Investments in Alternate Propulsion Technologies and Increased Demand for Sustainability are Driving the Future Growth Potential
The COVID-19 pandemic had a devastating effect on the global aviation industry. Passenger traffic plummeted to 66% in 2020 from 2019 levels. The recovery of the industry to 2019 levels is expected only towards the end of 2023 or early 2024. Original equipment manufacturers (OEMs) have faced significant challenges. The two market leaders, Airbus and Boeing, reported notable reductions in their operating revenues for the commercial aircraft segment (approximately 38% and 50%, respectively). New orders and deliveries were badly affected, contributing to the financial losses of 2020.
Currently, with travel restrictions lifting across the world and airlines slowly resuming operations in key routes, demands from OEMs are on the rise. With airline operations focusing on short/medium-haul routes as they emerge from the pandemic, narrow-body aircraft, perfect for these routes, are in demand. These routes are critical for the airline industry’s recovery from the impact of COVID-19. Business aviation has seen significant changes in recent years with advancements in technologies (for example, electric and hydrogen propulsions as alternatives to more traditional propulsion systems) enabling the industry to be more sustainable and environmentally friendly.
The major trends driving the global aircraft development industry include the increased scope of autonomous capabilities and the investments in new-generation aircraft. Major airlines such as Norwegian, Air Lingus, and Lufthansa have displayed interest in Airbus and Boeing’s new aircraft that feature advanced propulsion systems with hydrogen-powered fuels. Unmanned aerial mobility (UAM) is another significant trend in the industry as it can resolve some key challenges concerning infrastructure and carbon emissions. With electric vertical take-off and landing (eVTOL) technology in the testing stages currently, UAMs can be a realistic possibility in the future. North America and Europe are the major driving forces behind these changes in the industry, investing in advanced technologies and propulsion systems to usher in a new era of aircraft that have the potential to make fundamental changes to air travel.
