Airbus Sees Digital Connectivity, Asia-Pacific Growth Driving Services Demand

Digital and connectivity services will drive significant growth in Airbus’ services business over the next 20 years as the fleet shifts toward connected aircraft, according to the OEM’s latest Global Services Forecast.

During a media presentation Oct. 9, Airbus shared figures showing a 10% year-on-year increase in total services demand this year that it expects to increase at a 3.6% compound annual growth rate (CAGR) over the next 20 years, generating $311 billion in demand by 2044. The OEM said demand for digital and connectivity services increased 12% over last year, generating $9 billion in demand this year. It expects the segment to reach $26 billion in demand by 2044, increasing at a 5.6% CAGR.

Arnaud Demeusois, head of services marketing at Airbus, noted that the global fleet now has 11,000 connected aircraft—twice the amount compared with 2010. Cristina Aguilar Grieder, Airbus’ senior vice president of customer services, said, “Digital solutions are becoming real multipliers, enabling operators to scale up without compromising on reliability or cost.” She expects the technology to unlock more than $83 billion annual operational savings for its customers.

Segments also expanding quickly for Airbus include modifications and upgrades, which has grown 18% year-over-year, and training, which has grown 11% year-over-year, driven by the industry’s need for new technical talent. Airbus expects global demand for 705,000 new technicians, 633,000 new pilots and over one million new cabin crew by 2044.

Amaya Rodriguez Gonzalez, vice president of aftermarket strategy customer services, noted the new pilot training center Airbus opened with Air India on Sept. 30. Airbus also opened an aircraft maintenance training school in Hyderabad last year with GMR Aero Technic.

The new training initiatives are following the OEM’s anticipated growth in the Asia-Pacific region. Gonzalez noted that Airbus has clearly seen “aftermarket demand going eastward.” It expects South Asia’s aftermarket demand to grow the most significantly over the next 20 years at 8.8% CAGR, to $20.6 billion. Airbus expects China to have the next highest growth at 5.1% CAGR, to $63.8 billion, followed by the Asia-Pacific at 4.4% CAGR, to $54.3 billion.

Off-wing and on-wing maintenance are also expected to grow over the next 20 years as the fleet expands. Airbus says on-wing maintenance will generate $34 billion in demand by 2044, and off-wing maintenance will generate $218 billion in demand during this period, with material supply accounting for 85% of the value in this category. Demeusois said the fleet will approximately double by 2044 to more than 49,000, most of which will be new-generation aircraft. He noted that Airbus expects there to be more than 17,000 base and heavy maintenance checks in 2044, up from around 10,000 this year.

Modifications and upgrades should also continue to generate service demand as operators seek to modernize their fleets and compete with one another, Demeusois said. The segment is expected to generate $12 billion in demand this year and 17% billion in demand by 2044. In-demand services include cabin and systems upgrades. For instance, Demeusois said Airbus has received many requests to provide upgrades related to reducing fuel burn, such as its Descent Profile Optimization update for the aircraft flight management system.

Airbus is also exploring two other service segments. The first is what it classifies as maintenance operations support, which includes services related to engineering, technical records, inventory management and fleet-wide planning. The second is ground operations, such as baggage loading/unloading, cabin cleaning and turnaround time management. Demeusois said Airbus believes ground operations are a significant focus area and cost for airlines, so the company expects advancements and new services in this area—such as ground support equipment modernization, real-time digital monitoring and the addition of skilled staff—could potentially reduce between 20-25% cost per turnaround by 2044.

During last year’s Airbus Global Services Forecast, the OEM highlighted a predicted 7.5% CAGR in the aircraft dismantling and recycling market. In this year’s presentation, Airbus said parts shortages have softened as the aftermarket improves transparency and adopts alternative solutions, such as used serviceable material (USM). When Aviation Week asked about how growth in this sector has materialized over the last year, Grieder noted that growth has been slightly below Airbus’ expectations because operators have been keeping aircraft in service longer than initially expected, driven in part by engine issues, but “looking to the future, we have big expectations and the feedback we have received from customers is that they need this service, so we remain fully committed.”

Gonzalez added that Airbus remains committed to USM as a growth market, particularly as part of its sustainability ambitions, and it expects more growth as operators continue to phase out older aircraft.