LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global wide-body aircraft engine market to grow at a CAGR of more than 3% during the forecast period, according to their latest report.
The market study covers the present scenario and growth prospects of the global wide-body aircraft engine market for 2017-2021. The report also lists small and medium wide-body and large wide-body aircraft as the two major application segments, of which the small and medium wide-body segment accounted for close to 80% of the market share in 2016.
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Technavio analysts highlight the following three market drivers that are contributing to the growth of the global wide-body aircraft engine market:
- Increase in passenger traffic
- Advancement in existing gas turbine technologies
- Enhancement in aircraft and engine leasing opportunities
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Increase in passenger traffic
Increase in the global air passenger traffic has always been the most notable propelling factor for the year-on-year growth of aircraft and associated parts and components markets. As wide-body aircraft can fly more number of passengers on longer routes, it is also anticipated that the growth in passenger traffic will substantially contribute to the increased demand for wide-body aircraft and associated engines.
Traditional aviation (full-service or FSC) has a longstanding history of inducting wide-body aircraft into operation, considering the demand for improved flight-experience and the need for making long-haul flights. However, over the years, the demand for wide-body aircraft has reduced to a large extent due to the adoption of business models focused toward leveraging cost optimization. Yet, it is expected that regions like Europe and the Middle East will contribute significantly to the growth of the global wide-body aircraft engine market during the forecast period.
Advancement in existing gas turbine technologies
The main aim of aircraft operators/airlines is to employ operational engines that can reflect increased fuel efficiency and lower the overall cost incurred during operation or maintenance. Therefore, operators are emphasizing on selecting advanced materials that will extend the durability and service life of the engine and ensure efficient performance.
“Aircraft OEMs, along with engine manufacturers, have been extensively employing improved engines in their new aircraft designs to achieve enhanced performance and range of aircraft. This also helps in ensuring the viability of the aircraft in the highly competitive and rapidly evolving aerospace industry. Such developments will lead to the adoption of wide-body engines during the forecast period,” says Ramyabrata Chakraborty, a lead analyst at Technavio for aerospace components research.
Enhancement in aircraft and engine leasing opportunities
A new engine can account for around one-third of the total aircraft cost. Therefore, the lack of adequate funds for procuring new aircraft can hinder the adoption of new engines. As airlines mostly operate in the low-profit margins, it becomes challenging for them to pay significant amounts for the purchase of fleets or new engines. However, with the evolving dynamics of aircraft or engine leasing businesses, airlines can access the comfortable option of for leasing new aircraft or new engines in their fleets through aircraft financing entities. Such a model provides financial relief to airlines as well as allows them to avail temporary access to an increased capacity.
“With the growing demand for next-generation aircraft and engines, prominent engine lessors like GE Capital Aviation Services and AerCap are focusing on enhancing their purchase and leaseback options for engines that are manufactured by prominent players like GE Aviation and Rolls Royce. Such emerging trends of leasing activities are anticipated to channelize more funds for the procurement of wide-body aircraft and associated engines during the forecast period,” says Ramyabrata.
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