Commercial Airlines Market to grow by USD 430.2 Billion from 2025-2029, driven by rising air passenger traffic, Report on how AI is driving market transformation - Technavio

NEW YORK, Jan. 31, 2025 /PRNewswire/ -- Report with the AI impact on market trends - The global commercial airlines market size is estimated to grow by USD 430.2 billion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  8.7%  during the forecast period. Increase in air passenger traffic is driving market growth, with a trend towards rising preference for smart airports. However, increasing operating expenses  poses a challenge. Key market players include Air China Ltd., Air France KLM SA, Air Transport Services Group Inc., American Airlines Group Inc., Ana Holdings Inc., China Eastern Airlines Co. Ltd., China Southern Airlines Corp. Ltd., Copa Holdings SA, Delta Air Lines Inc., Deutsche Lufthansa AG, easyJet plc, Green Africa Airways Ltd., Hahn Air Lines GmbH, InterGlobe Aviation Ltd., International Consolidated Airlines Group SA, Japan Airlines Co. Ltd., John Swire and Sons Ltd., Qantas Airways Ltd., Southwest Airlines Co., and United Airlines Inc..

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Commercial Airlines Market Scope
Report Coverage	Details
Base year	2024
Historic period	2019 - 2023
Forecast period	2025-2029
Growth momentum & CAGR	Accelerate at a CAGR of 8.7%
Market growth 2025-2029	USD 430.2 billion
Market structure	Fragmented
YoY growth 2022-2023 (%)	7.8
Regional analysis	APAC, Europe, North America, Middle East and Africa, and South America
Performing market contribution	APAC at 53%
Key countries	US, China, India, Germany, Japan, UK, France, Canada, Italy, and Brazil
Key companies profiled	Air China Ltd., Air France KLM SA, Air Transport Services Group Inc., American Airlines Group Inc., Ana Holdings Inc., China Eastern Airlines Co. Ltd., China Southern Airlines Corp. Ltd., Copa Holdings SA, Delta Air Lines Inc., Deutsche Lufthansa AG, easyJet plc, Green Africa Airways Ltd., Hahn Air Lines GmbH, InterGlobe Aviation Ltd., International Consolidated Airlines Group SA, Japan Airlines Co. Ltd., John Swire and Sons Ltd., Qantas Airways Ltd., Southwest Airlines Co., and United Airlines Inc.

Market Driver

The commercial aviation industry is experiencing significant trends in the use of modern, fuel-efficient narrowbody aircraft for passenger transportation. UNWTO reports a rise in cross-border travelers, driving air passenger traffic. Emerging countries are expanding their fleet management with aircraft orders, influenced by economic conditions and per capita income. The business and leisure sectors fuel demand for both wide-body and narrow-body aircraft. New aircraft technologies like SpaceJet from Mitsubishi Heavy Industries and Turbofan engines contribute to fleet expansion plans. Wizz Air, Frontier, Volaris, JetSMART, and others invest in fuel-efficient engines and advanced materials for their narrow-body fleets. The air transport industry focuses on connectivity, technology integration, and sustainable aviation. Geopolitical stability, environmental regulations, and urban air mobility are key challenges. Commercial helicopters, gliders, drones, and aircraft turbines are also part of the landscape. Legal frameworks and technology integration, including machine learning and artificial intelligence, play a role in aircraft safety and commercial drone use. 

IATA and ACI have proposed the concept of smart airports to enhance collaboration among airport operators, airlines, and passengers. These airports integrate all systems into a single digital grid, allowing real-time information sharing and deep cross-departmental collaborations. Developed on a converged IP platform, smart airport terminals facilitate high-speed broadband traffic and improve operational efficiency. By offering personalized services and enhancing the passenger experience, smart airports contribute significantly to the profitability of aviation stakeholders, especially during volatile economic conditions. 

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 Market Challenges

• The commercial aviation industry faces several challenges in the market, particularly in the area of passenger aircraft. Narrowbody aircraft, a sub-aircraft type, are popular due to their fuel-efficiency and modern design. However, airlines must consider their product offerings, fleet management, and operating costs when making aircraft orders. Economic conditions, domestic passenger traffic, and per capita income in emerging countries impact airline profitability. Infrastructure growth and fleet expansion plans are crucial for the business and leisure sectors of the air transport industry. New aircraft technologies, such as engine programs from Delta Airlines, SpaceJet by Mitsubishi Heavy Industries, and ROSTEC's engines, offer fuel-efficient solutions. Regional aircraft from ATR, Wizz Air, Frontier, Volaris, JetSMART, and others cater to specific markets. Cargo transportation via freighters, commercial helicopters, commercial gliders, and drones also contributes to the industry. Regulations on fuel-efficient engines, advanced materials, legal frameworks, and commercial drone use shape the market. Geopolitical stability, environmental regulations, and sustainable aviation initiatives are essential considerations. Technology integration, including machine learning and artificial intelligence, enhances aircraft safety and operational efficiency.
• Commercial airlines face rising operating expenses (OPEX) due to increasing fuel prices and labor costs. Fuel prices as a result of geopolitical events, such as US sanctions on Iran's oil exports and OPEC production cuts. Fuel costs are variable, based on crude oil prices, while labor costs are fixed in the short term. Unit labor costs have significantly increased after years of stability. These rising costs put pressure on unit costs and negatively impact airline profit margins.

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Segment Overview 

This commercial airlines market report extensively covers market segmentation by  

Revenue Stream

• 1.1 Passenger
• 1.2 Cargo

Type 

• 2.1 International
• 2.2 Domestic

Geography 

• 3.1 APAC
• 3.2 Europe
• 3.3 North America
• 3.4 Middle East and Africa
• 3.5 South America

1.1 Passenger-  The commercial airlines market experienced significant growth in the passenger segment in 2024, with a record 4.6 billion passengers passing through airports worldwide, representing a 28.3% increase. This growth was primarily driven by the expanding air travel market in the Asia-Pacific region. In response, major aircraft Original Equipment Manufacturers (OEMs) have initiated facility upgrades to meet increased demand and ensure on-time deliveries. Low-cost carriers (LCCs) are modernizing their fleets to capitalize on new market opportunities. However, controlling operating costs remains a challenge for commercial airline operators, with rising fuel prices significantly impacting profit margins. Vendors are focusing on fuel-efficient aircraft to mitigate operational expenses. Boeing, for instance, introduced an upgraded 777 model capable of seating between 384 and 426 passengers, while designing the B797 to expand its narrow-body offerings post the B737 MAX grounding. Meggitt Plc supplies advanced electronic bleed air systems for B737MAX, contributing to aircraft efficiency and profitability. These developments are expected to enhance aircraft efficiency and boost the passenger segment's growth in the market during the forecast period.

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Research Analysis

The commercial airlines market encompasses the design, manufacturing, and operation of passenger aircraft, excluding key players and companies. This industry focuses on the production of various sub-aircraft types, including narrowbody aircraft. Narrowbody Aircraft are popular due to their fuel-efficiency and modern design, catering to the commercial aviation industry's growing demand. Product offerings range from fuselage, wings, cockpit, engine, tail assembly, landing gear, to propeller and turbofan engines. New aircraft technologies and engine programs continue to revolutionize the market, with Delta Airlines' investment in the SpaceJet by Mitsubishi Heavy Industries being a notable example. Additionally, the market includes partnerships between ROSTEC and ATR, focusing on cargo transportation and commercial helicopters. The commercial aviation industry's evolution is marked by advancements in aircraft technologies, offering passengers a more comfortable and efficient travel experience. Commercial gliders are another niche segment, providing an alternative to traditional aircraft for short-haul routes.

Market Research Overview

The commercial airlines market encompasses the design, manufacturing, and operation of passenger aircraft and related technologies. Narrowbody Aircraft, a sub-aircraft type, is a popular choice due to its fuel-efficiency and modern design. The commercial aviation industry continues to grow, driven by the UNWTO's promotion of cross-border travelers and increasing GDP in emerging countries. Airlines manage their fleets to reduce operating costs, placing orders for new aircraft based on economic conditions and passenger traffic. Business and leisure sectors fuel demand for air transport, while new aircraft technologies, engine programs, and fleet expansion plans shape the industry. Wide-body and narrow-body aircraft, as well as regional aircraft like those produced by Mitsubishi Heavy Industries and ATR, serve various market segments. Cargo transportation, including freighters and drones, also plays a role in the market. The fuselage, wings, cockpit, engine, propeller, tail assembly, and landing gear are essential components of commercial aircraft. Commercial helicopters, gliders, and various types of engines, including turboshaft, rocket, and aircraft turbines, are also part of the market landscape. Air travel demand, airline profitability, geopolitical stability, environmental regulations, sustainable aviation, urban air mobility, connectivity, technology integration, and fuel-efficient engines are key factors influencing the market. Legal frameworks, commercial drone use, parts, machine learning, and artificial intelligence are also shaping the future of commercial aviation.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Revenue Stream
• Passenger
• Cargo
• Type
• International
• Domestic
• Geography
• APAC
• Europe
• North America
• Middle East And Africa
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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