Airbus revised its passenger aircraft demand by 1%, citing the fallout from the Iran War and global trade tensions. The revision marks the end of a sustained period of growth for the industry, as it seeks to rebound from the COVID-19 pandemic.
The move comes as airlines trim their capacity growth plans in the wake of higher oil prices stemming from the Iran war.
Reduced Jet Deliveries
In a press statement, Airbus said that it was expecting 42,060 total passenger jet deliveries between 2026 and 2045. It also confirmed that 47% of deliveries will be replacing older jets, rather than increasing the overall fleet size.
Also, Reuters reported that the manufacturer has upwardly revised passenger traffic growth to 3.9% from 3.6%.
Asian demand and Middle East Travel Returns
Over half of Airbus’ deliveries will be in Asia, a sign of rising demand in the region. India remains the world’s fastest growing air travel market, where Airbus have revised its forecast for annual domestic traffic from 8.9% up to 9.1%.
Similarly, the manufacturer lowered its growth forecast for China’s domestic market from 5.4% to 4.7%.
According to data from Flightradar24, the total number of flights operated by the leading Middle Eastern airlines has reached 82% of the level recorded just before the start of the Iran War.
Comment from Russell
Chris Don, Russell’s Head of Communications and External Affairs said:
“The fortunes of the aviation and aerospace industry have fluctuated since the pandemic began, going from highs to lows to renewed highs in spirals of investor despair and euphoria because this sector is so connected to the global economy.
“The Iran war is just another in a series of global economic shocks that have ripple effects far beyond the Persian Gulf. Demand in the Far East, however, is robust and the long-term picture for passenger demand is healthy enough. Yet, the sector is not immune to global inflation risks, war risk exposures, geopolitical upheavals and supply chain crunches that could potentially cripple manufacturers.”
