Global Aircraft Engine Market Outlook, 2029

Market Dynamic

Market Drivers • Rising Global Air Travel Demand: As economies grow, more people are entering the middle class, leading to an upsurge in air travel for both business and leisure. Airlines are expanding their fleets to accommodate this growing demand, resulting in a higher need for advanced and efficient aircraft engines. The rise in air travel demand stimulates aircraft manufacturers to produce more airplanes, subsequently driving demand for aircraft engines. This increased demand encourages innovation in engine technologies to meet the requirements of modern and fuel-efficient aircraft. • Technological Advancements and Innovations: Ongoing technological advancements play a crucial role in propelling the aircraft engine market forward. Innovations in materials, design, and manufacturing processes contribute to the development of more powerful, fuel-efficient, and environmentally friendly engines. Manufacturers continually invest in research and development to gain a competitive edge by introducing cutting-edge technologies in their engines. The integration of advanced materials, such as lightweight composites and high-strength alloys, enhances the efficiency and performance of aircraft engines. Technological advancements also address environmental concerns, with a focus on reducing emissions and noise pollution. This constant pursuit of innovation attracts customers looking for state-of-the-art, reliable, and sustainable propulsion systems. Market Challenges • Stringent Environmental Regulations: Stringent environmental regulations pose a significant challenge for the aircraft engine market. Governments and international bodies are imposing strict emission standards and noise restrictions to address environmental concerns associated with aviation. Meeting these regulations requires significant investments in research and development to develop engines that are not only more fuel-efficient but also produce lower emissions and noise levels. Manufacturers face the challenge of balancing the need for increased efficiency with environmental sustainability. This challenge has led to the exploration of alternative fuels, hybrid-electric propulsion, and other eco-friendly technologies to comply with environmental standards and remain competitive in the market. • Global Economic Uncertainties: The aircraft engine market is sensitive to global economic fluctuations. Economic uncertainties, geopolitical tensions, and factors like the COVID-19 pandemic can impact air travel demand and airline profitability. Such uncertainties can lead to delays or cancellations in aircraft orders, affecting the demand for new engines and placing financial pressures on manufacturers. Economic challenges can disrupt the long-term planning of both airlines and aircraft engine manufacturers. The unpredictability of the market can influence investment decisions, research budgets, and production schedules. Companies must navigate these uncertainties by adapting their strategies to the changing economic landscape. Market Trends • Transition to Electric and Hybrid Propulsion: As the aviation industry strives to reduce its environmental footprint, there is a growing interest in electric aircraft and hybrid solutions that combine traditional engines with electric motors. This trend is driven by advancements in battery technology and the pursuit of zero-emission flight. The development of electric and hybrid propulsion systems is reshaping the landscape of aircraft engines. While electric propulsion is currently more common in smaller aircraft, ongoing research aims to bring these technologies to larger commercial planes. This trend aligns with the industry's commitment to sustainable aviation and reducing greenhouse gas emissions. • Adoption of Digital Technologies: The aircraft engine industry is witnessing a trend towards the adoption of digital technologies for improved efficiency and maintenance. The integration of data analytics, artificial intelligence, and predictive maintenance systems allows for real-time monitoring of engine performance. This shift towards "smart" engines enhances reliability, reduces downtime, and optimizes operational costs. The incorporation of digital technologies in aircraft engines is transforming traditional maintenance practices. Predictive analytics can anticipate potential issues, enabling proactive maintenance and minimizing unplanned downtime. This trend aligns with the broader industry movement towards digitization and Industry 4.0 principles. Covid-19 Impacts The most immediate and severe impact of the pandemic on the aircraft engine industry was the sharp decline in air travel demand. Lockdowns, travel restrictions, and concerns about the spread of the virus led to a global decrease in passenger flights. Airlines scaled back operations, parked or retired aircraft, and deferred maintenance, affecting the utilization and demand for new engines. Many airlines faced unprecedented financial challenges due to the decline in passenger traffic. This led to reduced budgets for capital expenditures, including the purchase of new aircraft and engines. Airlines that were struggling financially canceled or postponed orders for new planes, impacting aircraft engine manufacturers. The pandemic disrupted global supply chains, affecting the production and delivery of aircraft engines. Manufacturing facilities faced closures or reduced capacity due to lockdowns and health concerns. Delays in the supply chain impacted the ability of aircraft engine manufacturers to meet production schedules, resulting in postponed deliveries to both original equipment manufacturers (OEMs) and airlines. Airlines, in an effort to conserve cash, deferred non-essential maintenance activities, including engine overhauls. This decision aimed to extend the operational life of existing engines without incurring additional costs. While this helped airlines manage short-term financial challenges, it raised concerns about the long-term health and reliability of aircraft engines. The decline in air travel reduced the need for maintenance services on aircraft engines. MRO providers experienced a decrease in demand for engine repairs and overhauls as airlines reduced their fleets or parked aircraft. This downturn in MRO activity had financial implications for companies specializing in engine maintenance. Aircraft engine manufacturers that were in the midst of developing and certifying new engine programs faced challenges. The slowdown in aviation activities affected the testing, certification, and entry into service of new engines. Delays in these processes impacted the planned revenue streams for manufacturers.

Key Development

• In February 2022, Safran Helicopter Engines signed a Memorandum of Understanding (MoU) with ST Engineering to conduct a study on the use of Sustainable Aviation Fuel (SAF) in helicopter engines. The study aims to assist helicopter operators in switching from conventional fossil fuels to SAF. • In February 2022, Embraer, Widerøe, and Rolls-Royce entered into a research partnership agreement to conduct a 12-month study and research innovative sustainable technologies for regional planes, focusing on developing a conceptual zero-emissions aircraft. • In January 2022, Qatar Airways placed an order for GE9X engines as part of its global launch order of up to 50 Boeing 777-8 Freighters. GE Aviation received a commitment from the airline for 30 GE9X engines and four GE90-115B engines for Boeing 777-8 aircraft (34 aircraft firm order with an additional 16 purchase right options). • In November 2022, with the first flight of a modern aero engine powered by hydrogen, Rolls-Royce and easyJet officially announced they had achieved a new aviation milestone. The ground test was performed using green hydrogen produced by wind and tidal power on a prototype demonstrator. It is a crucial proof point in both Rolls-Royce and easyJet's decarbonization strategies and represents a significant move towards demonstrating that hydrogen could be a zero-carbon aviation fuel in the future.