Civil Aviation Market expected to continue leading over the forecast period

Posted on 2022-08-25 by researchinsights in Industrial // 0 Comments

Civil Aviation Industry Overview

The outbreak of the COVID-19 pandemic has had a significant impact on the overall aviation industry. The civil aviation industry particularly confronted considerable revenue losses, with revenues plummeting over the year from USD 837.53 billion in 2019 to USD 459.64 billion in 2020 as travel restrictions and social distancing norms drastically reduced the demand for air travel during the first two quarters of 2020.

Although the industry has been showing some signs of recovery since the third quarter, the recovery rate remains sluggish and it is anticipated that revenues would gradually attain their pre-pandemic levels only over the next five years. As such, the market is poised for a gradual recovery to generate revenues worth USD 1.09 trillion in 2028, registering a compound annual growth rate (CAGR) of 8.9% from 2021 to 2028.

Gather more insights about the market drivers, restrains and growth of the Global Civil Aviation Industry

Restrictions on air travel left the civil aviation industry crippled by financial crises. Prominent airline operators had to ground their fleet and temporarily halt their operations. Moreover, a significant part of the grounded fleet is estimated to never return to operations. Gaining travelers’ confidence in the aircraft safety measures being implemented is turning out to be a new challenge for airline operators. To address this challenge, airlines are adopting various preventive measures, such as sanitizing the cabins regularly and installing advanced High-Efficiency Particulate Air (HEPA) filters inside the cabins, to ensure the safety of their passengers. However, airlines would be facing additional overhead expenses owing to these measures.

Airlines have conventionally relied on the historical database of passengers to forecast the demand and make strategic decisions on ticket pricing. However, in the wake of the outbreak of the pandemic, airlines are upgrading their data models to predict demand for specific routes. At the same time, airline operators and airport authorities are also adopting solutions based on the latest and advanced technologies, such as the Internet of Things (IoT), to provide contactless service to their passengers. The key application areas where the airlines are expected to increase the adoption of advanced technologies in the near future include baggage handling, thermal screening, contactless security for check-in and check-out, and in-flight entertainment.

Business travel has been one of the critical sources of income for the aviation industry. Continued globalization and the widening geographical outreach of companies have been particularly driving the demand for business air travel. However, the frequency of business-related personal meetings has reduced significantly due to the pandemic outbreak and the subsequent restrictions on travel and movement of people. As such, several organizations have reduced the number of in-person meetings and particularly axed down mid-level and low-level employee meetings to ensure employee safety. As per a recent survey by the Global Business Travel Associations (GBTA), 98% of the employees of multinational companies canceled their international business trips in 2020. Similarly, 92% of the employees have cut down most of their domestic business travel.

Domestic air operations are expected to recover ahead of international travel in the near future. Various governments are gradually easing travel restrictions on domestic routes as part of the efforts to boost economic growth. Having confronted heavy losses throughout 2020 due to travel bans and restrictions, airlines across the globe remain keen on reducing their operating costs and are preferring to operate short-haul and medium-haul flights. In India, especially, the revival of overseas travel is projected to be more challenging and slower than domestic travel. This will, in turn, result in heavy losses for the country’s international carriers, such as Air India, which generates approximately 60% of its revenues via international operations.

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