Aviation Asset Management Market

Market Overview

The global aviation asset management market size was valued at USD 172 billion in 2022 and is projected to reach USD 306 billion by 2031, registering a CAGR of 5.1% during the forecast period (2023-2031).

Aviation asset management refers to managing, maintaining, and optimizing assets owned or controlled by aviation enterprises such as airlines, aircraft lessors, and maintenance organizations. It entails various techniques and procedures to guarantee that aviation assets such as Aircraft, engines, and components are effectively utilized, well-maintained, and fulfill regulatory compliance.

The rise of low-cost carriers and increased air traffic drive the market share. Several firms have been competing with one another to capitalize on the market potential and gain a significant piece of the market share. Airlines are extending their operating fleet to meet consumer demand for regional roots. Regional governments' efforts to develop their manufacturing and operational capacities in the aviation industry are drawing massive brownfield and greenfield investments, positively affecting the market.

Highlights

• Aircraft hold a significant share of the market by type.
• Operating lease owns the highest share in the market based on purchase type.
• Leasing is a major shareholder in the market based on services.
• Airline operators lead the market based on end-use.
• Asia-Pacific is the dominating region.

Market Dynamics

Global Market Drivers

Increasing Air Passenger Traffic

Continuous development in air travel has increased demand for Aircraft, requiring good asset management to maintain efficient operations and passenger services. As the demand for air travel increased, an airline sought to expand its fleet by purchasing additional Aircraft to match the increased passenger flow. However, because of a lack of appropriate aviation asset management, the airline encountered difficulties integrating the new Aircraft into its current fleet, resulting in operational inefficiencies and higher maintenance expenses. The International Air Transport Association (IATA) reports that passenger traffic has steadily grown worldwide. Global passenger traffic is expected to reach 6.7 trillion R.P.K. in 2022. According to the IATA projection for 2023, passenger traffic will continue to improve, with R.P.K. statistics approaching pre-pandemic levels by the end of the year. Furthermore, Airbus forecasted a requirement for roughly 39,000 new aircraft over the next 20 years in its Global Market Forecast 2020-2039. This high demand for new Aircraft reflects rising air passenger volume and the resulting need for effective aviation asset management to manage the expanding fleet.

Global Market Restraints

High Initial Cost

A regional airline is considering using sophisticated aviation asset management software to improve fleet performance and save maintenance expenses. On the other hand, the initial cost necessary to acquire the software, train staff, and integrate the system with current operations is significant. The airline's management is concerned about the financial impact of the first cost on the company's budget. Furthermore, the International Air Transport Association (IATA) stated that the COVID-19 pandemic led to a considerable decrease in airline revenues, resulting in financial difficulties for several carriers. The pandemic's capital limits have underscored the importance of cautious financial preparation before investing in asset management solutions.

Global Market Opportunities

Technological Advancement

Technological advancements in different linked technologies enable businesses to integrate their systems with the cloud, the Internet of Things (IoT), predictive analysis, and other data management tools, enhancing industry rivalry. For example, I.F.S. labs have begun a program to integrate blockchain technology into numerous aviation asset management operations. A contemporary airplane comprises around two to three million pieces, all of which must be carefully controlled for smooth operation. This created a desire for a verified, secure, and traceable database protocol, which blockchain technology may provide. Furthermore, the International Air Transport Association (IATA) published a study outlining possible blockchain uses in the aviation industry, including certification, smart contracts, tokenization, digital I.D., and provenance. There may be aviation asset management market growth.

Segmental Analysis

The global aviation asset management market is segmented based on type, purchase type, services, end-use, and region.

For better understanding type is further segmented into Aircraft (wide body, narrow body, and private jets), Helicopters.

Aircraft hold a significant share of the market.

Aircraft

This category encompasses all fixed-wing Aircraft, from commercial jets to private jets. Aircraft are often employed for passenger and freight transportation and are designed to create lift and power through forward motion.

Helicopters

Rotary-wing Aircraft capable of vertical take-off and landing (VTOL) are included in this category. Helicopters have many uses, including search and rescue, medical transport, aerial surveys, and military tasks.

Based on purchase type, the market is sub-segmented into Direct purchase, operating lease, finance lease, sale, and leaseback (S.L.B.).

Operating lease owns the highest share in the market.

Operating lease

An operating lease entails leasing an aviation asset from a lessor (the asset's owner) for a predetermined length of time. The lessee (airline or operator) makes regular lease payments and maintains operational control over the asset without acquiring ownership. The lessee can either return the asset to the lessor or extend the lease after the lease period.

Direct purchase

In this transaction, an airline or operator gets an aviation asset directly from the manufacturer or seller, such as an airplane or helicopter. The buyer becomes the asset's owner and is fully responsible for its operation, maintenance, and administration.

The service bifurcates the market into Leasing, technical services, regulatory services, and end-to-end.

Leasing is a major shareholder in the market.

Leasing

This category includes airplane leasing services such as arranging operational leases, financing leases, and sale and leaseback transactions. Asset management firms assist airlines and operators with lease agreement drafting, negotiating conditions, and managing the full leasing process.

Technical services

Technical services concern aviation assets' upkeep, repair, and technical support. Regular inspections, monitoring aircraft health, establishing maintenance plans, and assuring compliance with airworthiness rules are all part of the job. Technical services are crucial to enhancing the Aircraft's operating efficiency and safety.

By end-use, the segment can be further bifurcated into Airline operators, leasing companies, cargo operators, M.R.O. service providers, and commercial platforms.

Airline operators lead the market.

Airline operators

Airlines in this category possess and operate their fleet of airplanes or helicopters. Airline operators seek asset management services to improve their aviation assets' performance, maintenance, and general efficiency.

Leasing companies

Leasing companies specialize in leasing Aircraft and helicopters to airlines and other operators. These firms possess a fleet of airplanes and lease them to operators on short- or long-term leases. Leasing businesses use aviation asset management services to maximize their leased equipment's value while guaranteeing regulatory compliance.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global aviation asset management market is analyzed in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia Pacific is predicted to rise at a substantial CAGR of 5.4% throughout the forecast period, with an increased growth rate in the future as the region's aviation industry develops. Airlines are extending their operating fleet to meet consumer demand for regional roots. Regional governments' efforts to develop their manufacturing and operational capacities in the aviation industry are drawing massive brownfield and greenfield investments, positively affecting the market. China Airlines has a partnership with I.F.S. to provide aviation asset management services. This contract helped China Airlines improve its management process efficiency by 10%, checks delivery efficiency by 3%, and a 30-day average decrease in planned aircraft maintenance downtime.

North America holds a sizeable global market share and is expected to boost at a CAGR of 4.9% during the forecast period. The region has major aircraft lessors, leasing businesses, and M.R.O. service providers. The existence of established aviation hubs, such as those in the United States and Canada, contributes to market growth. American Airlines improves its asset management processes by combining data analytics and artificial intelligence. This has assisted the airline in cutting expenses, improving safety, and increasing operating efficiency. COVID-19 has considerably influenced the aviation sector, particularly the North American aviation asset management business. The epidemic has curtailed air travel, decreasing demand for asset management services. However, when air travel demand recovers, the industry is projected to recover in the future years.

In Europe, the huge increase in international passenger traffic and increased leisure expenditure caused by the economy's fast expansion may provide new growth prospects for the regional sector. The continuous expansion of the fleet, supported by increased demand for air travel, is expected to fuel industry growth patterns in Europe. According to the European Commission, the aviation sector in Europe is a substantial contributor to the region's economy, creating over 4.1 million employment and providing more than 450 billion Euros to G.D.P. There is a high demand for comprehensive asset management systems to ensure the optimal usage of aircraft assets because of the expanding aviation industry. Furthermore, the European Aviation Safety Agency (EASA) enforces severe safety and maintenance requirements to guarantee the region's aviation sector meets the highest standards of airworthiness and safety. Aviation asset management businesses play a key role in assisting airlines in adhering to these standards, guaranteeing adequate aircraft maintenance and management.

Large-scale airline expenditures to update their fleets in the Middle East and Africa may benefit the aviation asset management business. The Middle East is expected to control a sizable percentage of the worldwide market. The region's aviation asset management business is growing due to the region's improving economy, increased aircraft demand, and rising air traveler numbers. As more individuals go to the U.A.E. for business, the U.A.E.'s strategic position for business and investment is converting the Middle Eastern country into a significant air transportation hub.

The Latin American market is expected to expand considerably throughout the projection period. The region's rising trade prospects and flourishing e-commerce industry drive up demand for air freight services. The regional sector is expected to develop in the next years due to increased sales of cargo aircraft utilized to ensure on-time shipment deliveries.

Recent Developments

• June 2023- G.E. Aerospace signed a memorandum of understanding with Hindustan Aeronautics Limited to build fighter aircraft engines for the Indian Air Force.
• July 2023- AerData announced the first customer to go live with their new Records Management Solution.
• July 2023- The Civil Aviation Administration of China (CAAC) granted Airbus Helicopters certification for the H175 helicopter.