As the world emerges from the shadow of the COVID-19 pandemic, the global aviation industry finds itself at a critical juncture. A new report from consulting firm Oliver Wyman paints a picture of an industry poised for growth, yet grappling with the lingering effects of its most severe crisis in modern history.
The International Air Transport Association (IATA) reports that air traffic has nearly returned to pre-pandemic levels, reaching 98.2% of 2019 figures in the last quarter of 2023. This rebound sets the stage for what could be a period of unprecedented expansion in both fleet size and maintenance operations.
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According to Oliver Wyman’s Global Fleet and MRO Market Forecast, the worldwide commercial aircraft fleet is expected to grow to over 36,400 by 2034, a 28% increase from the current fleet of about 28,400. This growth trajectory, however, comes with a caveat: it represents a six-year setback compared to pre-pandemic projections, underscoring the depth of the industry’s recent struggles.
Nowhere is this dynamic more evident than in Africa. The continent’s aviation sector, which lost $7.7 billion in revenue in 2020 alone, is now positioned for significant growth. Oliver Wyman predicts Africa’s fleet will expand by about 25% over the next decade, reaching more than 1,400 aircraft by 2034.
“The growth in Africa reflects an expected expansion of demand,” said Paul Calvey, an Oliver Wyman partner based in South Africa. “African passenger numbers will nearly double by 2035. This will require airlines to continue to invest in expanding their fleet, as well as looking at new routes to add to their network.”
But the path to this growth is far from smooth. The industry faces a complex web of challenges, from rising interest rates and inflation to shortages of skilled labor and raw materials. These pressures are compounded by the need to invest in sustainability measures, such as the development of sustainable aviation fuel (SAF).
“Rapidly rising interest rates have made borrowing far more expensive than it was pre-pandemic,” explained André Martins, who heads Oliver Wyman’s transportation practice in the India, Middle East, and Africa regions. “Mounting inflation, meanwhile, has created significant wage pressure across the industry.”
The financial strain is particularly acute for airlines. In the United States, for instance, captains’ salaries at mainline carriers increased by 46% between 2020 and 2023, while regional airline pilots saw their wages rise by 86%.
Despite these headwinds, there are reasons for cautious optimism. Global economic conditions are expected to improve, with inflation likely to ease and major economies potentially avoiding a recession. This could lead to reduced interest rates, making crucial investments more feasible for airlines and related businesses.
For Africa, the coming years present both significant challenges and unprecedented opportunities. Success will depend on strategic collaboration in infrastructure development and targeted investment in African carriers. As Paul Calvey noted, “By maximizing the available opportunities in Africa, the industry can not only recover but thrive in the coming years.”
As the global aviation industry navigates this complex landscape, its ability to secure necessary investments while adapting to changing economic, technological, and environmental demands will be crucial. For Africa’s aviation sector, in particular, the next decade could mark a pivotal period of growth and transformation, provided it can overcome the turbulence that lies ahead.
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