The Boeing Services Market Outlook (SMO) provides an overview of projected performance and anticipated market trends of key life-cycle service capabilities currently serving aerospace customers. The SMO is a 10-year forecast intended to guide business planning and to share Boeing’s analysis of services industry trends in the commercial; business aviation and general aviation (BAGA), which includes civil helicopters; and government markets based on past performance, current economic and environmental factors, and customer demand and opinion. The Boeing models for projecting the size of services markets are analytically linked to proprietary models used to forecast the global commercial airline fleet and government budgets, as well as independent assessments of specific services market drivers.
Boeing expects the support and services 10-year market to be worth $3 trillion between 2020 and 2029. This is a decrease of 2.2% from the 2019 forecast, driven by near-term impacts to travel demand caused by the COVID-19 pandemic. The pandemic’s impact on the aviation sector caused an immediate and sharp decline in the demand for services supporting commercial airplanes and increased demand for services supporting government readiness objectives. The near-term commercial services forecast will realize the biggest impact, with a nearly 10% decline. Commercial services represents $1.6 trillion of the forecast and includes services to support the BAGA market. Government services represents $1.4 trillion of the forecast. Support and services capabilities are diverse in terms of sales, activity scope, capital intensity and competitive environment. Boeing segments the services market into four key capability areas based on customer requirements: parts and supply chain; engineering, modifications and maintenance; training and professional services; and digital solutions and analytics.
The International Air Transport Association (IATA) projects the expenditures and revenues of airlines globally, which totaled $795 billion and $838 billion in 2019, respectively. For 2020, IATA forecasts a decline in expenses of more than 30% and an even larger deterioration in revenues as a result of COVID-19. This indicates that the strain on the industry is profound and widespread. However, the aviation industry has proven resilient over time and in the face of past crises. The ingenuity and determination of the millions of people working in aerospace will undoubtedly allow the industry to navigate near-term challenges.
We are confident in the long-term growth of the services market. We expect our industry to recover following several years of volatility for the commercial services sector, with the government services sector providing critical stability.