This week, many of our industry colleagues attended the MRO Middle East conference in Dubai. These MRO shows are always fascinating because they show the massive ecosystem and significant business that commercial airplanes support.
And it is big business. Debra Santos, our Marketing leader for Commercial Services, shared that the Middle East region alone will require $745 billion in aviation services over the next 20 years, driven by the demand for 2,990 new commercial airplanes.
Debra shared the forecast as part of our new Services Market Outlook for the Middle East. She pointed out that the amount spent on services will exceed the value of the new airplanes, estimated to be $660 billion. By the way, the government services market is projected to exceed $90 billion over the next ten years.
This growing demand for services is the reason why we established our Boeing Global Services business unit, bringing under one umbrella the best-in-class data analytics and digital solutions, engineering, modifications and maintenance services, training and professional services, and supply chain solutions. Debra and her team will have many opportunities to work with our customers to define new solutions and services to help our customers maximize the value of their airplanes and operate more efficiently.
I asked Debra to share a guest blog post about her recent visit to Dubai, and the growing market demands in the Middle East region.
An article by guest blogger Debra Santos, Chief Marketing Officer – Commercial Services, Boeing Global Services
I recently had the distinct pleasure of meeting with several of our airline customers, partners and journalists at the MRO Middle East event in Dubai. This was such a great experience to be able to engage in many insightful and thoughtful conversations about the growing MRO services market in this region, in such a dynamic and beautiful city.
During this event, we introduced our new Services Market Outlook (SMO) 2018-2037 – Middle East Perspective report. The booming business environment in the Middle East region has been marked by many changes over the past several years – and the demand for new airplanes and aviation services is growing and advancing right along with it.
There’s really no place like the Middle East region for a number of reasons. The Middle East is uniquely positioned just 8 hours away from several large economic and leisure travel centers in Europe, Asia and Africa. It has become a major global hub that connects people around the world in all directions. Our Services Market Outlook report uncovered some interesting facts about this region: 65% of the global GDP, 70% of the 20-year economic GDG growth, and 80% of the global population are all represented within this 8 hour “travel circle” region – with the Middle East as the central hub. Talk about being the center of attention!
In addition to a number of well-established airlines based in the region, several of the world’s largest airlines also operate their fleets and schedule many connector flights each day throughout major cities in the Middle East.
The Services Market Outlook report we released this week cites several points about the projected growth that will fuel the demand for new airplanes and aviation services in the Middle East:
- The Middle East will need 2,990 new airplanes over the next 20 years, reaching a projected 3,890 aircraft by 2037.
- Commercial aviation services worldwide will demand $8.8 trillion over the next 20 years. The Middle East will drive more than 8% of that global demand for aviation services, representing $745 billion, and growing at a projected 4.6% annually.
- Maintenance and engineering services will comprise 4% of the $8.8 trillion commercial aviation services market over the next 20 years; Middle East region maintenance and engineering services are projected to grow at a slightly higher rate of 4.8%, representing approximately $240 billion.
- For forecasted deliveries in the Middle East, 43% percent are widebody – representing the highest market share of widebody airplanes in the world.
- Government services are projected to exceed $90 billion over the next 10 years.
The projected growth in fleets and airline traffic expansion in the region will also drive the need for more people to keep those planes flying. Over the next 20 years, the Middle East will need nearly 60,000 more pilots, 63,000 more maintenance technicians and 95,000 cabin crew personnel. Our Boeing Global Services teams are focusing on training solutions, crew management solutions, and maintenance applications that will help this growing number of personnel effectively manage their operations and do their jobs more efficiently. We are putting data analytics tools powered by Boeing AnalytX in the hands of the people who do the work every day to keep their fleets operating smoothly and provide a pleasant flight experience for their passengers.
The growing fleet will also drive the need for expanded component logistics and MRO services in the region. As fleets grow and expand into a broader global market, managing maintenance logistics will become more complex. This is where Boeing’s deep supply chain knowledge and industry relationships can greatly benefit our customers.
As one example, we are already working closely with airline customers in this region on cabin retrofit services as they move toward common interior designs across their fleet. These updates will help improve efficiency in cabin equipment maintenance, as well as improvements to overall passenger experience with upgrades of cabin features such as lay-flat seats, widescreen in-flight entertainment systems, and enhanced connectivity capabilities. The long-haul widebody airplane fleets operated by our airline customers in the Middle East offer some of the most comfortable and luxurious passenger experiences in the world – and I was of course able to experience and appreciate this first hand on my trip to Dubai!
As new airplanes in the fleet offer improved connectivity capabilities and an increasingly rich volume of useful data available to guide decision support in flight operations and maintenance, the demand for data analytics-focused products and services will also continue to grow. During the MRO Middle East event, I was pleased to be invited to participate in a panel discussion on data analytics technologies and services.
I thoroughly enjoyed the opportunity to engage with several of our customers in conversations about the future ahead of us that will increasingly take advantage of the value offered by data analytics – including our predictive and prescriptive maintenance-focused solutions, powered by Boeing AnalytX. Airlines and their passengers alike can imagine the benefits of a scenario where maintenance operations teams know in advance about potential emerging issues, parts are ordered and ready at the gate before technicians even know they need them, and maintenance is performed before that issue even has a chance to affect airplane operations or delay a flight!
We have identified countless opportunities to work closely with our customers and partners in the Middle East as they navigate the changes associated with this strong projected growth ahead. I’m really looking forward to hearing more from all of our Middle East region customers. What will you need to help you succeed in such a dynamic and rapid growth environment? Your comments and questions are welcome – let’s continue the conversation!