By Jason Zilberbrand, ASA
The pandemic caused airlines across the globe to experience record losses due to canceled flights and the inability to fill seats. Following the height of COVID-19, the aviation industry experienced dramatic challenges it has never seen before. According to the International Air Transport Association (IATA), airlines are estimated to lose “$84.3 billion in 2020 for a net profit margin of -20.1%.”
As we are optimistic and expect conditions to improve slowly over time, there are still 3 major aircraft markets in the world that are still on top.
Top Aircraft Markets Globally
Despite COVID-19, these 3 aircraft markets still come out on top.
With almost 1.5 billion people living in China, it may come as no surprise that it takes the first slot as a top aircraft market. But ranking higher than the United States is a huge change compared to past reports. Centre for Aviation (CAPA) findings reveal that the U.S. continues to suffer heavy losses due to canceled flights and a continuous stream of unbooked seats. China ranks higher within the airline industry as of mid-2020, with the number of seats at capacity reaching close to 9 million.
Why China Is The Largest Aviation Market In The World
The International Air Transport Association (IATA) first reported expectations for China to pass the United States as the leading aircraft market in 2024. However, with the unexpected development of COVID-19, they claimed the number one spot much sooner than anticipated.
What To Expect For The Future Of China’s Aircraft Market
With no plans of slowing down, China plans to build 200 airports over the next 15 years. They are also facing a demand from consumers between Boeing and Airbus. In addition to its increase in sales and expansion plans, China is attempting to break free from relying on foreign aircraft. Currently, China is testing its aircraft, the COMAC (Commercial Aircraft Corporation of China) C919.
“The C919 has a range of up to 5,555 kilometers and has garnered a running total of 815 orders from 28 customers, predominantly Chinese airlines,” says CNN Travel.
2. United States Of America
Coming in second, the United States sits right below China. The U.S. has seats at a capacity of just over 8.5 million, creeping up to but not exceeding China’s numbers. Unfortunately, the U.S. experienced a significant drop in a short amount of time in April of 2020. This cut their seating capacity by 30%, dropping below 8 million. However, spikes in COVID-19 cases throughout the nation continue to fluctuate. Because of this, commercial airlines are still struggling to book and maintain full flights.
What The U.S. Can Look Forward To From Air Travel
As seen in our blog Moving Forward In Aviation After A Tailspin Year, there is an emerging market for private aircraft. This is because many are searching for alternatives to commercial airlines. Consistent air travel is essential for the U.S. airline industry’s future and is expected to recover. Although not entirely to the former 2019 levels for another few years. Because of COVID-19, the aircraft industry is sure to change all future operations.
Far below both China and the U.S., Japan’s numbers show seats at a capacity of over 2 million. While interest in travel has increased internationally, Japan has hit a few bumps in the tarmac.
Japan May Face Some Future Challenges
Following the pandemic, Japan’s Skymark Airlines decided to withdraw its application to relist on the Tokyo Stock Exchange, “citing rapid changes in the business environment following the global spread of the new coronavirus and recent trends in the stock market.”
Japan has improved when it comes to stopping the spread of COVID-19 but has still seen the damage to air travel. According to CAPA, Japan recently entered its second state of emergency due to the pandemic. This has forced airlines to scale back in sales for January and February. There are also additional concerns about hosting the Olympic Games in July.
Japan hopes to stop the spread of COVID-19 and look forward to better days and more travel opportunities domestically and internationally.
The Future Is Ever-Changing, And VREF Is Along For The Ride
As commercial airlines continue to recover, there is an opportunity to grow private aircraft ownership. With each week leading to fluctuating amounts of those willing to fly, the top aircraft markets we see here could change over time. This is especially true for Japan, as we expect India to take the number 3 spot by 2024.
If you are interested in becoming an aircraft owner or expanding your fleet, VREF is at your service for all aircraft appraisals and valuation services. With the largest aircraft database on the market and a team of highly qualified Senior Accredited Appraisers, VREF is your primary contact to refer to when you’re on the road to buying or purchasing an aircraft.