Avolon released its Avolon Outlook Paper 2024_New Horizons_FINAL for 2024.
The lessor’s key points are:
- More people to fly in 2024 than ever before as passenger revenue set to rise to US$717 billion
- India, Saudi Arabia, and the UAE are emerging as key drivers of growth
- Momentum builds behind SAF as key de-carbonization lever
Avolon expects value of new aircraft deliveries to rise by over 15% to $100 billion in 2024. They project delivery of over 1,450 new large commercial aircraft helping to drive airline passenger revenues up 12% to $717 billion. Airline industry net profit is projected to rise by 10% to $26 billion.
Avolon is also upbeat on traffic: 4.7 billion people are expected to fly in 2024, more than any year in history. Andy Cronin, CEO of Avolon said: “The economic and social benefits of traveling will continue to drive aviation and underpin the resilience of our sector. Airlines’ growth in 2024 will be supported by around US$100 billion in new aircraft deliveries, with lessor order books and capital supporting fleet expansion plans. While geopolitical and economic risks remain, the market backdrop as we start the year is likely to drive lease rates and residual values higher.”
There are interesting tidbits, too.
- Engine-related AOGs peak in June – New technology engine durability challenges have been major disruptions to airline operations. Design and production quality issues will continue to persist in the fleet for years, but the operational impact will diminish following the peak mid-year.
- Widebody production skylines will sell out to the end of the decade – Mega-orders have filled up the manufacturers’ skylines. Asian airlines late to order risk missing out. The remaining slots will soon be sold, leading to increased demand for lessor slots and used widebodies.
- The next clean-sheet large commercial aircraft enters service in 2036 –Given the 10-years plus it will take from program green light to certification, Boeing and Airbus will need to commit to their next designs soon. No new clean-sheet designs for the next decade protects the investment case of today’s new-technology aircraft.
- A global framework for a SAF book-and-claim system is agreed – Airlines and lessors will have access to verified SAF credits enabling them to leverage SAF without having to transport liquid fuels over long distances. Agreeing a framework will attract the capital required to kick-start SAF production.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.