The aircraft cabin interiors market is projected to grow from USD 17.6 billion in 2020 to USD 32.7 billion by 2025, at a CAGR of 13.2% from 2020 to 2025. The growth of the market can be attributed to the increasing number of new aircraft orders due to rise in air passenger traffic across the globe. Moreover, airlines are highly concerned about enhancing the customer experience and as such, are investing increasingly to upgrade the existing aircraft fleets, thereby leading to the growth of the aircraft cabin interiors market.
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COVID-19 impact on the Aircraft Cabin Interiors Market
The COVID-19 outbreak has impacted the aviation industry adversely due to air travel restrictions on domestic as well as international flights across countries, resulting in the grounding of aircraft fleets and a sudden dip in aircraft orders and deliveries in 2020. This is expected to negatively impact the aircraft cabin interiors market in the short term; slow recovery is expected in Q1 of 2021. The aviation industry could take 2-3 years to recover from the financial effects of COVID-19, leading to lower air travels and passenger traffic compared to previous estimates.
The temporary halts in production have impacted the OEM market for aircraft cabin interiors adversely. Aircraft deliveries have been delayed in the first and second quarter of 2020, due to lockdowns in various countries, which has further fueled the decline in the revenue of manufacturers.
Post-COVID-19, businessmen, politicians, and high net-worth individuals may gradually prefer air travel by private jets/turboprops and air-taxies, both within and outside the country as a safe, comfortable, and convenient option for self-transportation. This will, in turn, drive the demand for aircraft cabin interiors such as luxury and comfortable seating, healthy and hygienic lavatories, and efficient in-flight connectivity, among others.
The manufacturers are expected to cope with the challenging requirements of airlines and travelers with respect to health safety and social distancing norms. The manufacturers, aftermarket, and MRO services need to strive hard to gain the passenger confidence in flying back to normal conditions as the pre-COVID-19 times by bringing modifications, enhancements, isolations in aircraft cabin interiors such as seats, lavatories, and IFEC features, among others.
Aircraft Cabin Interiors Market Dynamics:
Driver: Increasing demand for in-flight entertainment systems
The demand for in-flight entertainment systems has increased in the past decade, becoming an alternate source of income for most airlines. Ancillary revenues are helping airlines maintain service quality or increase the quality of services provided onboard. Airlines are using different sources for revenue generation, such as onboard shopping, Wi-Fi connectivity, and advertising. Due to advancements in the IFE technology, airlines have opened online stores, which function in a self-service model, enabling retailing throughout the flight.
Restraint: Regulatory frameworks & certifications
In the aircraft cabin interiors market, in-flight entertainment & connectivity market is subject to regulations in several countries. It becomes difficult for airlines to obtain approvals for the installation of IFE systems onboard. The process of obtaining certifications for IFE systems is quite exhaustive, owing to the long approval process and the high cost of IFE systems. For instance, an IFE system needs to be connected to an electrical bus to ensure safe landing. This procedure requires approval from the Federal Aviation Administration (FAA). Thus, regulatory frameworks & certifications act as restraints to the growth of the in-flight entertainment & connectivity market.
Opportunity: New aircraft interior lighting system technology
Aircraft and component manufacturers are making continuous efforts to develop new technologies that will benefit both the airlines and their passengers, and make air travel more comfortable. For instance, in February 2017, Lufthansa airlines introduced a new aircraft interior lighting technology, which was developed for the Airbus 350-900. This new technology provides the capability of 24 lighting variants for the comfort of passengers, and their functions are based on the biorhythms of passengers on board. Lufthansa has equipped 10 aircraft with this technology and also plans to equip its Boeing 747-800s with the same. Lufthansa’s aircraft bearing this lighting technology conducted its first flight from Munich, Germany to Delhi, India on February 10, 2017. These developments in aircraft lighting are expected to have a positive influence on the aircraft cabin interiors market.
Challenge: Delay in aircraft deliveries
Delay in aircraft deliveries is affecting the aviation industry, which can further impact operations, cash flow, and result in losses for the lessees. The aircraft cabin interiors market is dependent on the aircraft market. A lag in aircraft deliveries can affect future procurement and contracts, potentially leading to heavy losses for cabin interior manufacturers. For example, in 2017, Airbus had scheduled the delivery of about 200 A320 neo to Indigo airlines. However, due to technical issues, the company could only deliver 16 aircraft by mid-2017, and it is expected to be very challenging for the company to complete the pending order on schedule.
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