NEW YORK, May 30, 2016 /PRNewswire/ -- 2016 Global Outlook for the Air Transport Industry : Continued Record Production Facing Possible Model Change Delays
Continued record commercial aircraft production will be slowed slightly by model changes. New, clean sheet of paper models will be unlikely, but major upgrades of existing models will be more prevalent than ever before. However, original equipment manufacturers (OEMs) will have missteps during this process. Second and third tier suppliers will be most affected by the model changes. They will be hard pressed to meet OEMs' production schedules as they change. Because aircraft components are a just-in-time business, it may force suppliers into shelf stocking. The real opportunities are in the Asia-Pacific countries. New aircraft programs are under development there and, in the short term, may be good programs for existing suppliers. Eventually, those opportunities may evaporate as OEMs turn to local suppliers.
Top Trends for 2016
The overall trend remains the contest between Boeing and Airbus for market share.
1 Rising and/or unpredictable fuel costs will continue to drive demand for greater operational efficiencies and weight reductions. This trend will continue to be felt across all segments of the market.
2 A duopoly, Airbus-Boeing, controls a market with significant barriers and yet, because of the current market share battles, especially in the narrowbody segment, only manages to generate single-digit margins. This focus on market share will further negative pricing trends and force OEMs to go beyond their traditional roles and perhaps lose focus on the decade ahead at the risk of innovation and sound product launch decisions.
3 On the interior side of the market, new generations of lighter seats are continuing to gain acceptance across all segments of the market. These new interiors are increasingly part of airlines' brand strategies and are widely introduced on existing aircraft with the goal of reducing the passenger experience gap for new and older aircraft and support fleet standardization.
4 The need to increase passenger density will drive retrofits in economy and premium economy classes. The primary trend in business class will be the continued introduction of angled/staggered seats.
5 A surge in wireless connectivity and entertainment offerings will bring new options to airlines without an in-seat inflight entertainment (IFE) solution. 6 Major airlines representing approximately % to % of the fleets will increasingly be able to dictate their configuration needs, while smaller airlines will remain closer to catalog products.
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