Aviation Market Size Nears $1 Trillion as Backlogs Stretch into the 2030s

Aviation Market Size: 2024 Snapshot

In the Aviation sector, The commercial aviation market has regained altitude, with global airline revenues approaching the trillion-dollar threshold in 2024, according to industry outlooks that highlight resilient demand and disciplined capacity growth. The airline sector’s top line is on track for roughly $1 trillion in annual revenue and a low-single-digit net margin, according to IATA’s mid-year outlook, underscoring a recovery that is broadening beyond leisure into corporate and long-haul segments.

Traffic has rebounded to near or above pre-pandemic levels on many routes, aided by reopened borders and improved aircraft utilization. Global passenger volumes and load factors have normalized across most regions, though the pace of recovery varies by market maturity and travel purpose; aggregated air transport statistics confirm how close the sector is to a full return, data from ICAO show. With yields moderating from pandemic-era highs, revenue growth is increasingly tied to network optimization, ancillary sales, and the return of high-margin premium travel.

Fleet Expansion and Order Backlogs Define the Next Decade

While airline P&L captures the near-term market size, the long-cycle value embedded in aircraft and services is even larger. Over the next 20 years, the industry will take delivery of more than 42,000 new commercial jets as the global fleet expands and retires older, less efficient models. This multi-trillion-dollar equipment and services opportunity is mapped in Boeing’s Commercial Market Outlook, which projects sustained narrowbody dominance, rising intra-regional traffic, and strong demand for aftermarket support.

Order backlogs at Airbus and Boeing collectively hover around the mid-teens of thousands of aircraft, effectively sold out for several years. Supply-chain constraints across engines, castings, and avionics have tempered near-term deliveries, pushing airlines to extend leases and keep older aircraft flying. That dynamic, alongside high utilization, is buoying maintenance, repair, and overhaul demand for providers and OEM-linked service units at companies such as GE Aerospace, RTX, Safran, and Rolls-Royce, reinforcing the services share of aviation’s total addressable market.

Regional and Segment Trends Reshaping Demand

Asia-Pacific is set to lead traffic and fleet growth, followed by North America and Europe, with domestic and intra-regional flows driving most seat capacity additions. Narrowbody aircraft will account for the majority of deliveries as low-cost carriers proliferate and full-service airlines reshape fleets for flexibility. Long-term demand assumptions are broadly corroborated by Airbus’s Global Market Forecast, which highlights the structural rise of middle-class travelers and the need for more fuel-efficient fleets.

Segment dynamics are diverging. Low-cost and ultra-low-cost carriers continue to capitalize on price-sensitive demand and secondary airports, while network carriers lean into premium economy and business cabins to lift unit revenue. Cargo has normalized from its pandemic surge but remains structurally important for belly capacity on long-haul routes, supporting widebody economics for Gulf super-connectors and global network airlines.

Profitability, Costs, and the Sustainability Premium

Despite solid top-line growth, cost pressures shape the market’s investable contours. Jet fuel volatility, wage inflation, and aircraft financing costs are pressuring margins, prompting airlines to emphasize capacity discipline and ancillary monetization. Sustainability is adding a new cost curve: sustainable aviation fuel (SAF) currently carries a significant premium over conventional jet fuel, often several times higher, according to the IEA’s analysis of SAF economics.

Policy tailwinds and mandates—ranging from CORSIA’s carbon-offsetting regime to European blending requirements—are accelerating SAF adoption and fleet renewal, but they also require capital. Airlines and lessors are threading a narrow path between upgrading fleets for efficiency and managing balance sheets in a higher-rate environment. For OEMs and suppliers, this creates a durable aftermarket and modification cycle alongside new-production growth.

Outlook: What to Watch Through 2026

Into 2025–2026, base-case scenarios point to mid-single-digit capacity growth, a gradual easing of supply-chain bottlenecks, and continued strength in travel demand, particularly in Asia and transatlantic markets. If OEM production recovers as planned, deferred deliveries should translate into incremental capacity, while aging aircraft retirements keep net growth steady and support yields.

Key watch items for executives and investors include the pace of narrowbody production normalization, SAF availability and pricing, China’s outbound travel demand, and air traffic management modernization. Together, these factors will determine whether aviation’s market size—measured across airline revenues, aircraft deliveries, and aftermarket services—can sustain its climb above the trillion-dollar level while expanding profitability across the value chain.