The International Air Transport Association (IATA) has announced that 2023 exceeded initial profit expectations, and the outlook for 2024 is even more promising with projections indicating a record $964bn revenue for the airline industry in the coming year.
In fact, 2023 was a near-historic year with a surge in aircraft purchases, including during the Dubai Airshow with Emirates ordering 95 Boeing and 15 Airbus planes, Air Baltic firming 30 additional A220-300s and Turkish Airlines signing a momentous deal for 220 Airbus aircraft in December. As reported in November, these deals are part of a record -breaking 2,370 aircraft orders placed with the two manufacturers in 2023.
As this year’s activity shows, there is industry-wide confidence in the future, with travel now back to pre-pandemic levels. This trend is likely to continue, even if demand might dampen slightly in response to a recession forecast in the US in the first half of 2024.
While the confidence on display is good news for the industry, it also poses challenges to airlines as we move into 2024. If demand remains high, securing new planes could prove difficult as order backlogs for Airbus and Boeing hit record highs of almost 14,000 to the end of October, according to data from aviation consultancy Cirium.
For airlines facing challenges in acquiring the necessary aircraft, the pre-owned market presents a compelling solution, offering not only significant cost savings but also a broader range.
Outside the pre-owned market, smaller airlines are increasingly looking beyond Airbus and Boeing at other manufacturers, with Porter Airlines placing an order for 25 Embraer E195-E2 passenger jets – in addition to 50 existing firm orders – in November.
At Jetcraft Commercial, we’ve been supporting a range of regional and startup airlines via the pre-owned market globally, including in Central Asia, Africa and the Americas.
Notable examples in 2023 include our acquisition of three ATR72-600 aircraft from Bangkok Airways, which we delivered to Uzbekistan Airports to be placed with the country’s new community airline, SilkAvia, to facilitate connections to remote communities.
We have also responded to high demand for Dash 8-400 turboprops by finalizing multiple deals to buy and sell the aircraft worldwide. Equally, we’ve closed an important launch order for Twin Otter 300G.
The power of our network has also enabled us to facilitate more complex transactions, helping turn aircraft grounded by the pandemic – which required upgraded engines – into valuable assets.
For regional and startup airlines, identifying opportunities within the pre-owned market will prove key to responding to the travel recovery in 2024. When considering aircraft to purchase, airlines should also take careful consideration when placing long term orders due to ongoing manufacturer delays.
It is essential for airlines to factor these extended timelines into their strategic planning to ensure seamless operations and timely fleet expansion, as well as closely monitoring industry trends and production capabilities.
There are plenty of reasons for the commercial aviation sector to be optimistic as we head in to 2024. While the surge in demand also brings its own challenges, these can mostly be managed through a deep understanding of the market, an extensive network and full visibility of global aircraft availability. As industry experts, Jetcraft Commercial is on hand to navigate our clients through market developments ahead of another busy 2024 and beyond.
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