing air travel rates and demand for fuel-efficient aircraft, with dry leasing and wet leasing being the primary lease types.

Fossil fuels currently account for 12% of total energy demand in the transport sector, but the aviation sector is shifting towards low-carbon jet fuel, which is at least 10% less carbon-intensive than commercial jet fuel.

Title:

Content: 12% of the total demand for fossil fuels from the aviation sector
2022 / 10 / 22 | 15: 16 - Source: Yes Iraq
(This is news from Iraq.)
YES IRAQ: FOLLOW
A virtual seminar hosted by the King Abdullah Petroleum Studies and Research Center (KAPSARC) discussed the drivers of increased energy demand in the aviation sector and the future of jet fuel.
The participants revealed that fossil fuels dominated the demand of the global aviation sector, accounting for about 12% of the total energy demand in the transport sector, second only to the road transport sector, noting that the traditional fossil fuels used in the road transport sector are being replaced by low-carbon alternatives.
The ICAO Carbon Offsetting and Reduction Plan for International Aviation has long-term objectives for the aviation industry, based on developments in aircraft technologies, operational and infrastructure improvements, and measures that include compensatory mechanisms, sustainable jet fuel and low-carbon jet fuel.
According to the seminar, the aviation sector transported more than $7 trillion in goods in 2019, in addition to transporting 4 billion passengers, as the pace of demand for aviation increased significantly in regional, local and international markets, creating about 70 million jobs in aviation and related industries in the world, but the pandemic caused the largest decline in the pace of demand in recent decades.
Before the COVID-19 pandemic, the aviation industry was characterized by affordable travel for consumers, leading to increased connectivity rates, while airlines made efforts to enhance efficiency through the passenger load factor, but it did not apply to cargo, noting that lower consumer prices increase efficiency and unit performance, i.e. lower emissions per passenger per kilometer.
They added that it is difficult for airlines to raise prices to increase revenues because the airline industry has become highly competitive even for routes they own, and the potential entry of new airlines and network structures puts more pressure on airlines, explaining that the pressure comes from rival airlines that go to the same destinations, but using alternative routes and as a result, competition in the aviation sector has intensified.
The participants pointed out that airlines aim to buy more airlines to control the market, avoid losing market share, and turn them into larger organizations using a variety of business models, noting that technical development, increased operational efficiency and the spread of alternative fuels in the future will play a critical role in creating more efficient aviation systems around the world. is an ongoing challenge in the years ahead.
They explained that the development of urban air mobility solutions through electric vertical take-off and landing technology of the future will depend to a large extent on the right policy framework being implemented.
They noted that the aviation industry and manufacturers are still working to address the current challenges associated with market evolution, new technologies and the use of fossil fuel-based fuels, and the deployment of non-fossil fuels and other alternative sources such as hydrogen and electric power, calling for policies and incentives to play a major role in supporting the global transformation of aviation to become more environmentally sustainable.
Participants stressed that the use of renewable energy at the stages of the low-carbon aviation fuel supply chain can reduce the carbon intensity of low-carbon aviation fuel, noting that this includes the use of renewable energy sources in oil fields and refineries and carbon capture and storage to reduce refinery emissions.
Recent studies of the world ’ s 9,000 oil fields and refineries at 500 refineries have shown that carbon intensity can be reduced by three factors: innovation-oriented policy formulation, the development and consumption of low-emission fuels, and the use of different technologies to reduce emissions.
Low-carbon jet fuel is at least 10% less carbon-intensive than commercial jet fuel.
They pointed out that the use of cooking oil as a biofuel for aircraft depends on the quantities used more than once, which may be limited availability, while electronic fuel has a low carbon intensity due to the level of emissions of commercial aircraft to zero in the combustion process, as well as the use of this type of fuel for renewable energy sources.
Participants noted that there is only one commercial technology for sustainable aviation fuel: the path of hydrogen-treated esters and fatty acids, so these esters will remain the main source of sustainable low-carbon aviation fuel over the next decade, while other technologies rely on facilities that are either under construction or at an early stage of commercial readiness.
Colloquium participants predicted that fully commercial technologies would be three to four times more expensive than the cost of the path of hydrogen-treated esters and acids.
While the price gap between sustainable jet fuel and conventional jet fuel is significant, the production of sustainable jet fuel through co-processing, which is not widely used in existing refineries, will become critical, particularly in areas where raw materials are available.
They pointed out that the main obstacle to sustainable aviation fuel, which prevents it from benefiting a real environment, is the way it is produced, pointing out that although sustainable aviation fuel is a key enabler to meet the industry ’ s emissions reduction aspirations, it helps the industry achieve the maximum reduction of carbon emissions.
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What is the main objective of the ReFuelEU Aviation initiative?

To increase demand and supply for sustainable aviation fuel

The International Civil Aviation Organization (ICAO) has long-term objectives for the aviation industry's carbon reduction, and airlines are aiming to increase efficiency through passenger load factor.

Competition in the aviation sector has intensified due to new airlines and routes, and urban air mobility solutions depend on the right policy framework.

Renewable energy can reduce the carbon intensity of low-carbon aviation fuel, and sustainable aviation fuel production is critical to reducing carbon emissions.

What is Airbus doing to achieve sustainable aviation?

It is investing in sustainable aviation fuel production projects.

What is the main objective of the ReFuelEU Aviation initiative?

To increase demand and supply for sustainable aviation fuel

Based on these trends and forecasts, it appears that Airbus is well-positioned to capitalize on future demand for new, fuel-efficient aircraft, with a strong order book and a focus on sustainable aviation.

Title:

Content: Boeing seems unable to keep up with its rival Airbus | Mint

Boeing seems unable to keep up with its rival Airbus

Summary

  • An Alaska Airlines Boeing 737 Max mishap has revived safety concerns. It would be ironic if Airbus were to adopt Boeing’s focus on shareholder returns.

When Boeing was building a seemingly unassailable position in commercial aviation in the 1960s and 70s, passengers’ faith in its relentless focus on quality inspired the slogan “If it ain’t Boeing, I ain’t going." After the latest calamity to befall the company—the in-flight blowout of a 737 Max door plug of a plane operated by Alaska Airlines that fortunately wasn’t fatal, unlike the two crashes involving 737 Max jets in 2018 and 2019— aviation needs a new catchphrase that encapsulates Boeing’s shattered safety reputation and the ascendance of its sole big rival. This flier suggests, “If it ain’t Airbus, the regular bus will do just fine."

In the wake of the Lion Air and Ethiopian Airlines disasters, I wrote that the Airbus-Boeing duopoly had become “extremely unbalanced." At this point, I’m running out of hyperbole to describe the starkly diverging fortunes of the two aircraft makers.

Notwithstanding a punishing pandemic and supplier difficulties that have slowed Airbus’ advance, on just about every metric the European firm is trouncing its US rival [whose CEO has reportedly admitted a “mistake" related to the Alaska Airlines incident]. Barring an unforced error, it’s hard to see Boeing catch up.

Airbus’s rise reminds me of the allegory of the tortoise and the hare. For a long time, investors were transfixed by Boeing’s superior financial performance which Airbus struggled to match. The European company was formed via the merger of assorted national aerospace units, meaning Airbus’ factories were spread across several countries and governments were always interfering to ensure they weren’t disadvantaged. Though it enjoyed impressive sales success, thanks to innovations such as fly-by-wire, Airbus was forever engulfed with international bribery allegations or financial albatrosses such as the A380 superjumbo. But Airbus’ persistence paved the way for the mess Boeing is in today. The 2010 launch of a more fuel-efficient version of the single-aisle A320 known as the Neo prompted its archrival to hurry its riposte, the 737 Max, leading to design compromises that may have played a role in the two crashes.

The grounding of the 737 Max helped Airbus add to its lead in single-aisle jets— the industry’s cash cow. The European firm has capitalized on trade tensions that forced Boeing to pause deliveries to China and caused a long hiatus in Chinese orders. While Airbus executives said at the Paris air show in June that the duopoly is “alive and kicking," analysts at RBC Capital Markets expect Airbus to account for 60% of narrow-body plane deliveries until 2026. Boeing’s latest safety issues will slow its production even more.

To be sure, Airbus has its own supplier issues, which constrain its ability to capitalize on this opportunity, the most serious being those affecting engines produced by RTX’s Pratt & Whitney unit for the A320 Neo. This will require hundreds of jets to be grounded for inspections and may slow Airbus’ ambition to up production. So, as my colleague Brooke Sutherland has noted, airline customers who want a new jet before the end of the decade may have no choice but to order from Boeing.

A hobbled rival isn’t necessarily a good thing from Airbus’ perspective, as it may prompt Boeing to develop new aircraft. But I think Airbus has little to fear on that front. Boeing has held back from building a mid-market aircraft to take on the long-range version of the A321 because executives worried it wouldn’t deliver the substantial fuel efficiency improvements that justify such massive investment.

Besides, Boeing’s balance sheet is in such a bad state—the US company has almost $17 billion in negative net assets and $39 billion of net indebtedness—it probably can’t afford it. Airbus’ stock has recouped all the losses caused by the pandemic even as productivity remains suboptimal due to the thousands of extra workers the company has hired to enhance manufacturing resilience. The shares touched a record high on Tuesday. With net cash likely to have exceeded €10 billion ($10.9 billion) at the end of December, it’s also on the cusp of being able to return more money to shareholders.

Prioritizing investors instead of making investments in quality and resilience is what got Boeing into trouble—the US manufacturer spent around $44 billion on share repurchases between 2013 and 2019, according to data compiled by Bloomberg. Airbus has always been far more conservative and may find other uses for its cash, including acquisitions.

Nevertheless, it would be no small irony were Airbus to partly echo Boeing’s cash-returning strategy. At that point, there will be no doubt that the tortoise has decisively beaten the hare. ©bloomberg

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MINT SPECIALS

What impact shall the carbon tax to be imposed by EU in 2026 have on aircraft market?

It is conducive to the sales of new aircraft with better fuel efficiency.

What impact shall the carbon tax to be imposed by EU in 2026 have on airlines?

They will accelerate the demand for aircraft replacement.

What is Airbus doing to achieve sustainable aviation?

It is making efforts to improve aircraft efficiency.

It is working on adopting innovative strategies.

Airbus is expected to account for 60% of narrow-body plane deliveries until 2026, and has a significant lead over Boeing in terms of net cash and net assets.

Boeing, on the other hand, faces significant challenges, including a net loss of $2.2 billion in 2023 and a high level of indebtedness.

Title:

Content: Free Trial

Major Acquisition: Aerospace Powerhouse Buys Its Key Supplier

Key Points

  • Boeing announced that it will acquire one of its key suppliers, Spirit AeroSystems.
  • The move should help Boeing fix quality control and safety issues.
  • Having more control of its supply chain will help Boeing regain profitability in the long run.
  • 5 stocks we like better than Airbus

Boeing Today

BA
Boeing
$184.61
+1.37 (+0.75%)
(As of 11:56 AM ET)
52-Week Range
$159.70
$267.54
Price Target
$220.89

Last week, Boeing NYSE: BA announced it is acquiring one of its key suppliers, Spirit AeroSystems NYSE: SPR, for $37.25 per share. The transaction represents an equity value of $4.7 billion and an enterprise value of $8.3 billion, as Boeing will assume $3.1 billion of Spirit's debt. At the time of the announcement, the sale price represented a 30% premium to Spirit’s stock price. Let’s break down the two businesses and the history of their relationship. Then, we can understand the reasons behind the decision and whether it makes sense.

Boeing's Segments and Key Partnership with Spirit AeroSystems

Boeing is one of the world’s major aerospace companies. It has three reportable segments: Commercial Airlines, Defense, Space & Security, and Global Services. Commercial Airlines develops and produces commercial jet aircraft and made up 44% of its revenues in 2023. The Defense, Space & Security segment produces military aircraft and weapons systems. It made up 32% of revenues in 2023. The Global Services segment provides many services for commercial and defense customers. It made up 25% of revenues.

Spirit AeroSystems is one of the world's largest producers of aerostructures for original equipment manufacturers (OEMs) such as Boeing and Airbus EPA: AIR. Aerostructures are the primary components of an aircraft's airframe, which is the fundamental mechanical structure of an airplane, excluding items such as passenger seats or cockpit control systems. Spirit’s core products include fuselages, wings, pylons, and nacelles.

Boeing and Spirit have a longstanding relationship. Boeing owned and controlled a significant portion of the firm's operations up until 2005. Spirit was then spun off into a standalone firm. As part of the spin-off, the firms entered into a lifetime agreement. Spirit would be the only supplier of aerostructures for Boeing’s commercial planes. This agreement applied to the B737, B747, B767, B777, and partially to the B787. Boeing's business made up 64% of Spirit’s net revenues in 2023, while Airbus accounted for 19%.

Boeing's Acquisition of Spirit to Address Quality Control and Safety Issues

Boeing decided to acquire Spirit to rectify quality control issues and signal to regulators that it is doing everything possible to make its planes safer. Safety concerns have been growing over the last several years. These issues started back in 2018 and 2019 when two 737 Max crashes left 346 people dead. Earlier this year, a portion of a 737 Max 9's cabin flew off the plane in midair, leaving passengers exposed. A terrifying video of the event surfaced online, adding to Boeing's public relations nightmare. This defect involved a mistake by Spirit’s employees failing to properly reinstall a panel they had repaired. More criticism came after questions about Spirit’s fuselage manufacturing caused delays in the production of 737 Max aircraft.

These safety concerns have damaged Boeing's market share in commercial airlines. In 2017, Boeing held a slight lead in net orders over Airbus. In 2023, Airbus accounted for 65% of net orders and 59% of deliveries.

A Long-Term Move to Regain Market Share and Restore Profitability

Ultimately, this acquisition makes sense. Shares are down 23% over the last three years, and something needs to change. Looking at the firm’s bottom line, it has been hemorrhaging money over the last five years. It cut its net loss by over half from 2022 to 2023, to $2.2 billion. However, this is far from the net income of $10.5 billion the firm earned in 2018. To regain profitability, the firm must dramatically increase its net orders and deliveries. Manufacturing airplanes is extremely expensive and has high fixed costs. To make up for this, Boeing needs to achieve economies of scale.

The Boeing Company (BA) Price Chart for Wednesday, July, 10, 2024

Spirit manufactures critically important parts of Boeing's planes. It is paramount to have full control over essential parts of its supply chain to efficiently produce planes at the level required to become profitable again.

Boeing would have liked to fix quality issues without paying billions for Spirit. But, it likely realized that wasn't possible. Spirit's CEO stepping down in 2023 demonstrates the internal turmoil at the firm.

Boeing’s share price has changed little since the announcement, which shows that investors are indifferent. However, this long-term move will be positive if Boeing shows it is fixing quality control issues. This will lead to more orders and deliveries over time, eventually helping Boeing’s stock price rise again. The average price target for Boeing implies an upside of 21% from the current level.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Boeing (BA)
2.8048 of 5 stars
$184.61+0.7%N/A-52.00Moderate Buy$220.89
Spirit AeroSystems (SPR)
1.3141 of 5 stars
$34.72+0.6%N/A-4.00Hold$33.42
Airbus (AIR)
0 of 5 stars
€131.84-2.8%N/AN/AN/A
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However, Boeing is also making strategic moves, including the acquisition of Spirit AeroSystems for $4.7 billion, which is expected to support its growth and competitiveness.

Overall, the aerospace market is expected to continue growing, driven by increasing demand for air travel and a shift towards greater efficiency and sustainability, with Airbus and Boeing competing for market share.

Title:

Content: 2021: Airlines Survived the Pandemic and Look Ahead

Business | December 21, 2021, Tuesday // 10:31
BNR

Airlines have survived the nightmarish 2020 for them, adapted to the pandemic conditions of 2021 and are now confidently looking ahead. Despite the emergence and spread of the still poorly researched version of Omicron, which has caused fear among some governments and led to new restrictive measures, investors are betting that the recovery of the global aviation market will continue.

A sure sign of this came last month from the air show in Dubai, according to Reuters. At the exhibition, Air Lease Corp. CEO Stephen Udvar-Hazi and several other companies led by Indigo Partners founder Bill Frankie ordered a total of more than 300 aircraft.

Compared to previous years, the deals are not impressive, but given the collapse of the industry in the last 18 months, they outline a new trend - the global airline business is returning. However, one element remains the same: the duel between Airbus and Boeing is doomed to continue.

It was shown by a series of orders last week. Singapore Airlines announced on Wednesday that it intends to replace its aging fleet of Boeing cargo planes with Airbus' new A350s, which feature a lightweight design. With this deal, the European company is on its way to seriously enter the air cargo sector, which until recently was dominated entirely by Boeing.

At the same time, the Australian Qantas announced that it will continue to rely on Airbus aircraft for its domestic flights, and the Air France-KLM consortium is facing a major deal with the European aircraft manufacturer.

Qantas has ordered 20 A321XLRs and 20 A220-300s with the option of 94 more in the future. The deal rose Airbus shares by 3 percent in a matter of hours. "KLM" is on its way to guarantee several dozen A321 aircraft.

The pandemic and climate have changed the business plans of aircraft manufacturers and airlines, and the trend is now increased demand for smaller and greener models at the expense of heavy machinery designed to carry many passengers.

Last week also marked the end of an era after Airbus delivered the last ordered A380 to the Emirates, closing a page in the history of civil flight. Although impressive in terms of capabilities and characteristics, the A380 super jumbo failed to realize its commercial potential and out of the planned over 1,000, only 272 aircraft were produced and delivered. It will continue to fly for a long time, but it will not leave the assembly line again.

"Airlines are increasingly thinking about their long-term plans, and especially about the environmental and social consequences and good governance," Reuters quoted Rob Morris, head of Ascend. "Everyone is saying to themselves, 'If I don't think about rebuilding the flotilla now, I'll be behind,'" he added.

Both Airbus and Boeing sold out everything by the middle of the decade, with a focus on mid-range aircraft, but the boom in pre-pandemic deals is unlikely to return any time soon. However, as years pass from the order to the actual delivery of the aircraft, the airlines can now make plans for the second half of the decade. "This is a market for buyers and a great time for them to take advantage of the situation," said aviation consultant Brendan Sobie.

Despite the uncertainty caused by the still untamed pandemic, the orders of Airbus and Boeing for the first 11 months of 2021 reached a total of 1439 aircraft, which is three times more than in 2020. The growth is largely due to the fact that Boeing's 737 MAX was again allowed to fly after a long ban caused by two fatal crashes.

Whether investors betting on new aircraft will be right depends on many factors. Among them are travel opportunities in 2022, the impact of Omicron, strict border controls, especially by China, and others, analysts say. According to Eamonn Brennan, CEO of Eurocontrol, any delay in opening the Chinese market beyond the last quarter of next year will hit the recovery of the aviation sector hard.

It also depends on the implementation of the required environmental objectives. New aircraft models reduce emissions by about 15 percent compared to previous ones, and the sector as a whole plans to reach net zero emissions by 2050. In the short term, however, the industry is forced to rely on energy producers to supply cleaner fuel.

/BTA

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What is Airbus doing to achieve sustainable aviation?

It is making efforts to improve aircraft efficiency.

The key trends driving this growth include the shift towards sustainable aviation, the development of new, fuel-efficient aircraft, and the growth of the aircraft leasing market.

What impact shall the carbon tax to be imposed by EU in 2026 have on aircraft market?

It is conducive to the sales of new aircraft with better fuel efficiency.

Regional market dynamics are also important, with Asia-Pacific being a key region for growth, and Europe being a significant market for aircraft leasing.

The strategic moves of major manufacturers, including Airbus and Boeing, will be critical in determining their success in the coming decades.