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The global digital aviation market size was valued at USD 34.53 billion in 2021 and is projected to grow from USD 37.92 billion in 2022 to USD 65.11 billion by 2029, exhibiting a CAGR of 8.03% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with digital aviation experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global digital aviation market exhibited a decline of -33.8% in 2020 as compared to 2019.
Digital solutions have wide range applications in the aviation industry. These include flight operations, aircraft maintenance, and aircraft data computers, among others. These digital solutions provide right information at the right time allowing airline operators to operate with minimal risk and peak efficiency when aircraft is airborne, on the ground, and in the hangar. In conjunction with data analytics these solutions identify the snag and correct potential issues before they become a hazard.
For instance, Digital Aircraft Operations is an initiative by IATA that supports airline operators in identifying areas and implementing digital solutions for enhanced technical operations. These operations include aircraft maintenance operations, spare parts supply chain and logistics as well as the transfer of aircraft assets.
Airlines are now adopting digital operational standards for the ever-increasing fleet performance provided by e-enabled and connected aircraft. The aim is to explore the effectiveness and provide implementation guidance to airlines in the field of technical operations. Due to innovative technologies and improved processes, the aircraft should be able to provide data to the operator about its history, airworthiness, technical condition and costs. Knowledge of this electronic language is a fundamental competitive advantage in building the future of airlines. Thus, taking the above factors into considerations, the digital aviation market growth will witness significant rise in terms of revenue during the forecast period.
COVID-19 Pandemic Led to Sudden Decline in Passenger Air Traffic
The COVID-19 pandemic had a deep impact on airports, airlines, and their business partners. Despite massive vaccination efforts, the global travel market remained below pre-COVID-19 levels. Additionally, according to the analysis, it was estimated that more than 16,000 commercial aircraft were grounded or parked due to fewer passengers due to the pandemic. Hence, as a result of aircraft grounding, maintenance requirements have drastically reduced and adversely affected the demand for the digital solutions and services domain.
Global passenger traffic in 2021 was expected to reach less than half of what it was in 2019, with traffic in 2021 accounting for only 4.4 billion (48.3%) of the 9.2 billion passengers served two years ago. In addition, the pandemic has caused financial devastation throughout the aviation value chain, especially for airlines. All subsectors in the industry posted massive losses in 2020, with the exception of freight forwarders and cargo airlines.
Flights Impacted Due to Russia & Ukraine War Crisis
As Russia continues its war against Ukraine, its effects on the aviation industry are growing. New air routes, suspension of aircraft deliveries to Russia and pressure on Russian titanium supplies are among the consequences of the war in Ukraine on the aviation sector. The impact of ongoing flight bans on Russian aircraft significantly limits the destinations to which Russian airlines can fly. Almost all of Europe is cut off for Russian travelers and Russian cargo airlines are closed from most of the world's busiest hubs. For instance,
The Russian invasion of Ukraine also affected oil prices. This will have a serious impact on the aviation industry, with fuel prices being extremely important to airlines in terms of operating costs. The demand for these digital solutions has been witnessed for fuel saving and other fuel optimization applications.
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Increasing Adoption of Integrated Cloud Based Data Sharing Platform between Airlines and MRO Service Providers to Propel Market Growth
Traditionally, internal and external data on airline, OEM and MRO workflows are mostly contained and managed in paper assets, leading to huge delays in data acquisition, compliance management transparency, and aircraft availability forecasting. The aerospace industry tends to classify information with little integration between sub-sectors. Seamless data integration between different sectors in the aviation industry such as MROs and airlines would allow integrated cloud data sharing technology to succeed. Allowing this recent technological development to flourish would result in increased performance at lower cost. For example,
Growing AI Technology and Software for Airline Management to Drive the Market Growth
Artificial intelligence and its integrated technologies that make sets of data can streamline and automate analytics, machine maintenance, customer service and many other internal processes and tasks. Thus, AI technologies are useful for various aspects of airline operations management. Leading airlines around the world are already using artificial intelligence in aviation to improve operational efficiency, avoid costly errors and increase customer safety and comfort. Moreover, the adoption of AI in the airline industry significantly reduces operating and overhead costs by optimizing their fleets and operations using AI-powered systems and solutions.
In April 2022, Malaysia Airlines announced that the airline is partnering with Amadeus IT group to adopt Dynamic Intelligence Hub (DIH) and also renewed its Amadeus Altéa Passenger Service System Contract. The DIH is a real-time data engineering platform that will centralize Malaysia Airlines’ data, integrating systems with Artificial Intelligence (AI).
Increasing Demand for Aircraft Health Monitoring Systems for Regular Maintenance Operations to Boost the Market
The Aircraft Health Monitoring System (AHMS) is a set of approaches, solutions, tools, and strategies that are coupled with a hardware and software system that remotely monitors aircraft data to understand its current or future serviceability and performance. The aircraft health monitoring system mainly consists of two components, Air Health Monitoring Subsystem (AHMS) and Ground Health Diagnostic Subsystem (GHMS). AHMS uses real-time data from multiple data sources and sensors that are integrated into aircraft components/parts to improve aircraft safety and reliability. Moreover, Airbus has come up with a health monitoring tool that supports engineering, MCC, and line maintenance to identify, prioritize, process and analyze in-service events, increasing their decision-making, efficiency, and reactivity. Approximately 50 airline operators from around the world have signed an agreement with Airbus to implement health monitoring services on their aircraft. For example,
High Cost and Operational Complexity of Digital Aviation Could Impact Its Adoption
Cost is one of the major factors considered while planning to purchase and use any digital aviation software and solution. With continuously developing technologies in software and equipment, the software needs to be updated for its compatibility with particular platforms and applications. Moreover, the upgrades, integration of system across the different platforms, and the high maintenance cost of these systems are some potential restraining factors involved in this market.
The operating complexity of these digital solutions and software is another factor that hinders the market growth of digital aviation. Owing to high scale programming techniques, this software is programmed with keeping data security as one of the primary concerns. In addition, for implementing these software and solutions, it takes several months for feasibility research for proper understanding of industry operations. However, the data standard models in the aviation industry vary from country to country based on regional aviation authorities. The complexity of operations and lack of common data standards may hamper the market growth of digital aviation.
Software Segment to Hold Highest Market Share Owing to Growing Adoption of Software-based Platforms for Documentation
Based on solution, the market is bifurcated into software and services. The software segment is estimated to be the largest segment in 2021 and it is projected to be the fastest growing segment during the forecast period. The rising adoption of software-based solutions such as digital maintenance manuals, digital logbook, and other aircraft health monitoring software is expected to impel segmental expansion over the estimated period.
Services segment is slated to depict considerable growth over the study period. The growth of this segment is attributed due to increased cloud based network services amongst the aviation industry. Moreover, the growing MRO industry around the world is expected to play a vital role for the service segment growth during the forecast period.
Aircraft Systems Segment to Dominate the Market Owing to Growing Aircraft Fleet around the Globe
Based on application, the market is segmented into aircraft systems, airport information systems, maintenance operations, air traffic management, aircraft health monitoring, passenger services, and others.
The aircraft systems segment dominated the market in 2021.The growth of the segment is attributed to the airline operators and OEMs that have created a surge in demand for advanced software for fleet and inventory management. Moreover, growing aircraft fleets globally and increase in demand for digitized solutions and systems in both commercial and military aircraft industry is set to boost the segment growth.
The maintenance management segment is anticipated to grow with the highest CAGR during the forecast period. The growing need of software for training the maintenance personnel and to manage supply chains to boost the segment growth. In addition, the increased demand for MRO services including, predictive and preventive maintenance operations is expected to drive the segment growth during the forecast period.
Satellite Connectivity Segment to be the Largest Segment Due to Growing Adoption of Satellite based Aircraft Navigation and Communication Systems
Based on connectivity, the market is bifurcated into satellite connectivity and cloud connectivity.
The satellite connectivity segment is expected to be the largest segment over the study period. The growth is due to the increased upgrades of the existing aircraft fleet and growing adoption of satellite based aircraft navigation & communication systems and other instruments and systems on a modern generation aircraft. Moreover, the systems connected through satellite networks provide real-time information and data for efficient aircraft operations.
The cloud connectivity segment is set to witness significant growth through the forecast period. The growth of the segment is attributed to the increased adoption of digitized cloud based systems for data storage and management. For instance, the Electronic flight book is an example of cloud based digitized solution. The EFB system functionality includes various other hosted databases and applications. EFB may use various technologies, formats, and forms of communication.
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Commercial & Civil Segment to Grow With a Significant CAGR Owing To Growing Air Passenger Traffic
Based on platform, the market is segmented into commercial & civil, military, and general aviation.
The commercial & civil segment is estimated to be the largest segment in terms of market share in 2021. The rising demand for commercial aircraft due to growing air passenger traffic is anticipated to fuel the market growth. Moreover, airline operators are accepting the concept of low cost subsidiary airlines to increase their revenue.
The military segment is estimated to grow with the highest CAGR during the projection period. The growth is attributed to increasing military aircraft procurement due to war-like situations in different countries around the world. Moreover, the growing military modernization programs by incorporating digital techniques are set to boost the segment growth. Further, growing digitized techniques and solutions for military aircraft for combat and transport applications are poised to boost the segment growth.
MRO Segment to be the Fastest Growing Segment Owing to Surge in Demand for MRO Services
Based on end-user, the market is segmented into airline operator, MROs, airport operators, and OEMs.
The airline operator segment is evaluated to be the largest segment with market share in 2021. The airline segment is set to grow at a moderate level as many airlines around the world shut down and some are facing some major backlashes post COVID-19 pandemic. However, due to increased air cargo load and passenger air traffic with the growing trend of low cost carriers are the major reasons responsible for the growing airline fleet.
The MRO segment is projected to be the fastest growing segment with a highest CAGR through the study period. The growth of the segment is attributed to the surge in demand for MRO services. Moreover, growing adoption of digital techniques in the MRO industry for applications for such as maintenance planning, inventory management, aircraft health monitoring, and other applications.
The airport operators segment is set to witness significant growth from 2022 to 2029. The growth of the segment is attributed to growing modernization programs for airport development for increased passenger comfort and safety.
North America Digital Aviation Market Size, 2022 (USD Billion)
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The global market of digital aviation is studied across five regions, including North America, Europe, Asia Pacific, and the Middle East, and the rest of the world.
North America dominated the digital aviation market share in 2021. The regional market size stood at USD 9.48 billion in 2021 and is projected to grow at a significant CAGR during the forecast period. The U.S. held a maximum number of airlines and MROs in the region compared to other countries. In addition, the region has more aviation products and aircraft manufacturers that facilitate excellent growth during the forecast period.
The market in Europe is expected to grow at a moderate rate owing to an increase in passenger air traffic, the presence of prominent OEMs, and key players such as Lufthansa Technik and Airbus.
The market of digital aviation in the Asia Pacific region is projected to grow at the highest CAGR during the forecast period. Digitalization in this region is enhancing the technical perspective in the aviation industry for effective and efficient base management, operation management, and line management. Moreover, the growing airlines and MRO industry in the region add growth factors to the market.
The market in the Middle East is estimated to grow at the higher rate in terms of growth and revenue. The growth of this region is attributed to the presence of some major airlines and MRO providers in the region. Moreover, the OEMs from all over the world are investing in Middle Eastern countries and setting up plants for components and system manufacturing.
SITA AERO Emerged as a Market Leader with Strong Brand Portfolio and Customers from All Over the Globe
SITA AERO is a leader in digital aviation. The company is involved in providing digital solutions for airlines and airport operators. The company has global presence with 2,500 customers across the globe and provides services to approximately 400 members globally, which accounts to 90% of the airline business at the global level. Nearly every passenger flight is reliant on SITA technology. Other players, including Airbus SE, GE Aviation, the Boeing Company, and IBM Corporation are some prominent digital aviation players in the market holding a strong country presence and providing products and services with highest quality standards.
An Infographic Representation of Digital Aviation Market
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The research report provides a detailed analysis of the market and focuses on key aspects such as major players, types, and applications on the basis of commercial platform. Additionally, the report provides insights into the parent market, global aviation analytics and aviation MRO software market trends, and the competitive landscape, while highlighting key industry developments. In addition to the factors mentioned above, the report encompasses several direct and indirect factors that have contributed to the sizing of the global market in recent years.
Value (USD Billion)
By Solution, Application, Connectivity, Platform, End-user, and Geography
Fortune Business Insights says that the global market size was USD 34.53 billion in 2021 and is projected to reach USD 65.11 billion by 2029.
The market will exhibit a CAGR of 8.03% during the forecast period.
On the basis of platform, the commercial and civil segment is the leading segment in the market.
SITA AERO, the Boeing Company, Airbus SE, and IBM Corporation are some of the leading players in the global market.
North America dominated the market in terms of share in 2021.
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