The Latin American aviation market is projected to register a CAGR of more than 1% during the forecast period.
- The growth of low-cost carriers in the region is acting as a major driver for the growth of the aviation market in Latin America.
- The privatization of airports in countries, like Jamaica, Honduras, Paraguay, and Peru, is also supporting the growth of the aviation market in the region.
- However, economic instability has led to decreased expenditure by the government in few countries, which can hamper the growth of the Latin American aviation market in the coming years.
Key Market Trends
The Commercial Segment is Expected to Experience the Highest Growth During the Forecast Period
The commercial segment of the Latin American aviation market is anticipated to register the highest CAGR during the forecast period. Though the commercial aviation industry growth in the region is less compared to several regions in the world, the growth of LCCs in the region is expected to drive the market in the years to come. Azul, LATAM, GOL, Volaris, and JetSmart some of the major airlines operating in the region. They currently have huge aircraft order backlogs. In addition to regional airlines, foreign airlines are expanding into this region. For instance, Norwegian Group launched Norwegian Air Argentina in January 2017 and commenced operations from October 2018, in Argentina. As the passenger traffic is growing, major airports in the region are undergoing renovation projects to increase their passenger and aircraft handling capacities. For instance, in March 2018, the Argentine government announced plans to invest USD 750 million in the expansion of Ezeiza International Airport. The renovation of the airport may help it accommodate four times the number of aircraft than the current capacity. In Latin America, to boost the number of air passengers, commercial airlines are providing attractive services, like free checked baggage, competitively priced fares, and new routes. Many commercial airlines in the region are upgrading their aircraft fleet. For instance, in October 2019, the Mexican airline, Interjet, finalized a deal to buy 12 Airbus A220 passenger jets to replace its partly grounded fleet of Sukhoi Superjet regional aircraft. Such developments are expected to drive the Latin American aviation market.
Currently Brazil Holds the Highest Market Share among Other Countries in Latin America
As of 2019, Brazil had the highest market share in the Latin American aviation market. Brazil is one of the booming markets in the commercial aviation industry, as well as one of the top 15 military spenders in the world. In the past few years, the Army and Navy of Brazil received funds to replace their aging aircraft fleet. Brazil signed a contract with Saab AB to acquire 36 Gripen NG fighter aircraft for the Brazilian Air Force, worth USD 5.4 billion. The contract was signed in October 2014, with deliveries planned to begin by mid-2019 and run through 2024. Similarly, in September 2019, the local aircraft manufacturer, Embraer, delivered the first 28 multi-mission airlift KC-390 to the Brazilian Air Force. In the commercial sector, to improve the infrastructure for air travel across the country, the Government of Brazil announced its plan to privatize 20 airports. Major commercial airlines are investing heavily in the procurement of new aircraft. For instance, the Brazilian commercial airline, Azul, placed an order of 51 Embraer E-Jet E2 family of aircraft and received six aircraft by the end of 2019. Thus, the ongoing investments in airport infrastructure and the growing emphasis on airline fleet expansion to match the capacity demand are propelling the growth of the aviation market in Brazil.
Some of the prominent players in the Latin American aviation market are Embraer SA, Airbus SE, The Boeing Company, Bombardier Inc., and Lockheed Martin Corporation. The current ongoing talks on the partnership between Embraer and Boeing, under which Boeing plans to take 80% share in Embraer's commercial aircraft portfolio and aftermarket support services, onmay have a positive impact over the aviation market in Latin America. Boeing and Embraer are in plans to form a second joint venture for the manufacturing of KC-390 military transport aircraft, in which Embraer may hold a 51% stake and Boeing may hold the remaining 49%. These deals are expected to be completed once the regulatory issues are sorted. Such partnerships and joint ventures are expected to make the market more consolidated in the years to come.
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1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Drivers
4.2 Market Restraints
4.3 Porter's Five Forces Analysis
4.3.1 Threat of New Entrants
4.3.2 Bargaining Power of Buyers/Consumers
4.3.3 Bargaining Power of Suppliers
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
5.1.1 Commerical Aircraft
5.1.2 Military Aircraft
5.1.3 General Aviation
5.2.1 Latin America
188.8.131.52 Rest of Latin America
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Textron Inc.
6.1.2 Embraer SA
6.1.3 Bombardier Inc.
6.1.4 Airbus SE
6.1.5 The Boeing Company
6.1.6 Dassault Aviation
6.1.7 Lockheed Martin Corporation
6.1.8 Leonardo SpA
6.1.9 Saab AB
6.1.10 Honda Aircraft Company
7 MARKET OPPORTUNITIES AND FUTURE TRENDS
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.