by The domestic aviation market consists of aircraft like commercial airliners and general aviation aircraft like business jets, helicopters, ultra-light and light aircraft which are used exclusively for domestic travel within a country. Commercial airliners include narrow-body jets like Airbus A320 and Boeing 737 families along with their variants and turboprops. These aircraft are used by full service carriers and low-cost carriers to connect main metro cities as well as smaller towns within countries. Growing passenger traffic within countries due to increasing disposable income, lower airfares and expanding airport infrastructure has been a major driver of aircraft demand in the domestic aviation market. The global domestic aviation market is estimated to be valued at US$ 10.89 Billion in 2023 and is expected to exhibit a CAGR of 2.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The domestic aviation market is undergoing some key trends such as growing demand for low-cost carriers (LCC) and their fleet modernization plans. Low-cost carriers have gained huge popularity in recent years due their no-frills services at competitive rates and on-time performance. They have expanded their network to connect smaller cities within countries. To fuel their expansion plans, LCCs are placing large orders for new narrow-body aircraft from Airbus and Boeing which will be more fuel-efficient than their older fleet. This modernization of LCC fleet is expected to drive demand for domestic aircraft over the forecast period. Further, rising middle-class population is driving tourism and leisure travel within countries which is benefiting full service carriers and LCCs alike. The other trends include expanding use of business jets for private air charters as well as for air ambulance services.
Porter’s Analysis
Threat of new entrants: The domestic aviation market requires huge capital investments for procuring aircrafts, establishing infrastructure like runways, terminals etc. This poses high entry barriers for new players.
Bargaining power of buyers: Individual passengers have low bargaining power due to limited switchin options. However, large corporate customers enjoy significant negotiating powers due to bulk bookings.
Bargaining power of suppliers: Aircraft manufacturers like Boeing, Airbus, Embraer wield enormous power due to limited alternatives and long procurement cycles. Airlines have to depend on these suppliers.
Threat of new substitutes: High-speed rail and road transportation pose threats in short-haul routes. Video-conferencing replaces need for physical travel.
Competitive rivalry: Intense competition exists among existing airlines to acquire market share. Carriers resort to pricing wars, loyalty programs and network expansions to boost revenues.
Key Takeaways
The Global Domestic Aviation Market Size is expected to witness high growth over the forecast period supported by revival in travel demand post pandemic. Regions like Asia Pacific and North America are likely to spearhead growth and remain lucrative markets.
Regional analysis: The Asia Pacific region dominates the domestic aviation market led by China, India, Japan, Australia and Southeast Asian countries. Countries like India and China are witnessing exponential rise in passenger volumes supported by expanding middle classes and economic growth.
Key players: Key players operating in the domestic aviation market are Singapore Airlines, Air New Zealand, Qantas, Qatar Airways, Virgin Australia, Emirates, All Nippon Airways, EVA Air, American Airline, Spicejet, The Boeing Company, Airbus SE, Lockheed Martin Corporation and Textron Inc, Embraer S.A.. Major airlines are strengthening their domestic networks and fleet through new additions. Leading manufacturers are witnessing mounting orders for domestic fleets.
