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Summary of the Global Fleet and MRO Market Forecast 2022-2032

Core Content

The Global Fleet and MRO Market Forecast 2022-2032 by Oliver Wyman provides a comprehensive outlook on the recovery and growth of the commercial airline transport fleet and the associated maintenance, repair, and overhaul (MRO) market over the next decade. The report highlights the ongoing challenges posed by the coronavirus pandemic, economic forces, traveler sentiment, and government policies, while also addressing the long-term impacts of climate change and technological advancements.

Main Points

Industry Recovery and Growth

• The aviation industry is expected to enter a decade of growth following two years of turmoil, but the recovery will be uneven and challenging.
• Domestic travel demand is projected to surpass pre-pandemic levels in early 2023, while business and international travel will take longer to recover due to ongoing restrictions and shifting business practices.
• Global fleet size is expected to grow from 25,578 aircraft in 2022 to 38,189 aircraft by 2032, with a CAGR of 2.7%.
• Narrowbody aircraft will dominate the recovery, making up 64% of the fleet by 2032, compared to 58% in 2020.

MRO Market Outlook

• The MRO market is also in transition, with demand expected to recover to pre-COVID levels by 2024.
• Annual growth in the second half of the forecast period is 2.8%, with MRO demand reaching $126.6 billion by 2032.
• Regional differences exist in MRO recovery: China and India have already exceeded pre-pandemic levels, while Western Europe is expected to recover only in 2025.

Impact of the Pandemic

• The pandemic significantly disrupted traffic, fleet dynamics, and MRO operations.
• Omicron in late 2021 caused workforce absenteeism, government travel restrictions, and supply chain disruptions.
• Pent-up demand in developed economies has driven a partial recovery in domestic travel, but business travel has been slower due to videoconferencing and remote work trends.

Cargo Growth

• Cargo demand has been a bright spot during the pandemic, with a 17% increase in shipments in 2021 compared to 2019.
• Dedicated cargo fleet grew by 3% in 2021, and P2F conversions hit record levels.
• Shipping rates reached record highs in late 2021 due to increased cargo volume and employee absenteeism.

Economic and Market Drivers

• Air travel demand has historically been linked to GDP growth, but the last decade saw faster growth than the global economy.
• China and India are expected to lead in economic rebound, passenger demand, and fleet expansion due to a growing middle class and low-cost airlines.
• North America is the most optimistic region for recovery, with profit forecasts expected to return in 2022.

Financial Outlook

• The aviation industry faced catastrophic losses in 2020, totaling $137.7 billion, and $51.8 billion in 2021.
• 2022 losses are projected at $11.6 billion, with short-term margins still expected to remain negative.
• Profitability is expected to improve in North America by 2022, while Europe will continue to report losses.

Climate Challenges

• Climate change poses a long-term challenge for the industry, with aviation responsible for 2.3% of global CO₂ emissions.
• Sustainable Aviation Fuel (SAF) is seen as the most viable near-term solution, capable of reducing emissions by 80%, but currently three times more expensive than conventional jet fuel.
• SAF usage is expected to reach 10% of the aviation fuel mix by 2030, but this may not be enough to offset emissions growth unless SAF usage reaches 15%.
• Government subsidies and long-term purchasing agreements are necessary to make SAF economically viable.

Technological Developments

• Fuel efficiency remains a key focus for aerospace manufacturers.
• New engine technologies, such as the Pratt & Whitney GTF Advantage engine, are expected to reduce fuel burn by 1% and be compatible with 100% SAF.
• Alternative propulsion systems (electric, hybrid, hydrogen) are being explored, but commercial viability is still several years away.

Additional Risks

• Labor shortages are a growing concern, with demographic shifts and early retirements due to pandemic uncertainty.
• The industry will need 612,000 pilots, 626,000 maintenance technicians, and 886,000 cabin crew members over the next 20 years.
• Trade wars and sudden travel restrictions may threaten global supply chains, leading to a potential shift toward onshoring of MRO capacity.

Key Information

• Global Fleet Growth (2022–2032): 2.7% CAGR, reaching 38,189 aircraft.
• MRO Market Growth (2022–2032): 2.8% CAGR, reaching $126.6 billion.
• SAF Usage Target: 10% by 2030, but 15% is needed to maintain 2019 emission levels.
• Global Airline Losses (2020): $137.7 billion.
• SAF Cost: Three times more expensive than conventional jet fuel.
• P2F Conversions: Reached record levels in 2021 due to increased cargo demand.
• China and India: Already exceeded pre-pandemic MRO demand levels by the end of 2021.
• Western Europe: Expected to recover MRO demand only in 2025.
• North American Airlines: Projected to report profits in 2022, with a forecast of $9.9 billion.
• EURO 2022 Losses: $9.2 billion, the highest of any region.

Additional Resources

• An interactive dashboard is available to explore the forecast in detail.
• The Airline Economic Analysis is scheduled for release in March.
• For questions or to participate in the 2022 MRO survey, contact MROsurvey@oliverwyman.com or AviationMarketIntelligence@oliverwyman.com.