Introduction
The aviation industry is vital to international economic growth because of the ease with which people and goods can be transported worldwide. Therefore, to make well-informed aircraft selection choices, it is essential to have a firm grasp of the global fleet need for passenger and cargo aircraft and the factors driving this demand. Economic growth, rising incomes, urbanization, internationalization, and technological advancement contribute to the industry’s upward momentum.
A comprehensive familiarity with the airline business, identifying market leaders, and assessing aspects that stimulate aviation growth in certain markets are all necessary to formulate effective airline plans. As such, to ascertain knowledgeable choices, fleet planners need to consider not just overarching purchase considerations but also selection criteria unique to each kind of aircraft. Moreover, when recommending a fleet type for a specific market, airlines must consider several factors, including demand, route features, and operational costs. Airline companies with a good grip on these matters are better prepared to meet the challenges of a changing industry and contribute to the growth of local economies.
Evaluation of Global Fleet Demand
Market predictions for the next 20 years from Boeing and Airbus show rising demand for passenger and freight aircraft worldwide. Including regional jets and freighters, Boeing predicts a worldwide need for 47,080 commercial aircraft by 2041 (Mounir, 2022), whereas Airbus predicts a market for just 39,490 commercial airliners (Shparberg and Lange, 2022). Boeing estimates that 75 percent of the demand for passenger aircraft will come from aircraft with a single aisle (Airplanes, 2019).
In contrast, Airbus estimates that 90 percent of the market will come from aircraft with a single gallery. According to Mounir (2022), Boeing predicts a need for 9,270 wide-body aircraft, while Airbus forecasts demand for 7,590 due to the rise in long-distance travel (Shparberg and Lange, 2022). Over the next 20 years, Boeing anticipates 980 additional freighters, while Airbus anticipates a need for 2,820 in the cargo market (Grimme et al., 2021). It is projected that the e-commerce sector, the expansion of quick delivery services, and the demand for replacement aircraft will fuel the need for cargo fleets.
Several variables influence the optimistic outlook for passenger and freight aircraft fleet demand. First, the expanding middle classes in developed and developing nations will likely boost airline ticket sales. Technology improvements in the aviation industry have also allowed airlines to use newer, more fuel-efficient planes, lowering the price of air travel for the general public. The growth of low-cost and ultra-low-cost airlines worldwide is another important factor pushing fleet demand.
These airlines often follow a point-to-point business model and target secondary and tertiary regions that were previously untapped. Single-aisle jets make up the majority of expected demand and are smaller and more fuel-efficient, allowing the airline to keep tickets low. As more individuals grow price-conscious, they will look for inexpensive travel methods.
As e-commerce and expedited shipping have flourished, so too have larger cargo aircraft. Air freight is crucial in satisfying the rising demand for quick and dependable online shopping delivery times. As the global supply chain grows more integrated and industries seek more efficient ways to transfer products globally, air cargo demand will likely rise.
Main Travel Demands
For several reasons, air travel has become more popular throughout the years. Increased urbanization due to population growth is a key factor fueling this need given that this air travel has exploded in popularity as a quick and easy way to go about it. Increasing demand for air travel may also be attributed to increased middle-class incomes. People are more inclined to spend money on local and overseas vacations if they have higher discretionary income.
Due to globalization, air travel has also become more readily available and inexpensive, facilitating more frequent foreign travel for business and pleasure (Prakasha et al., 2022). As the globe shrinks, more individuals seek ways to experience the world. Moreover, the expansion of air travel may also be attributed to technological developments that have made it less difficult to schedule flights and visit other regions globally.
Increasing air travel demand may be attributed to several causes, including but not limited to population increase, urbanization, growing middle-class incomes, and globalization. The rising appeal of vacationing abroad is one of these causes (Zhang et al., 2021). More individuals than ever before are venturing out to see the world and writing about it for the rest of us to enjoy. As a result, there has been a greater need for low-cost airline tickets as individuals attempt to tour the globe without breaking the budget.
Finally, technological progress has played a role in the rising popularity of air travel. More fuel-efficient planes, for instance, have made flying more accessible and less taxing on the environment. Similarly, the development of Internet booking platforms and smartphone apps has facilitated airline research and booking for passengers, resulting in a more streamlined trip planning process.
Flight Market Leaders
Boeing and Airbus anticipate that demand for single-aisle aircraft—typically used for shorter flights—will drive the bulk of market expansion. This is because regional and domestic travel, especially in developing nations, is anticipated to fuel demand for air travel (Basora et al., 2021). Wide-body aircraft, often used for long-haul flights, are also likely to see a considerable rise in demand owing to the rising popularity of such journeys.
Regarding aircraft demand, the market expansion is forecast to be led by adding short-haul flights, although growth in long-haul travel is also substantial. This is evident in the soaring interest in wide-body planes, ideal for transoceanic journeys. Long-distance flights are in high demand because of the growing importance of international trade and the expanding middle classes in developing economies (Dožić and Kalić, 2015). The expansion of the low-cost carrier industry, especially in the Asia-Pacific area, is also a key factor in the rising demand for short-haul flights. Short-haul aircraft are anticipated to dominate market expansion, but long-haul aircraft are also in high need due to globalization and the development of low-cost airlines.
Arab Market Growth
The Arab aviation business has expanded significantly between 2008 and 2018. For example, in 2018, the economy of the Arab world strengthen helped by the rise in oil prices. Due to their reliance on oil exports, which account for an average of 79.3% of all products and commodities exported from the Arab world (Aaco, 2018).
According to the data presented in the research, the number of airlines serving the Arab world has climbed by 29.6 percentage points yearly (Fotouhi et al., 2021). The number of passengers has increased by 7.6 percentage points annually. Economic growth, political stability, relaxation of aviation rules, and introduction of low-cost airlines contribute to this expansion.
Economic Development
The growth of the Arab world’s economy is inextricably linked to expanding air travel. The rising disposable income of the region’s middle class and urbanization and globalization have resulted in a meteoric rise in air travel. Increases in both personal and commercial disposable income have made air travel more accessible to a broader demographic. As a result, more international visitors are flocking to the area, fueling the growth of the aviation sector.
The governments of Arab nations have made substantial investments in aviation infrastructure because they understand its significance. One such facility is Hamad International Airport in Qatar. The airport, constructed using public funding and opened to the public in 2014, has cutting-edge conveniences and can handle as many as fifty million passengers annually. It has received several accolades, including Skytrax’s “Best Airport in the World” title for 2021 (Davitt, 2021).Similarly, Dubai International Airport in the United Arab Emirates has expanded to become a central international airport hub.
The Dubai-based Emirates airline has been instrumental in the growth of regional air travel. The new King Abdulaziz International Airport in Jeddah is only one example of the substantial investments in aviation infrastructure by other Arab nations like Saudi Arabia. The region’s economy has benefited from all of these changes (Yu, 2020). Airports have facilitated cross-border commerce and investment by enabling firms to operate smoothly. Foreign visitors are spending more money and creating more jobs, especially in the tourist and hospitality industries.
Geopolitical Stability
The expansion of the Arab aviation market is directly correlated with the relative political calm in the region. Political instability, armed wars, and terrorism throughout the region’s history have scared away potential investors and visitors. However, the current situation have been looking better in recent years, with several nations in the area actively pursuing peace and stability. (Baykasoğlu et al., 2019). Given its strong security system and extensive measures to combat terrorism, the country is a popular tourist destination.
The aviation sector in the region has struggled due to the many wars and tensions that have plagued the area. Some Arab nations, however, have made significant gains in recent years toward fostering peace and tourism in the area. The development of air routes and implementing of a new tourist visa program in Saudi Arabia in 2019 are two examples that have boosted airline trust in the area’s safety (Yu, 2020).
Because of this, airlines like Emirates have started flying to places that were formerly too dangerous to visit. People now have a more favorable impression of the region’s safety, tourism, foreign investment, and economic development, which have all grown, making it more appealing to companies and investors. Therefore, the expansion of the Arab region’s economy has been greatly aided by promoting regional stability and tourism.
Market Liberalization
The expansion of the aviation industry may largely be traced to the liberalization of aviation rules in the Arab area. There is now greater competition and more alternatives for customers since several countries in the region have opened up their aviation sectors to international airlines. The United Arab Emirates is an example of this success story, having lured several international airlines into shopping there.
Due to the government’s open skies policy, various airlines have set up shops nationwide. These include Emirates, Etihad Airways, and Air Arabia. As a result, airfares have dropped, and competition has increased, making air travel more inexpensive. Similarly, Qatar has lowered prices for travelers by welcoming international airlines to its market while also increasing the number of international destinations it serves (Baykasoğlu et al., 2019). Foreign airlines and investors have been drawn to the area because of the liberalization of aviation rules, leading to greater investment in the aviation industry.
Emergency Low Cost
The development of LCCs, or low-cost airlines, has greatly contributed to the expansion of the Arab aviation industry. Low-cost carriers (LCCs) have shaken the airline business by catering to a new demographic of thrifty fliers. One such company is Air Arabia, which, in 2003, became the first low-cost carrier (LCC) in the Middle East and North Africa (Nascimento & Viana 2020). Since then, the company has expanded to become one of the world’s biggest LCCs, with a fleet of more than 50 aircraft flying to more than 170 locations. Flydubai, Jazeera Airways, and Flynas are just a few other low-cost carriers that have recently joined the Arab aviation sector.
Relaxation of Aviation Rules
The aviation industry and airlines’ aircraft choices may be drastically influenced by changes to the laws governing them. When restrictions on flying are loosened, airlines may be allowed more freedom over aircraft the use, the territories they may travel, and the methods by which they conduct their operations (Kinene et al., 2022). With more options at their disposal, airlines may alter both their fleet make-up and their route structures.
When choosing aircraft, airlines may prioritize fuel efficiency and cost-effectiveness if regulations governing the industry are loosened, allowing additional low-cost carriers to enter. This may cause more fuel-efficient, smaller aircraft like the Airbus A320neo and Boeing 737 MAX to be put into service. In addition, budget airlines could choose to use less-developed airports, which would necessitate the use of smaller aircraft that need fewer services and shorter runways.
Airline companies may prioritize passenger convenience and flight distance when making fleet decisions if aviation regulations are loosened to permit more long-haul flights. Larger, plusher aircraft like the Airbus A380 or Boeing 777 may become more popular. In addition, some airlines may expand their service to less accessible locations, necessitating aircraft with increased range and refined positioning systems.
The elimination of limits on airline ownership is another example of a law that has been softened in Arab nations. Previously, in Arab countries, foreign investors could not hold more than 49 percent of an airline established in the country, with the remaining 51 percent needing to be controlled by citizens of the country (Kinene et al., 2022). In order to attract international investment and fuel the expansion of the aviation industry, however, a number of Arab governments have eased these limitations in recent years.
Air Arabia is one airline that has grown as a result of the easing of ownership restrictions in the Arab world. Sharjah-based low-cost airline Air Arabia is 40% owned by a consortium of Moroccan businessmen and was one of the first airlines in the area to have foreign ownership. Since then, Air Arabia has grown into one of the leading low-cost airlines in the Middle East, with operations in a number of other Arab nations.
Factors to Consider in Choosing a Flight
Several variables affect an airline’s ability to turn a profit and stay competitive, all of which must be considered when recommending a fleet type for a given market. The following are among the most critical considerations:
Market Demand
The fleet type most suitable for a given market must be determined after carefully considering market demand. Larger aircraft with more passenger capacity and range may be necessary for a high-demand route between two major cities (Vasigh et al., 2022). In contrast, smaller aircraft may be more appropriate for a lower-demand course. AirAsia is an airline that utilizes customer demand to choose which planes to buy.
Data analysis and market research help the budget airline choose the best aircraft for each route, earning them a reputation as a data-driven fleet planner. In 2015, when the airline added service between Kuala Lumpur and Tokyo, it employed data analysis to forecast passenger demand. It settled on the Airbus A330-300 because of its long range of over 5,000 nautical miles and high capacity of up to 377 people (Birolini et al., 2021).
Similarly, based on customer demand, Emirates chooses its fleet, especially for its long-haul routes. Over 100 Airbus A380s, the world’s biggest passenger aircraft with a capacity of 853, are in the airline’s fleet (Woo et al., 2021). Wherever there is a strong demand for air travel, such as from London to Dubai, Emirates will deploy these planes.
Route Characteristics
When deciding which aircraft to use in a given market, airlines must consider various factors, including the peculiarities of the routes their passengers would take. Aircraft performance qualities, such as range and fuel economy, may be affected by a route’s distance, topography, and weather conditions. When flying long distances, airlines, for instance, must choose planes capable of flying for lengthy periods and economical with fuel.
Qantas is one such company that provides service between Australia, the United States, and Europe through some of the longest flights in the world. The Boeing 787-9 Dreamliner is the aircraft type used by the airline; it has a maximum range of 7,635 nautical miles and is optimized for long-distance flights while minimizing fuel consumption (Baidzawi et al., 2019). Similarly, airlines flying over hilly areas must account for the topography and climate of their routes.
Lhasa, the capital of Tibet, is 3,490 meters above sea level, and Air China flies there (Baidzawi et al., 2019). The Airbus A319 is used by the airline because of its high-performance capabilities, which allow it to fly safely and effectively even at high altitudes. In contrast, airlines flying shorter distances may use smaller, more fuel-efficient planes. For its short-haul flights inside Europe, easyJet, for instance, relies on a fleet of Airbus A320s and A319s. Since they use less fuel and have reduced operational expenses, these planes are more economical for shorter flights.
Airport Infrastructure
Airlines must consider the airport facilities in that region when deciding which aircraft to deploy. The size and kind of aircraft that can take off from an airport depend on the airport’s infrastructure and amenities. Runway size and capacity are crucial parts of any transportation system. It is the airline’s responsibility to verify that the runways at the airport are suitable for the takeoff and landing of the planes they want to fly. For instance, the Boeing 747-8, one of the world’s biggest passenger airplanes, has more runway length requirements than smaller aircraft (Zaccaria et al., 2020). Therefore, airlines using these planes must ensure their airports have enough runway space and length.
The accessibility of gates is another component of the infrastructure. Airline companies should check whether there are enough gates at their designated airports. For instance, Emirates has a large fleet of Airbus A380s, which can only be accessed via specially designed double-level gates. Therefore, the airline must ensure that there are enough gates at the airports it uses to handle its A380 fleet.
Airport infrastructure should also include efficient ground-handling services for airlines. Airlines must verify that the airports they want to operate out of have enough ground handling services, such as baggage handling, fueling, and catering, to accommodate their operations. Singapore Airlines, for instance, uses airports all around the globe to launch its Airbus A350 service. The airline must ensure the airports have enough ground handling services to support the planes.
Cost Consideration
When deciding which fleet type to deploy in a given market, the cost is a major concern for airlines. When deciding whether to buy or lease an airplane, airlines must factor in the ongoing expenses of keeping it in the air. One of the most important factors in terms of savings is fuel economy. Fuel is usually an airline’s biggest operational expenditure; thus, fuel-efficient planes are a priority. Airlines choose planes like the Airbus A320neo and the Boeing 737 MAX 8 because of their lower operating costs and greater profitability during the planes’ lifetimes because of their increased fuel economy.
Aircraft need regular maintenance and sometimes extensive overhauls, which adds to the cost of ownership. When planning their budgets, airlines should consider the price of care and the price and availability of replacement components. For instance, the composite fuselage of the Boeing 787 Dreamliner reduces maintenance expenses during the plane’s lifetime compared to those of conventional aluminum planes (Yu, 2020).
The expense of either leasing or buying must be considered. Leasing vs. owning an aircraft has to be weighed against the available finance choices for airlines. Since leasing enables low-cost airlines like Ryanair and easyJet to keep their fleets young at a fraction of the cost of buying new ones, this is a popular financing option.
Competition
Airline proposals for fleet types in each market must consider competitive factors. To maintain market share, airlines must analyze the industry’s competition and the tactics used by rivals. Airline companies pay attention to the variety and density of competition in every given market. Airlines like American, Delta, and United compete with each other and low-cost competitors like Southwest and Spirit in the US market (Pérez et al., 2019). Conversely, Ryanair has cornered the European low-cost carrier industry, prompting established airlines like Lufthansa and Air France-KLM to create low-cost arms.
Airlines also consider their rivals’ relative strengths and shortcomings as competitive factors. Airlines often consider their rivals’ route networks, brand recognition, and customer loyalty when deciding which planes to buy. Airlines may select bigger aircraft with better capacity and range to compete with established carriers with an extensive route network. In comparison, low-cost carriers may opt for smaller aircraft to offer more frequent and inexpensive flights to smaller airports.
Conclusion
Over the next two decades, the aviation sector is predicted to expand significantly, especially in the Asia-Pacific area. Increases in disposable income, population expansion, urbanization, internationalization, and technological progress all contribute to the demand for air travel. Aircraft selection is crucial for fleet managers, who must weigh broad purchasing variables and more narrow aircraft-specific criteria. Furthermore, when selecting an appropriate fleet type for a particular market, airlines should evaluate multiple factors such as demand, route features, and operating expenses. When airlines have a firm grasp on these issues, they can better respond to the demands of a dynamic business and boost regional economies.
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